Richard Alarcon accuses rival of ‘insider trading’

Democrats vying for the 39th Assembly District seat exchanged potshots Monday after one of them, L.A. City Councilman Richard Alarcon, held a news conference to charge that his rival had engaged in “insider trading” in securing a zero-interest city loan to buy a three-bedroom condominium.

Under a light rain outside Raul Bocanegra’s Pacoima condominium, Alarcon alleged that Bocanegra bought one of 28 condominiums built in 2005 at the corner of Osborne Place and Glenoaks Boulevard even though there was a waiting list of more than 200 people interested in the affordable units. Bocanegra, as former Councilman Alex Padilla’s economic deputy, was shepherding the project’s approval at the time, Alarcon said.

Bocanegra also obtained a $50,000 city loan six months later to help finance the deal, Alarcon said. Under city rules, the zero-interest loan does not have to be repaid until Bocanegra sells the condo.

“He used his insider position to jump to the head of the line, buy a condo and take a $50,000 loan from the Housing Department,” Alarcon said, surrounded by community and tenant’s rights supporters. “Our community deserves better.”

Alarcon is not alleging criminal violations but rather ethical lapses that he outlined in a letter sent to the city Ethics Commission last week. A commission spokesman said it was city policy not to comment on such matters.

Bocanegra spokesman Josh Pulliam called Alarcon’s charges “absolutely ludicrous.” The candidate, chief of staff to termed-out 39th District Assemblyman Felipe Fuentes, did “everything by the book” in purchasing the condo for $370,000, Pulliam said.

“He figured out what he qualified for, saw everything in Sylmar and Pacoima and ultimately got this house working with his broker to qualify for it,” Pulliam said. “He went through the normal process and channels.”

The broker, Ron Martinez of the nonprofit Neighborhood Housing Services, also took care of the financing, the spokesman said, including securing the $50,000 city loan. He said Bocanegra worked on numerous development projects in the San Fernando Valley as Padilla’s economic development deputy and doesn’t specifically recall Emerald Pointe, the one-acre complex where he bought his home.

“He wasn’t on some pre-list like they are trying to accuse him of,” Pulliam said. “They make it seem like he got some special treatment before they went on sale. And nothing could be further from the truth.”

Neighborhood Housing Services declined through a spokeswoman to comment or even acknowledge whether Bocanegra was a client, citing company policy.

Larry Gross, executive director of the Coalition for Economic Survival, a tenant’s rights group, said the allegations, if true, are a slap in the face to those who must wait years for affordable housing options. The units sold in the mid-$300,000s at a time when real estate in the Valley averaged more than $500,000, Alarcon supporters said.

“It concerns us to great extremes when people are jumping up the list to get needed housing,” Gross said.

Monday’s news conference was interrupted by half a dozen students from Cal State Northridge who held up signs behind Alarcon reading “Hypocrite,” “Go Back to Work” and “Where Do You Live?” The students, who refused to give their names, said they supported Bocanegra, who teaches urban planning.

The district attorney’s Public Integrity Division is prosecuting Alarcon and his wife on multiple felony charges of voter fraud and perjury for allegedly living outside his City Council district when he ran for office. Both have pleaded not guilty.

In a statement released after the morning’s news conference, Bocanegra’s campaign said Alarcon needs to answer for those alleged offenses and others, including a loan purportedly received from the wife of a developer and Alarcon’s use of campaign funds to pay his legal bills.

catherine.saillant@latimes.com