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Audit uncovers more mismanaged Bell funds

September 23, 2010 12:00:00 AM PDT
The corruption scandal in the city of Bell continues to unfold. The state controller said his auditors uncovered millions of dollars of mismanaged funds.After making their first court appearance on Wednesday, three of the eight accused Bell officials posted bail.

Vice Mayor Teresa Jacobo and City Council member Luis Artiga were driven away from the Criminal Courts Building.

Former council member George Cole was also released. The trio posted bails ranging from $120, 000 to $260,000.

Former City Manager Robert Rizzo, the man at the center of the scandal, was granted a reduction of his bail from $3 million to $2 million.

State Controller John Chiang says that his audit reveals that Rizzo used the general fund like a "petty cash drawer."

"It is a gross example of bad actors or totally incompetent actors," said Chiang.

Among other things, the state audit also found:

  • Rizzo used more than $93,000 to repay two personal loans and approved $1.5 million in loans to other city workers even though no city ordinance permitted it.
  • The city levied more than $5.6 million in improper sewer, property and business license taxes.
  • Exorbitant salaries were approved for city leaders without required performance reviews. In the past year alone, the city spent more than $5.8 million on compensation for the mayor, City Council members and six top administrators.
  • The city paid $10.4 million to two development firms owned by a contractor who also was the city's director of planning services.
  • The city made a $4.8 million land purchase from a former mayor without documenting how the land would be used. No work has been done on the property, which contains a vacant store.

"You can't take public money and say you'll give it back next week," said Deputy District Attorney Jennifer Lentz Snyder. "That is a crime."

The city officials have also been accused of mismanaging more than $50 million in bond funds.

"This is only the first step. It took awhile because every time we turned the page we saw more waste, abuse and fraud," said Chiang. "Unfortunately at this point it is endless."

Also charged in the corruption probe were Mayor Oscar Hernandez; former assistant city manager Angela Spaccia; council member George Mirabal and former council member Victor Bello.

Arraignments for all eight were continued until Oct. 21.

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