LOCAL L.A. Now

City of Industry audit's findings foreshadowed in 2009 Times investigation

When the City of Industry released the findings of an audit into the small municipality's finances this month, they found that the town’s former mayor and family had enriched themselves on a host of city contracts to the tune of $326 million and counting.

The review of the city's finances showed that Dave Perez and his relatives held sway over the City of Industry — population 400 — much as they would a mom-and-pop shop, except that the returns to the family's bottom lines were corporate-sized, averaging about $16 million a year for the last two decades.

Completed this month, the audit comes 5 1/2 years after a Times investigation laid out the lucrative relationship between the Perez family and City Hall. An inquiry by the district attorney's office that began in 2009 was closed in 2011 without the filing of any charges.

Here are some of the findings from that 2009 Times probe:

Perez disposal operation earned millions

In 2008, Perez’s disposal operation generated more than $12 million and another of his firms collected nearly $6.8 million for maintaining city streets, parkways, removing graffiti and other services.

The many Perezes

At the time the story was published in October 2009, nearly a third of the town’s registered voters (less than 100 people) appeared to be related to Perez or resided in a home owned by the family’s land investment partnership, Larrache Land Co.

Perez-owned companies had city contracts

Perez reported an income between $10,000 and $100,000 from Larrache Land in 2008 and more than $100,000 in income from Zerep (Perez spelled backward) Management Corp. Perez was listed as the president of the firm, which held a multimillion-dollar contract with the city for maintenance work and had stock in the city’s trash companies.

Perez disclosed income from Grand Central Recycling Co., which operated a trash transfer station in the city.

City redevelopment money

The company received more than $10,000 in 2008 from the city’s redevelopment agency, of which Perez’s nephew was a board member.

Contract extension

Despite previous agreements between the city and  Zerep Management being amended every few years for cost adjustments, the city signed on to a 24-year extension just five days before Perez became mayor.

In an interview at the time, Perez said his investments had been properly disclosed and his interests in contracts had been carefully managed to avoid self-dealing and conflict-of-interest violations.

"We work hard at it," he said in 2009, adding that the rubbish and maintenance agreements were in place well before he took office.

Mayor saw no issues

At that time, Perez said he removed himself from day-to-day business operations and dealings with the city. The mayor also said back then that he saw no issues of potential political influence in his financial ties to other Industry decision-makers.

Ruben Vives and Rich Connell contributed to this report.

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