Highly paid Vernon consultant to step down

PoliticsFinanceBusinessPension and WelfareInterior PolicyElectionsElectricity Production and Distribution

For years, Eric T. Fresch was the powerful hand that guided the city of Vernon. As city administrator he earned as much as $1.65 million a year, making him perhaps the highest paid municipal official in the nation.

Last year, when his compensation and a district attorney's investigation into corruption at City Hall sparked an effort in the Legislature to disband the industrial city, Fresch disappeared from Vernon. He stopped attending council meetings and refused to speak publicly.

But the city money kept flowing: Fresch was paid nearly $600,000 this year as a legal consultant to Vernon's Light and Power Department, according to records reviewed by The Times.

Fresch's lucrative deal didn't sit well with everyone in Vernon, though. Some officials and local business leaders, working to reform the city and improve its finances, have recently been debating whether to cut him loose.

And this week, Fresch responded by announcing that he would stop doing legal work for the city's power department in May 2012. It would mark the first time in more than two decades that Fresch was not on the city's payroll.

Even so, Fresch probably will receive a lucrative pension because the city classified him as a "safety employee" eligible for the enhanced benefits given to police officers and firefighters. Vernon's ex-city administrator, Bruce Malkenhorst, receives the highest pension in the California Public Employees Retirement System: $509,664 a year.

In a city long criticized for being a fiefdom run by a small group of powerful leaders, Fresch's departure is something of a turning point — not only because it would bring a leadership shift but because it came after a political dialogue not often seen at City Hall.

Fresch's ongoing role in managing Vernon's finances has been debated in recent weeks amid criticism over a series of rate increases imposed by the city's electric utility.

At a recent meeting of Vernon's rate advisory committee, frustrations boiled over. Peter Corselli, manager of a Vernon-based cold storage company, asked why Fresch had not attended public meetings this year.

"Given the way he's become such a lightning rod … it would be nice to have him here to answer questions," Corselli said.

"You want him here, front and center?" City Administrator Mark Whitworth replied brusquely. "I'll try to arrange that."

A third committee member interjected, suggesting that Vernon end its relationship with Fresch.

"Maybe … all ties to Fresch need to be cut and no one should talk to him again," said committee member Robert Gutterman, an executive at a local plastic manufacturer.

Others in Vernon's business community have questioned why the city is still relying on Fresch for financial advice given his role in several controversial deals involving the city's energy business. The utility already has about $500 million in debt outstanding and has been mired in some bad investments.

Those financial woes, as well as new state mandates on renewable energy usage, have forced Vernon to raise its electricity rates considerably.

State Sen. Kevin De Leon (D-Los Angeles), who fought against disincorporating Vernon in favor of less radical reforms, has openly questioned whether it would be best for Fresch and the city to part ways.

"Any connection to the old, corrupt guard sets off red flags with me," De Leon said.

When told about Fresch's compensation so far this year, De Leon added: "$600,000 is an obscene amount of money for him to be making, given the systemic challenges Vernon has faced this year."

Fresch has not responded to repeated interview requests from The Times over the last year. When a reporter visited his Bay Area home in April, Fresch said he didn't have time to talk.

His history in Southeast L.A. County politics stretches back to the 1980s, when his family operated a trash-hauling business in Huntington Park, as well as a poker club.

Fresch began his career in Vernon about the same time, working as a legal advisor to the city and close aide to Malkenhorst.

When Malkenhorst was charged with misuse of public funds in 2006, Fresch filled the void. As city administrator he received about $1.4 million in 2006, $1.5 million in 2007 and $1.65 million in 2008, according to records obtained by The Times under the California Public Records Act. In 2008 he billed for 363 days of work, records show, including every Saturday, every Sunday and every holiday except Christmas.

Fresch commuted to work in Vernon during this period from his four-bedroom, hillside home in the Marin County town of Tiburon, often flying first class on the city's dime. While in Southern California, he had his own driver and bodyguards, also paid for with city funds.

Neither CalPERS nor the city would provide an estimate of Fresch's pension. Records show he was awarded a special public safety classification in 2004, which boosts the percentage of his salary used to calculate his pension. It's unusual for people not working in emergency services to receive such pensions, but the city argued at the time that his work as an attorney qualified him for the benefit.

Some of Vernon's toughest critics said Fresch's exit could be significant. Rick Cole, a local government expert who has been an outspoken critic of Vernon, said Fresch's departure provides the city with an opportunity to change its governance structure, either through continued activism from local businesses or a larger, more independent voting population. Only 52 people, many of whom live in city-owned homes and apartments, voted in the city's most recent election.

"There's a window of opportunity here," Cole said. "This entity has been uniquely vulnerable to a city administrator seizing resources without the checks and balances of an electorate."

But former state Assemblyman Hector de la Torre, another Vernon critic, was skeptical of Fresch's plans to leave next year. "That's preposterous. No one is so incredibly vital that they need a seven-month transition for someone else to come and take their place."

Fresch's current contract pays him $525 an hour. Unlike many public-sector service agreements, the contract is open-ended and has no cap on total expenditures. The deal was awarded to Fresch's firm, Law Offices of Eric T. Fresch, but specifically states that no other attorneys would provide services unless approved by the city administrator.

Some of Fresch's connections may still remain in Vernon, even if he ends his contractual relationship with the city next year. His brothers, Curtis and Pat Fresch, have worked as consultants for Vernon, and the latter is still under contract with the city's gas department. Two of the City Council members, Richard Maisano and Daniel Newmire, are friends of the family. Both were appointed to fill vacant seats in 2009, the same year Eric Fresch transitioned from city administrator to legal consultant.

John Van de Kamp, a former attorney general who is working as Vernon's ethics advisor, said that more personnel changes are likely to happen once Vernon hires a new city attorney. "This is part of that entire process," he said. "It cannot happen immediately, but it's coming."

sam.allen@latimes.com

Times staff writer Hector Becerra contributed to this report.

Copyright © 2014, Los Angeles Times
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