Business, but Not as Usual

For more than two months now, ballots from April’s City Council election in Vernon have been kept under lock and key at City Hall, uncounted.

Three opposition candidates who challenged incumbent council members have been evicted from the Vernon building in which they were living and are now waiting in limbo for election results.

And amid the chaos, the Los Angeles County district attorney’s office continues its broad investigation of public corruption in the city.

It’s all part of business as usual in Vernon, a small industrial city southeast of downtown L.A.

Almost since Vernon was established a century ago, the town has moved from controversy to controversy.

Its founder, a charismatic Basque immigrant named John Baptiste Leonis, had seen the rapid development of land north and west of downtown Los Angeles. But he saw money to be made in the other direction, on land then held by Chinese and Mexican farmers.

The area had a dirt road running to Los Angeles Harbor and multiple rail lines. So, in 1905, Leonis and two local ranchers incorporated the “exclusively industrial” city, characterized as the first town west of the Mississippi devoted to manufacturing. This remains almost literally true: The city currently has fewer than 100 residents.

A powerful voice on the town’s Board of Trustees, Leonis initially promoted activities that other jurisdictions spurned: gambling, prizefighting and drinking. He leased land to a saloon owner who opened the “longest bar in the world.” On one side was a boxing stadium; on the other, a baseball stadium.

In the 1920s, thousands of workers began streaming in to work at new factories built by Bethlehem and U.S. Steel, Alcoa Aluminum and at the kill plants along Meat Packers Row.

Leonis was at the center of the financial action, operating the town bank, a large stockyard and a feed mill, and he was already drawing flak from critics who complained that he acted like the king of Vernon.

In 1925, The Times did its first front-page expose of Vernon. The paper quoted one foe as saying of Leonis: “In that town, you do not file papers at the City Hall. You simply hand them to John and he puts them in his pocket. If he is in favor of the proposition, it goes through; if he is opposed, that’s the last you hear of it.”

Two decades later, a county grand jury launched a wide-ranging corruption probe that led to Leonis, who by then had become mayor, and five other top officials being indicted on charges of voter fraud.

Prosecutors called Leonis a “boss” who ruled like a feudal lord. They also alleged that he lived not in Vernon but in a spacious home in Hancock Park. Charges against Leonis were dropped, but four other people were convicted, including the police and fire chiefs.

By the time Leonis died in 1953, he had amassed an estate reportedly worth $8 million. The inheritance went to his grandson, Leonis Malburg, who as a boy hunted doves with a BB gun at the family stockyards and took his first job as a messenger at his grandfather’s bank.

For the last 50 years, Malburg has served on the City Council of Vernon, frequently as mayor.

“Vernon is arguably the oldest continuous political machine in the country,” said Mike Davis, a professor of history at UC Irvine and author of several books about Southern California. “There is a continuity of power and rule in this private city that I’m not sure you’ll find anywhere else you go in the United States.”

Vernon is an unlikely dynasty that has endured because its longtime leaders seem to keep those inside the city happy. They offer generous perks to residents and provide a business-friendly environment for employers.

Most of the town’s residents work for the city or are family members of city employees, dependent on Vernon officials for their income. Most also live in city-owned homes.

Employees fortunate enough to be chosen to live in those homes receive one of the best housing deals in the region.

“When they need me, if I’m still here, I’ll die on the line for them because they treat me real good, they give me a good job,” said Albert De La Cruz, a city utility worker who pays less than $300 a month to rent a home on a cul-de-sac behind City Hall.

De La Cruz, 54, said the inexpensive housing allows him to pay for his two daughters’ college education.

A few blocks away, David Muniz, another city employee and resident, credits municipal officials with helping him out after he lost his home in Compton and fell into debt. He now pays rent of about $300 a month for his city-owned home.

“The city helped me out as I tried to get out of the hole,” he said.

The 5-square-mile city has one of the smallest populations in California -- officially 91 residents -- and a heavy concentration of manufacturing that draws 44,000 workers into the city boundaries each day.

“It’s the industrial Mayberry,” said Ben Swett, chief executive of Windowbox.com in Vernon, an online gardening supply company, who praises the city for its excellent services and responsiveness to the needs of businesses.

It’s this strong economic base that may help explain the tug of war playing out over the city’s future, one that started when a group of men mysteriously moved into town in January and three of them submitted papers to run for City Council.

That resulted in only the second contested election in Vernon since 1980.

That year, then-Vernon Police Chief Spence Hogan announced his candidacy for a City Council seat and his resignation as chief. Shortly thereafter, he was evicted from his city-owned home by officials who said that, since he had resigned his city position, he was no longer eligible to live in the city property. He was then able to run for council only because Philip Reavis, the former president of the Chamber of Commerce, allowed him to move into his home, one of the town’s few privately owned dwellings.

Reavis and Hogan both ran against Malburg and the other City Council incumbents, with Hogan winning the vote count. But Hogan’s win was reversed after Bruce Malkenhorst Sr., then city administrator, disqualified six of his votes.

Malburg was sworn in for another term on the City Council, which appointed him mayor.

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Tall and lanky with thick glasses, Malburg, 75, is a gentle, genial guardian of the legacy created by his grandfather.

The heart of the mayor’s world is at Leonis Boulevard and Soto Street, where his La Villa Basque restaurant is a local institution and watering hole. Next door is the three-story Leonis Malburg Building, the most prominent office tower in town. The mayor owns a two-story, six-bedroom, six-bath mansion in Hancock Park, but his official residence -- where he is registered to vote -- is a suite in the office building.

Robert Afar, 69, a general merchandise distributor who has had offices in the building for 20 years, said the mayor “spends a few hours here, a few hours in City Hall and that’s it.” He said he was unaware that the mayor lived in the building.

But Afar -- like others at the Malburg building -- are strong supporters of the mayor and the way Vernon is run. “I can say it’s the safest small city in all of L.A. County, probably,” he said.

Malburg declined to be interviewed for this article. But two years ago, he gave The Times a tour of his first-floor office. It is lined with rows of black-and-white photos from Vernon’s past. There was also a massive hand-painted map of Southern California, with Vernon highlighted in the center. “It’s the hub of the county,” he said.

In February, Malburg marked a milestone. He was honored during a City Council meeting for his 50 years in office, receiving letters of congratulations from throughout the state.

“I got my 50 years now, and I survived, healthwise and otherwise,” Malburg said. “And I beat my dear grandfather, John Leonis, who had 45 years in the city ... by five years.”

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The same night he celebrated reaching 50 years in office, Malburg and the council dealt with this year’s unexpected challenge to their leadership.

A month earlier, eight people had taken up residence in a boxy commercial building. Within days, three of the newcomers -- Don A. Huff, 41; David Johnson, 24; and Alejandro Lopez, 20 -- filed petitions to run for City Council, shocking city officials.

Almost immediately, private investigators hired by the city began following the challengers, and utility crews turned off their power. The building they shared was red-tagged by inspectors. Eventually, police and other officials evicted the office-seekers, claiming the building was not habitable.

The city accused the newcomers of being part of a takeover plot by Albert Robles, a convicted felon who, as treasurer of nearby South Gate, nearly bankrupted that city.

The City Council canceled the election and the members reelected themselves. But a few weeks later, a Los Angeles County Superior Court judge ruled that the city had acted improperly and ordered the election reinstated.

The election was run by City Clerk Bruce Malkenhorst Jr., the son of Vernon’s longtime city administrator.

Bruce Malkenhorst Sr., who served for nearly 30 years as the city’s top manager, is described as a hard-charging administrator who ran Vernon with an iron fist. In the 1980s, when his salary was $162,804, he became known as the highest-paid city official in California.

Before he retired in 2004, the senior Malkenhorst collected more than $600,000 in salary, bonuses and payments for unused vacation.

He retired around the same time the Los Angeles County district attorney’s office launched a public corruption probe in the city. Authorities collected boxes of documents from City Hall and other locations.

Court documents suggest that prosecutors are investigating whether current or former employees misused public funds and that Malkenhorst Sr. is one of the focuses of the probe.

While that investigation proceeds, Malkenhorst’s son finds himself in the middle of this year’s election dispute.

On election night April 11, people on both sides and a cluster of TV cameras awaited results of the voting at City Hall.

Around 9 p.m., Malkenhorst emerged in City Council chambers holding a ballot box. But instead of counting the ballots, he announced that he was going to lock them up at City Hall until legal challenges to the election were sorted out.

Neither father nor son would comment for this article.

“Bruce Jr. is trying to apply the playbook that his father used so successfully,” said attorney Albert Robles, who represents the challengers. (He is not related to the former South Gate official of the same name.)

But in Vernon, the view is much different. Malkenhorst, Malburg and other city officials are doing the right thing, residents said, by opposing forces who want to take over the city for their own purposes.

Pierre Erro, 59, said he is Malburg’s nephew and has lived rent-free above La Villa Basque for several years.

He said his uncle has devoted his life to Vernon and will fight to the end to protect his family’s legacy.

“My aunt calls him the bachelor because she hardly sees him,” Erro said. “We tell him that he’s married to the city of Vernon.”