Ex-city manager of Bell, California gets 12 years for corruption

Robert Rizzo

Ex-Calif. city manager gets 12 years for corruption
Michael Winter
USA TODAY
April 16, 2014

An astonishing case of small-city corruption ended Wednesday as the longtime administrator of Bell, Calif., was sentenced to 12 years in state prison for paying elected officials lavish salaries and using the public coffers as a piggy bank for himself and other employees.

"Power corrupts, and absolute power corrupts absolutely," Los Angeles County Superior Court Judge Kathleen Kennedy said in sentencing Robert Rizzo and ordering him to pay $8.8 million in restitution. "That is the theme of what happened in Bell. There were no checks and balances to control Mr. Rizzo and those that were in power in the city."

On Monday, a U.S. judge sentenced Rizzo to 33 months in federal prison for income tax evasion. His state and federal terms will run concurrently, and he must surrender to U.S. authorities May 30 to begin his incarceration.

Rizzo managed the working-class city for 18 years before the graft was uncovered in 2010. Though nearly 25% of Bell's 36,000 residents live below the poverty line, Rizzo's pay and benefits totaled $1.5 million a year. Kennedy called his salary and those of council members and other officials "absolutely ridiculous."

"Nobody wanted to upset the apple cart because they were paid so well," she said, describing him as "a godfather of sorts."

The pay packages were part of a larger scandal. A state audit found that Bell had illegally raised property taxes, business-license fees and other sources of revenue to pay the officials' extravagance. By the time it was uncovered, auditors said, the graft had cost the city more than $5.5 million and pushed to the brink of bankruptcy.

At the time of his arrest,, Rizzo was the highest paid city official in California -- and possibly the nation -- and would have been the state's top earning public pensioner had he retired.

Before learning his fate Wednesday, he spoke publicly for the first time since the scandal broke.

"I'm very, very sorry for that. I apologize for that," he said in a soft voice. "If I could go back and make changes, I would. I've done it a million times in my mind."

In an interview with the Los Angeles Times as he walked to his car after his sentencing, Rizzo said he "should have realized the salaries were way out of whack and taken steps to bring them back in line, but it just got away from me."

"There's not much I could do after a period of time," he said.

Under a deal with prosecutors, five former City Council members pleaded no contest to misappropriating city funds, and Kennedy will begin sentencing them in June. Punishments range from probation to four years in prison, and all must make restitution and never again seek public office.

One council member, a preacher, was acquitted.

Last week, Rizzo's deputy, Angela Spaccia, was sentenced to 11 years and eight months in state prison for misappropriating public funds by giving herself enormous raises. When a jury found her guilty in December, her salary was $564,000.

On the witness stand, Spaccia acknowledged that she felt she was earning too much when her salary passed $340,000, but argued that it was not criminal.

School attorney firm Best Best & Krieger sued for in City of Bell corruption: is similar corruption is going on in our schools?

Isn't this just business as usual taken to an extreme? The cronyism that makes this sort of thing possible can be found almost everywhere. My estimate is that only about 10% of public entities are run in an honest, open manner. The US seems to be becoming more corrupt and more divided between rich and poor. We're turning ourselves into a banana republic without the bananas.

Public entity attorneys have a tendency to see no evil, hear no evil and speak no evil when it comes to the public officials who pay them.

Bell sues its former city attorney, claiming faulty legal advice
LA Times
Jeff Gottlief
July 29, 2011

The city of Bell filed a malpractice lawsuit against its former city attorney and his two law firms Thursday, alleging that they were given faulty legal advice.

The suit contends that attorney Edward Lee provided legal advice that allowed Bell officials -- including former city Administrator Robert Rizzo and City Council members -- to receive extraordinary salaries and benefits. The suit, filed in Los Angeles Superior Court, also alleges that Lee gave the city poor advice regarding a variety of subjects, including business license fees and loans that Rizzo gave to employees.

The lawsuit singles out Lee's most recent firm, Best Best & Krieger, for allegedly failing to properly advise Bell on a $35-million bond offering in 2007.

"The city attorney was responsible for preventing the abuses of power by the prior city government that left the city in its current difficult financial situation," Bell's attorney, William Stoner, said in a news release. "The lawsuit seeks to place responsibility for not protecting against those abuses of power where it belongs and obtain just compensation from those responsible."

Lee had been Bell's city attorney for 15 years, first with Oliver Sandifer & Murphy and, for the last four years, with Best Best & Krieger. He resigned from Best Best & Krieger shortly after The Times revealed that Rizzo's salary was nearly $800,000 a year.

Duff Murphy of Oliver Sandifer & Murphy said he didn't know about the suit.

BBK is a well-known firm with more than 200 attorneys in eight offices in California and Washington, D.C., and serves as city attorney for many towns.

BBK's general counsel, Richard Egger, said he had not reviewed the complaint, "however, the firm believes that it acted appropriately at all times and looks forward to vigorously defending itself."

[Maura Larkins' comment: Watch out, taxpayers. Public entity attorney are apparetnly not planning to change their ways. We haven't heard a peep from the California Bar Association, have we?]

Lee could not be reached for comment.


Ex-Bell city attorney unsure how his signature got on contracts Edward Lee, Bell's former city attorney, said he had no reason to suspect anything was amiss with city finances. By Jeff Gottlieb LA Times October 28, 2013

Bell’s former city attorney testified Monday that starting in 2005, the rapidly escalating contracts of Robert Rizzo and Angela Spaccia were never discussed nor approved by the City Council.

Edward Lee said that even though his name was on most of the contracts, he did not recall signing them, raising the possibility that his name was forged or that the papers were slipped to him in a stack of other documents that required his signature.

[Maura Larkins' comment: The third possibility is that he has a bad memory or a selective memory.]

Lee testified that in order for the Rizzo and Spaccia contracts to be legal, they would have to have been placed on council agendas, discussed in public meetings and then be approved by a council majority.

Asked if it appeared to be his signature on a July 1, 2008, addendum to Rizzo’s contract, Lee replied, “Unfortunately, yes.”

But, he added, he had no idea how it got there.

Lee's testimony came during the second week of Spaccia’s corruption trial, in which she faces 13 felonies. Rizzo pleaded no contest to 69 corruption-related charges and is expected to be sentenced to 10 to 12 years in prison.

Lee, who served as Bell’s contract attorney from 1996 until shortly after the corruption scandal broke, said that after voters passed a city charter in 2005, he never saw Rizzo’s contract come before the council.

Asked by Spaccia’s attorney, Harland Braun, why he never brought it up, he replied, “I figured that was between Mr. Rizzo and the City Council… Either the council is going to raise it with me or Mr. Rizzo is going to raise it with me.”

The former city attorney said he had no indications of anything illegal going on in the city, “nothing that rang any alarm bells that said there was a legal issue I needed to look at.”

{Maura Larkins' comment: See what I mean about see no evil, hear no evil, speak no evil?]

He said independent auditors didn’t bring up problems with finances and there were no questions from the staff.

“It all appeared from the surface the city of Bell was doing well,” he said.

Eight Bell leaders arrested on charges of misappropriating $5.5 million

See all posts re City of Bell scandal.

Eight Bell leaders arrested on charges of misappropriating $5.5 million
By Jeff Gottlieb, Ruben Vives and Jack Leonard
Los Angeles Times
September 22, 2010

Eight current and former Bell city leaders were arrested Tuesday on charges of misappropriating more than $5.5 million from the small, working-class community as prosecutors accused them of treating the city's coffers as their personal piggy bank.

The charges follow months of nationwide outrage and renewed debate over public employee compensation since The Times reported in July that the city's leaders were among the nation's highest paid municipal officials.

Among those charged was former City Manager Robert Rizzo, who led the way with an annual salary and benefits package of more than $1.5 million. Prosecutors accused him of illegally writing his own employment contracts and steering nearly $1.9 million in unauthorized city loans to himself and others.He was booked into Los Angeles County jail and was being held on $3.2-million bail.

"This, needless to say, is corruption on steroids," said Los Angeles County Dist. Atty. Steve Cooley in announcing the charges.

Cooley described Rizzo as the "unelected and unaccountable czar" of Bell, accusing him of going to elaborate lengths to keep his salary secret. Prosecutors alleged that Rizzo gave himself huge pay raises without the City Council's approval.

"This was calculated greed and theft accomplished by deceit and secrecy," Cooley said...

At a news conference, Cooley accused City Council members of failing to oversee Rizzo's actions saying that they instead had collected more than $1.2 million in total pay since 2006 for presiding over city agency meetings that never occurred or lasted just a few minutes...

Attorney general issues subpoenas in Bell salary scandal

See all posts on Bell City Hall salary scandal.

UPDATE:
Mayor of Calif. city to stop taking high salary
By JOHN ROGERS (AP)
jULY 26, 2010

BELL, Calif. — The mayor of Bell apologized Monday for the excessive salaries paid to city officials and said he will step down after completing his term without pay.

Mayor Oscar Hernandez said in a statement posted on the Bell city clerk's website that the salaries were indefensible.

Four of the five members of the City Council earn about $100,000 a year for running the blue-collar city of about 40,000 people.

The city's chief administrative officer was earning nearly $800,000 a year before he resigned last week.

Hernandez last week defended the city's salaries...


Attorney general issues subpoenas in Bell salary scandal
July 26, 2010
LATimes

Atty. Gen. Jerry Brown on Monday issued subpoenas for hundreds of salary and employment documents from the city of Bell to determine whether top officials broke laws in awarding out-sized salaries to city administrators and City Council members.

Brown said he was moving swiftly after The Times exposed a pay scandal in the small working-class city to reassure taxpayers that the state was determined to crack down on possible wrongdoing and to warn other cities not to follow Bell's path.

"These outrageous pay practices are an insult to the hard-working people of Bell and have provoked righteous indignation in California and even across the country," Brown said.

Poor City Pays Officials Top Dollars: Where is all Bell's money coming from?

See all posts re City of Bell scandal.

UPDATE:
Salary scandal in Bell shines light on impound cash
September 10, 2010
Ryan Gabrielson

Police are supposed to keep the streets safe. In Bell, it appears, the police department also expected officers to keep the city’s coffers filled.

As part of a policy ostensibly to deter gang activity, the Los Angeles Times reported on Monday that Bell patrol officers aggressively pursued unlicensed motorists. Officers there – in the wake of the city's salary scandal – say they operated under quotas for how many arrests to make, traffic tickets to write and cars to impound each day. [Update: La Opinion first reported the Bell Police Department's impounding policy and the revenue it generated.]

California law permits police to seize for 30 days cars driven by people without licenses. Police across the state are impounding a huge volume of vehicles.

It’s unknown exactly how many, but the California Office of Traffic Safety documented [PDF] 108,050 30-day impounds in 2008 at sobriety operations (checkpoints, saturation patrols) alone.

Cities collect impound release fees. Increasingly, local governments also get a cut of the revenue that tow companies charge car owners for moving and storing seized vehicles, California Watch reported earlier this year.

The 30-day impounds, however, face a legal challenge from the owners of impounded cars who argue the law violates the Fourth and Fifth Amendments. At question is whether the impounds are a constitutional administrative penalty for violating state law.

The lawsuit, Salazar v. Maywood, awaits oral arguments before the 9th Circuit Court of Appeals later this year.

As the Times showed in Bell, with the impound law in effect, the dollars pile up:

Impounding cars, usually because the drivers are unlicensed, has been a steady revenue stream in Bell for years. In the last fiscal year, the city expected to make more than $770,000 from release fees, which would amount to between 2,000 and 2,500 impounds per year. The previous year, the department made more than $834,000.

The city charges unlicensed motorists a $300 fee to release the car; those charged with driving under the influence are charged $400. The number does not include costs imposed by the impound lot, which starts with a $104 base fee and increases $27 per day.

Bell’s release fee is higher than most other of the state’s cities, but is nowhere near the highest. Oxnard’s police department charges drivers $495.

Similarly, while Bell might offer an extreme example of the practice, California cities have long been aware of impounds’ profit potential.

In 2000, the University of California, Berkeley Institute of Transportation Studies published step-by-step instructions on how to implement a “winning” impound program.

The instructions were based on an examination of how the city of Upland took over towing and storage from private firms. Impounds, the report shows, are revenue positive...

UPDATE: Someone left the following links in the comments section. You can put in the name of a city and find out salaries: for actual salaries, by person, check out www.lasalaries.com or www.sanfranciscosalaries.com

Where is all this money coming from? I doubt that tax rates are unusually high. There must be something going on in the city that is generating a lot of revenue. Are officials being paid to look the other way? This should be an interesting investigation.

Poor City Pays Officials Top Dollars
Source: Los Angeles Times
July 15, 2010

Bell, one of the poorest cities in Los Angeles County, pays its top officials some of the highest salaries in the nation, including nearly $800,000 annually for its city manager. In addition to the $787,637 salary of Chief Administrative Officer Robert Rizzo, Bell pays Police Chief Randy Adams $457,000 a year, about 50% more than Los Angeles Police Chief Charlie Beck or Los Angeles County Sheriff Lee Baca and more than double New York City's police commissioner.