Councilwoman, husband owe $270,000 in back taxes

Los Angeles City Councilwoman Jan Perry and her estranged husband owe more than a quarter of a million dollars in back federal and state income taxes, largely stemming from what they say were problems in his former law practice.

Their back taxes, which totaled nearly $375,000 in 2002 but have since been paid down to $270,000, have never been publicly discussed but are documented in a legal separation lawsuit she filed in Los Angeles County Superior Court and in tax liens issued by the state and federal governments.

Her husband, Douglas Galanter, has recently taken responsibility for paying the remaining debt and said Perry had no role in the failure to make tax payments.

The liens show the couple’s debts grew as they failed to fully pay their income taxes every year from 1989 to 2001, when Perry was first elected to the City Council.

No liens have been recorded against Perry for subsequent tax years.

Perry and Galanter declined to answer questions but issued statements about the back taxes.

“Before I became a member of the City Council in 2001,” Perry said, “my family experienced financial challenges resulting from my husband’s business, and we are dealing with those issues proactively.”

She said that, “as an elected public official, I understand that many details of my financial affairs are in fact quite public. Other aspects of my family’s finances are part of a private divorce proceeding.... For that reason, I do not feel it is appropriate for me to comment in detail on highly personal and painful matters.”

Galanter, 51, this year filed for divorce. He issued a statement through Perry’s lawyer stating that, “Jan Perry’s and my financial problems as an ex-married couple arose primarily from activities involving my former law practice many years ago. Jan had no role in the activities or decisions that led to those setbacks.”

Perry, also 51, has in the past accepted responsibility for half of the couple’s back taxes and told a court in her 2002 legal separation lawsuit that she was paying them off at a rate of $4,500 per month.

Perry estimated the debt at the time as $300,000 to the federal government and $73,000 to the state.

Perry’s lawyer, Stephen Kaufman, said in another statement that Galanter had “agreed through legal proceedings to take responsibility” for paying off the tax liens from now on.

Perry sought to have court records in her separation case sealed, arguing in a declaration to then-Superior Court Commissioner Michael Levanas that information about marital and financial woes might cause her political harm.

“I am a public official, a city of Los Angeles councilwoman,” she wrote. “Other than this legal separation action, I have an unblemished record.... I do not wish my private life to be available to the public and possibly used against me when and if I choose to run for reelection.”

Levanas ordered the file sealed, apparently after hearing other evidence that Perry was dealing with an aggrieved constituent who was stalking her. The city, on Perry’s behalf, obtained a restraining order. The order has since expired.

However, the sealing order was apparently not implemented by the court clerk’s office, and the file remained publicly available.

During the years in which the couple did not pay their full taxes, they filed joint tax returns. Perry worked as an aide to various elected officials, including other council members, and her employer, the city of Los Angeles, routinely deducted tax money from her paychecks.

As a lawyer in private practice, Galanter earned more than Perry did and would have been responsible for his own tax payments.

By 2003, Perry said in court, her husband was earning $250,000 a year.

Last year, Perry earned $150,000 as a member of the City Council and $10,500 as a representative of 25 cities on the board of the South Coast Air Quality Management District.

She was also entitled to $21,000 in spousal and child support payments. She and Galanter have one child.

Perry has recently had difficulty making all of her mortgage payments in a timely fashion on the condominium she purchased in 2003. On July 11, her mortgage lender filed a public “notice of default and election to sell” the condominium, a first step in the foreclosure process. The notice said she failed to make three months’ worth of payments totaling $7,700 on a $377,000 mortgage.

In a brief telephone conversation, Perry said the foreclosure notice was “outdated. The matter’s been handled.”

Perry has also been slow in paying off a student loan. She earned a bachelor’s degree from USC in 1977 and a master’s in 1981. More than 20 years later, she told Levanas, she was paying $250 a month on an outstanding balance of $47,000.

Federal court records show that she and her husband twice filed for bankruptcy protection in the mid-1990s and that, in 1994, a bankruptcy court discharged about $170,000 of the couple’s debts to banks and credit card companies.

At the time, Perry reported earning about $50,000 annually as chief of staff to her predecessor, former Councilwoman Rita Walters, and her husband reported earning about $100,000.

In 1999, her husband filed for bankruptcy protection again -- this time in his name only.

The couple were then trying to avoid foreclosure on the four-bedroom, four-bathroom, 3,400-square-foot home near Olympic Boulevard and Highland Avenue they had purchased in 1990 for $825,000, records show.

The year before the bankruptcy filing, Perry had successfully sought to have the city declare the 1927 Mediterraneanstyle home a historic-cultural monument -- a little-known designation that typically leads to a reduced property tax bill.

She and her husband owed $35,000 in back property taxes on the house, which they paid when they sold it at a loss in 2001, a few months after she was elected to the City Council.

ted.rohrlich@latimes.com