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3 Bell city officials out on bail

September 22, 2010 12:00:00 AM PDT
As the eight current and former Bell city officials appeared before a judge Wednesday, a state audit was released detailing the gross mismanagement of tens of millions of dollars in city funds.The arraignment hearing for eight current and former Bell city officials charged with misappropriating public funds was postponed on Wednesday.

The arraignment was delayed to Oct. 21.

The accused officials, arrested on Tuesday, appeared together in a packed courtroom in downtown L.A., all wearing jail attire.

As the defendants made their court appearance, State Controller John Chiang released results of an audit, saying city leaders misused more than $50 million in bond money, using much of it to line their own pockets.

Less than half of it now sits in a no interest account, allegedly for a sports complex that was never developed.

"Our audit found the city had almost no accounting controls, no checks or balances, and the general fund was run like a petty cash drawer," Chiang said. "The city's purse-strings were tied to only one individual, resulting in a perfect breeding ground for fraudulent, wasteful spending."

The defendants include former Bell City Manager Robert Rizzo, the alleged ringleader, Assistant City Manager Angela Spaccia, Mayor Oscar Hernandez, Vice Mayor/Councilwoman Teresa Jacobo, Councilman George Mirabal, Councilman Luis Artiga, former Mayor George Cole and former Councilman Victor Bello.

They are all accused of bilking taxpayers of more than $5 million through major salaries, benefits and illicit loans of public money. All are also charged with misappropriation of public funds.

Rizzo faces 53 charges of misappropriation of public funds and conflict of interest. If convicted, he would face prison time.

"Rizzo, acting as the unelected and unaccountable czar of the city of Bell, secretly set his own salary. He misappropriated substantial pay and benefits by increasing each of them through a series of actions that no one approved of and few, if anyone, knew about," said L.A. County District Attorney Steve Cooley during a press conference on Tuesday.

According to the audit, Rizzo's final salary was $787,000 -- 11 times higher than his original salary. The city also used more than $93,000 in public money to repay personal loans taken out by Rizzo, and approved $1.5 million in loans to other Bell employees, the audit found.

The employment agreements for Rizzo and other top employees required performance evaluations, but there was no evidence that any were ever done, the audit found. Despite that, Rizzo's salary continued to grow, and he also gave "disproportionate" salary and benefit packages to other city staff, according to the audit.

Among the audit's other findings were:

  • A $300,000 loan to a local business, which went into default
  • Payments of $10.4 million to two development firms owned by a contractor who was also the city's director of Planning Services, with the payments continuing even after the contract ended in June 1997
  • Payment of $4.8 million to purchase land from the city's former mayor, who purchased the property for $480,000 in 1981. The purchase was made without any documentation about why the land was needed and with only one appraisal report.

Authorities said the Bell officials knew exactly what they were doing when they stole millions from the residents of Bell. Cooley called it "calculated greed."

"We are alleging they used the tax dollars collected from the hard-working citizens of Bell as their own piggy bank, which they looted at will," Cooley said.

The bail for each official is:

  • $3.2 million for Rizzo, 56
  • $377,500 for Spaccia, 52
  • $285,000 for Hernandez, 63
  • $260,000 for Jacobo, 52
  • $260,000 for Mirabal, 60
  • $190,000 for Bello, 51
  • $145,000 for Artiga, 49
  • $130,000 for Cole, 60

Teresa Jacobo posted bond at court of $260,000 and was released from the Criminal Courts Building, Department 107, at 5:25 p.m.

Luis Artiga posted bond at court of $120,000 and was released from the Criminal Courts Building, Department 107, at 5:25 p.m.

George Cole was released later Wednesday evening. His bail amount was not confirmed.

The remaining individuals incarcerated were to be held until their bail payments could be verified as not being tied to Bell city money.

Lorenzo Velez was the only councilman not implicated in the scandal. Velez said he had no idea that his colleagues were getting such high salaries - he certainly wasn't.

There was celebration outside City Hall on Tuesday night, as word of those arrests spread.

"I work hard for our money, to work hard for my family, and they just keep raising up the prices on everything else so they can pocket the money," said Robert Montano of Bell.

Residents have been united in a recall effort to try to remove the council members who did not resign after the scandal first broke.

This is one of the largest corruption scandals in California history.

City News Service contributed to this story.

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