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Bell's Spaccia was set to make an extra $8 million, expert testifies

Pension and WelfarePoliticsInterior PolicyCity of Bell Public Corruption ScandalCalifornia Public Employees' Retirement System

A Wells Fargo & Co. pension expert testified Thursday in the Bell corruption trial that he drew up a special retirement plan for city administrators Robert Rizzo and Angela Spaccia that would have allowed them to increase their already huge pensions by at least $375,000 a year.

Alan Pennington, an actuary in Nashville, Tenn., testified that his projections showed that the plan would have paid Rizzo $7.5 million over his lifetime, and Spaccia, who is younger, $8 million.

The plan was to set it up so that the percentage used to calculate Spaccia's benefits was twice that used for Rizzo. Pennington was not asked whether Rizzo knew about that arrangement.

FULL COVERAGE: Corruption in Bell

Pennington testified that most of his dealings were with Spaccia but that she told him that Rizzo was calling the shots.

Spaccia is being tried on 13 felony counts related to corruption in Bell, where she was assistant city manager. Rizzo has pleaded no contest to 69 corruption-related felonies. Both were accused of looting the small town’s treasury by drawing extraordinary salaries and awarding themselves generous benefits.

About 40 Bell employees were given supplemental city pensions on top of their usual retirement benefits through CalPERS, giving them among the most lucrative pensions in the state for non-safety government employees.

Wells Fargo was hired to develop a pension plan that allowed Rizzo and Spaccia to get around certain restrictions on pensions for highly paid government employees.

Pennington's testimony was technical and sometimes confusing. "I don’t know about the jury but I’m having a difficult time following this,” Superior Court Judge Kathleen Kennedy said.

The actuary, who testified standing up because of a back injury, said he had never heard of this kind of pension plan being set up for government employees.

He also said he had not heard of government officials earning the salaries Rizzo and Spaccia were making. Rizzo received total compensation of about $1.18 million a year and Spaccia $564,000.

Eligibility for the pension plan was set up so that Rizzo and Spaccia were the only Bell employees who qualified.

In one email, Pennington told Spaccia if would be a good idea for her to consult legal counsel about the plan.

Spaccia, in several emails shown to the seven-woman, five-man jury, tells of trying to keep the plan secret, worried at one point that the city’s financial director, Lourdes Garcia, would want in on the deal.

”I don’t think it looks good to keep drawing attention to it," she wrote Pennington.

Pennington also sent Spaccia a newspaper article talking about the furor over the $900,000 salary that Bruce Malkenhorst, the former city manager of neighboring Vernon, was receiving. Spaccia said she was not worried.

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jeff.gottlieb@latimes.com

Copyright © 2014, Los Angeles Times
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Pension and WelfarePoliticsInterior PolicyCity of Bell Public Corruption ScandalCalifornia Public Employees' Retirement System
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