Former Vernon official pleads guilty to conflict of interest

Former Vernon City Administrator Donal O’Callaghan pleaded guilty Friday to felony conflict-of-interest charges related to the hiring of his wife as a contractor, becoming the third high-ranking city official convicted of public corruption charges in the last two years.

The contracts awarded to O’Callaghan’s wife, Kimberly McBride, were first reported by The Times last year as part of a series of stories on high salaries and benefits paid to Vernon’s top officials. O’Callaghan, who made as much as $785,000 in 2009, was indicted in October.

A Los Angeles County Superior Court judge sentenced the 55-year-old former administrator to 200 hours of community service and one year of summary probation.

The criminal charges and convictions of top Vernon officials comes as Assembly Speaker John Pérez (D-Los Angeles) is pushing a bill to disincorporate the mostly industrial city of about 100 residents. Pérez has argued that Vernon operates less like a city and more like an insular fiefdom that largely benefits a small group of officials.

In response, the city has engaged in a multimillion-dollar campaign against the bill, touting Vernon’s role as a job-producing economic engine and a recent round of reforms. A spokesman for the city said Vernon has “cooperated fully with the district attorney’s office since the inception of this investigation” last year.

In late 2009, former longtime Mayor Leonis Malburg was convicted of voter fraud. This May, former City Administrator Bruce Malkenhorst pleaded guilty to misappropriation of public funds, including using city money to pay for golf outings and massages.

O’Callaghan’s attorney, Mark Werksman, described the conflict-of-interest law as “unforgiving” and “hard to get around.” He said his client was upfront with the Vernon City Council and city attorney about his wife’s work for the Vernon Light & Power Department and that none of them realized her employment was illegal.

“Even though Donal may have technically violated the law, he’s not a criminal,” Werksman said. “He provided a valuable service for the city, as did his wife.”

But Los Angeles County Deputy Dist. Atty. Max Huntsman said O’Callaghan was the latest example of a Vernon official undone for acting as if he worked for a private company.

“All the crimes that happen there happened largely because of the misrepresentation of Vernon as a city, when it’s not. It’s pretending to be a city, but it’s a corporation,” Huntsman said. “The same thing happened with Malkenhorst. If he was running the Dodgers and golfing on the company’s dime it wouldn’t matter. But it’s the practice of pretending something is a business when it’s not.”

Despite his conviction, Malkenhorst still collects the highest public pension in the state at more than $500,000 a year.

Huntsman said that like Malkenhorst, Malburg, the longtime mayor and grandson of one of Vernon’s founders, got in trouble for acting as if he were the “CEO of a company.” Malburg was convicted of lying about living in Vernon when he actually lived in a mansion in Hancock Park.

“The idea that that he had to live in Vernon seemed like a silly technicality to him, so he created a fake movie set of a residence in the city,” Huntsman said. “That’s what leads to the criminal problems there.”

The prosecutor said grand jury testimony and other records suggested that several other high-ranking Vernon officials knew that McBride was O’Callaghan’s wife, though it was unclear exactly how early on.

The charges against O’Callaghan were based on two agreements Vernon approved with O’Callaghan’s wife. The first came in 2007, when she was hired through Project Labor Group, a city subcontractor. After the company folded, she was hired to a second contract in 2009 through the Light & Power Department.

Public records show that in addition to McBride, at least six other relatives of Vernon officials were hired through Project Labor Group, including Malkenhorst’s children and the siblings of another Vernon city administrator, Eric T. Fresch. Over the years, the city has hired a number of other relatives of city officials.

Prosecutors focused on O’Callaghan, however, saying that state conflict-of-interest laws specifically prohibit officials from hiring someone with whom they share a direct financial interest, such as a spouse.

“The law is very clear in what it defines as criminal and not criminal, regardless of what is unethical or improper or a horrible practice for a public agency,” Huntsman said. “The law says you commit a conflict of interest when you make a decision … which you have a financial interest in.”

hector.becerra@latimes.com

sam.allen@latimes.com