Brown Goes to Court to Force City of Bell to Accept a Monitor and Subpoenas Testimony in Vernon Salary Probe

Thursday, October 21, 2010
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LOS ANGELES – Expanding legal action against excessive salaries and pensions in two southeast Los Angeles County cities, Attorney General Edmund G. Brown Jr. has subpoenaed testimony from the city of Vernon and asked a court to appoint a monitor to oversee finances and management in the city of Bell.

Brown’s subpoena seeks testimony under oath from Vernon officials about compensation and pension benefits for six highly paid city officials, one of whom received more than $1.6 million in a single year.

In the case of the scandal-scarred city of Bell, Brown filed a motion in Los Angeles Superior Court asking for the appointment of a monitor to oversee the city’s operations to safeguard city finances and ensure the city is run in an open and transparent manner until next year’s election.

“In both cities,” Brown said, “independent scrutiny is essential in restoring public trust.”

“The public has suffered from raiders who plundered the city treasuries,” Brown added. “The people deserve to know that the guilty individuals will be held accountable and that their tax dollars will no longer be siphoned into exorbitant salaries.”

In the Vernon subpoena, Brown asked the city to designate one or more persons most knowledgeable to testify about compensation and retirement benefits given to Eric T. Fresch, former city administrator and deputy city attorney; Donal O’Callaghan, former city administrator and utilities director; Roirdan S. Burnett, city treasurer/finance director; Jeffrey A. Harrison, former city attorney; Bruce Malkenhorst Jr., former city clerk; and Bruce Malkenhorst Sr., former city administrator.

According to media reports and other sources, Fresch was paid $1.65 million in 2008; O’Callaghan was paid $785,000 last year; Burnett, $570,000 last year; and Harrison, $800,000 last year. Malkenhorst Jr. was paid $290,000 in 2008. Malkenhorst Sr., who retired in 2005, receives a pension of more than $500,000 a year.

O’Callaghan was indicted Tuesday by a Los Angeles grand jury on three felony counts of conflict of interest and misappropriation of public funds. Malkenhorst Sr. has been charged with embezzling public funds.

Brown also vowed to continue aggressively pursuing pending civil claims he filed last month against eight Bell city officials.

On September 15, Brown filed a lawsuit against former city manager Robert Rizzo; former assistant city manager Angela Spaccia; former police chief Randy Adams; council members Oscar Hernandez, Teresa Jacobo and George Mirabel; and former council members Victor Bello and George Cole. The suit charges fraud, civil conspiracy, waste of public funds and breach of fiduciary duty. It also alleges the defendants deliberately misled the public about the true amounts of their compensation.

The city of Bell was named as a defendant to ensure that it would no longer be responsible for the grossly excessive compensation (including salaries and retirement benefits) awarded to the individual defendants and others.

The suit demands that the defendants return all excessive compensation and asks the court to establish appropriate salary levels for pension purposes. Rizzo’s last annual base salary was $787,638; Adams’ was $457,000 and Spaccia’s was $336,000. Bell city council members were paid $96,000 a year before they took a recent cut. Cities of similar size pay their council members $4,800 a year.

Bell is a “city in crisis,” Brown said, and the appointment of a monitor is imperative to aid in the recovery of funds and restore transparency and trust-worthiness to city operations.

“One city council member has resigned,” Brown said. “One is still in jail. Two others, recently out of jail, called in ‘sick’ and did not attend the last City Council meeting.”

The court-ordered monitor for Bell would have complete and unfettered access to all matters relating to the city, the right to participate in all meetings and discussions of city affairs, and the right to examine all of the city’s financial affairs and transactions.

The monitor would also have the authority to investigate everything relevant to the civil lawsuit filed by Brown and subsequent criminal complaints filed by the Los Angeles District Attorney, and to report to them at least once a month any indications of fraud, dishonesty or mismanagement in the affairs of the city.

The monitor would be required to hold a public forum at least once a month to report on city operations and take questions from the public.

The position of the monitor would be temporary, lasting until one month after certification of the results of the city’s municipal election in March of next year.

Bell, in southeast Los Angeles County, has a population, according to the 2000 census, of 36,624, which includes a high percentage of low-income residents. Vernon, a neighboring industrial city, has fewer than 100 residents.

The Bell motion to appoint a monitor and memorandum are attached, as is the Vernon subpoena.

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PDF icon Vernon Subpoena137.91 KB
PDF icon Bell Documents2.44 MB