Two supervisors call for a grand jury probe of City of Industry

Two Los Angeles County supervisors call for a grand jury inquiry into City of Industry's financial dealings

Two Los Angeles County supervisors demanded Tuesday that a grand jury investigate allegations that companies owned by the former mayor of the City of Industry and his family gained more than $326 million through a host of city contracts.

An audit of the city's finances completed this month revealed that companies owned by former Mayor Dave Perez and his relatives took in on average $16 million a year for the last two decades, with invoices often lacking detailed descriptions. One contract for street cleaning billed at six times a competitor's rate.

In a motion introduced Tuesday, Supervisors Hilda Solis and Michael D. Antonovich called on the rest of the board to send a five-signature letter to Los Angeles County Dist. Atty. Jackie Lacey requesting another investigation.

More than five years ago, an investigation by The Times exposed the lucrative relationship with City Hall enjoyed by the Perez family. A district attorney's inquiry began in 2009 but ended in 2011 without any charges filed.

That inquiry concluded there were no illegal conflicts because the contracts were issued before Perez took office, spokeswoman Jane Robison said. On later deals signed with family companies, Perez abstained from votes, she said.

The latest audit's "revelations require an investigation into the incestuous greed, corruption and backroom deals — and indictments of those responsible," Antonovich said in a statement. The five-member board is scheduled to vote on the resolution next week.

A district attorney's spokeswoman said this week that no inquiry is currently underway.

According to the audit, which was conducted by KPMG and ordered by city officials after Perez left office in 2012, the vague accounting raises the question of whether the municipality was regularly overcharged.

One company, Zerep Management — which is Perez spelled backward — charged the city $28 million for vehicle and equipment rentals over 11 years, enough to purchase a fleet of the same vehicles "many times over," the audit said.

Speaking for the company, Perez's nephew David Perez said it "sounds like the audit misrepresents my billing."

"I would have welcomed the opportunity to cooperate with this audit to explain and or dispute any discrepancies," David Perez said.

Twitter: @MattHjourno

Copyright © 2017, Los Angeles Times
EDITION: California | U.S. & World