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California Accuses $800,000 City Manager of Fraud and Waste

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Sept. 15 (Bloomberg) -- California sued Robert Rizzo, the ousted city manager of Bell who was paid almost $800,000 a year, and seven current and former officials, seeking the return of “excess salaries” and reductions in pension payouts.

The state filed a civil complaint in Los Angeles County Superior Court, accusing them of wasting public funds, negligence, fraud, conflict of interest and breach of fiduciary duty.

California is asking the court for a return of compensation paid to the officials “in excess of what was reasonable and appropriate, an amount to be proven at trial,” the suit said. The state also wants a declaration from the defendants that such pay won’t count toward future pension benefits, the suit said.

“We are filing our lawsuit on behalf of the public to recover the excess salaries that Bell officials awarded themselves and to ensure their future pensions are reduced to a reasonable amount,” state Attorney General Jerry Brown said in a statement.

Brown is the Democratic nominee for California governor in the November election. Rizzo’s attorney said that could explain the suit.

“That a candidate for governor would file a civil action at this time during the campaign does not surprise me,” James Spertus said in a telephone interview from his office in Los Angeles.

‘Everything in the Open’

Spertus said he had not had a chance to review the suit. “Mr. Rizzo’s compensation was approved by the city council and contracts were countersigned by the city attorney,” he said. “Mr. Rizzo did nothing secretive, and did everything in the open and above board. It’s just very difficult for me to understand why people would accuse Mr. Rizzo of wrongdoing when he operated so transparently.”

In addition to Rizzo, the state sued Pier’angela Spaccia, Bell’s former assistant city manager; Randy Adams, former police chief; Mayor Oscar Hernandez; council members Teresa Jacobo and George Mirabal; and former members George Cole and Victor Bello.

Rizzo was the city’s chief administrative officer from 1993 until July and earned a base salary of $787,500 in 2010, according to the suit.

Council members provided Rizzo with 107 days of vacation and 36 days of sick leave in 2008, the suit said. They allowed him to convert vacation and sick leave into additional pay of $360,000 in 2009, bringing his total compensation for the year to more than $1.1 million, according to the filing.

“We’re trying to stop them from getting these jacked-up pensions,” Jim Finefrock, director of communications for Brown, said in a telephone interview today.

Brown said in the statement that he is expanding his probe into the compensation of municipal officials to include Bell’s neighboring city of Vernon.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.

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