DeWitt Failed to Report Contributions, Files Show

When Councilwoman Vera Robles DeWitt filed personal and corporate bankruptcy actions in 1984, she failed to disclose campaign contributions made on her behalf by two companies in which she held an interest, public records show.

A comparison of DeWitt’s filings in U.S. Bankruptcy Court and her state-required campaign disclosure reports shows that she did not reveal in the bankruptcy documents $7,804 in political contributions that her companies made toward her successful council race in April, 1984.

Fiscal Watchdog

DeWitt declined to comment specifically on the discrepancies between her federal and state filings. DeWitt, who bills herself as a fiscal watchdog on the Carson council, called The Times’ query into her bankruptcy actions--which are not widely known about in the city--a “personal attack” unrelated to her performance as a public official.

In a brief written response to questions from The Times, the councilwoman acknowledged the political expenditures by her businesses, which are legal under state law. She said they were in-kind contributions of materials and services.

The bankruptcy forms, however, call for the disclosure of “personal withdrawals of any kind.”

“You’re supposed to disclose everything that could have even a slight bearing on this,” said Kenneth N. Klee, an attorney who practices bankruptcy law and teaches at UCLA Law School.

Specifically, on her personal bankruptcy petition, DeWitt reported only that one of her former companies, R & R Total Instant Printing, had given her $2,000 and she did not list any reason. In a corporate bankruptcy petition filed for Posse Police Products Inc., for which DeWitt was the chief stockholder, DeWitt only listed taking about $1,000 in expense reimbursements.

On campaign disclosure reports, however, DeWitt said her businesses contributed $7,804 to her election campaign. R & R contributed $4,704 in campaign printing materials during the time in question, and Posse contributed $100 in cash and $3,000 in “professional consulting services,” according to reports DeWitt filed. The reports did not say who performed the services.

The bankruptcy records indicate that as DeWitt successfully campaigned for her first full term in office in 1984 to become part of a council majority bloc whose major election issue was “fiscal responsibility,” she and her two small businesses were on the brink of financial disaster.

Just 10 days after DeWitt took office in April, 1984, she filed a petition for reorganization under Chapter 11 of the federal bankruptcy code, which gives an individual or a company protection from creditors while reorganizing assets and debts. The action included her and R & R Printing, a Long Beach-based company that she owned.

Another Bankruptcy

About a month later, DeWitt filed a corporate petition under Chapter 11 for her second company, Posse Police Products Inc., which manufactured law-enforcement accessories in Long Beach. At the time, she was the only officer and chief stockholder in the firm, holding 75% interest, according to her filings. Her ex-husband, F. Carlos DeWitt, held a 25% interest, according to the records.

Papers filed by the company when it was incorporated listed F. Carlos DeWitt as chief stockholder and president. In her written statement to The Times, Vera DeWitt said she was not in control of the company until it was too late to save it.

Several months after DeWitt filed the Chapter 11 petitions, federal court officials decided that the councilwoman’s corporate and personal estates should be dissolved rather than just reorganized. Such determinations are commonly made when a petitioner’s liabilities greatly exceed assets.

According to her bankruptcy documents, DeWitt consented to the dissolution, which, in legal terms, converted the Chapter 11 reorganization proceedings into Chapter 7 bankruptcy proceedings. Later, according to bankruptcy records, both of DeWitt’s bankruptcies were deemed “no-asset” cases--that is, that all valuables either were indebted beyond their worth or were negligible.

In late 1984, bankruptcy records show, the city of Long Beach was told that DeWitt’s manufacturing company was so broke it could not pay the $72 it owed for gas service. In DeWitt’s personal bankruptcy, Bank of America’s Mastercard officials were told DeWitt could not cover her $350 balance. And a Carson electrician was informed of DeWitt’s inability to pay her printing company’s $260 bill.

Few Were Paid

In fact, few of the the councilwoman’s 109 personal and corporate creditors--including several government agencies and numerous private businesses with a combined total of more than $550,000 in claims--saw a nickel of their money, according to records. Debts ranged from $21 for a subscription to Inc. magazine to a $114,000 business loan from the Government Funding Corp., a private lending company that deals exclusively with government-guaranteed loans.

Some of those paid completely or in part were several financial institutions and at least one government agency, the Small Business Administration, that held security in her companies’ equipment and in her house. DeWitt’s house in Carson was valued at $115,000 and had four deeds of trust against it, for a combined mortgage of $171,000, records show.

In earlier interviews with The Times, DeWitt said that the house was sold to help pay off the mortgages and that she now lives with her father in Carson.

While her creditors were awaiting word on whether they would be paid for their goods and services, the councilwoman launched a new company, made additional contributions to her political campaign and took out a bank loan for $3,000 to buy a computer to expedite her campaign mailings, according to state disclosure reports, state corporate records and an interview with DeWitt in January.

Bankruptcy experts say it is legal to channel money that is earned after a bankruptcy petition is filed into new endeavors. It is also legal to take out loans after filing bankruptcy, but few financial institutions are willing to grant loans to just-bankrupt individuals, the experts said in interviews.

Progressing in Court

During the year and a half that DeWitt’s bankruptcy actions were progressing in court, state records show that:

- DeWitt was organizing a new company in Carson, Posse Sales, which sold law enforcement items primarily to uniform stores. In February, 1985, DeWitt filed with the state a notice of intent to issue to herself stock worth $1,500 for the company. In April, 1985, DeWitt reported in her city economic disclosure statement that she drew a gross income of more than $10,000 from the firm.

- In May, 1984, the councilwoman’s printing shop contributed $346 more to her campaign even though the company was in bankruptcy proceedings.

- In June, 1985, DeWitt made a $2,200 loan to her campaign from herself, whom she listed as president of the newly organized Posse Sales.

- DeWitt borrowed $3,000 from a bank run by a political ally, Michael I. Mitoma, to buy the computer to systematize campaign mailings. Mitoma is chairman and president of Pacific Business Bank in Carson and was supported by DeWitt in his unsuccessful bid for City Council in April.

Mitoma said he was not aware that DeWitt was still in bankruptcy proceedings at the time of the loan, which he said has since been repaid.

Mitoma said the loan was approved because the computer was used as collateral and because the loan had two guarantors: DeWitt and another person he would not identify.

DeWitt’s campaign statements, which call for full disclosure of any guarantors or co-signers, list only herself as the guarantor.

Other than her string of debts, DeWitt’s bankruptcy petitions provide few details of the councilwoman’s financial circumstances. DeWitt has declined to explain her financial condition.

Apparently, however, the difficulty began at least several years ago. A spokeswoman at the secretary of state’s office said the state Franchise Tax Board suspended the rights of Posse Police Products to do business in California as a corporation in February, 1983, because it failed to pay corporate income taxes.

DeWitt would not comment on why she did not pay the taxes or say whether she continued selling her products. F. Carlos DeWitt, then president of the company, also has declined to comment.

In interviews with The Times early this year, Vera DeWitt said that before the couple’s divorce--which was final in March, 1984, just before the bankruptcy actions were filed--F. Carlos DeWitt held a greater share of Posse Police Products’s stock. In her recent written statement, De Witt said she was not in control of the company until “a point when it seemed impossible to salvage.”

Fiscal Responsibility

She added: “I am now, and all along have been, an advocate of fiscal responsibility both in city government and in personal business. However, there are times as in this case . . . when one must share some of the responsibility and yet not have the authority to do what is right.

“I see no irony and no inconsistency in this position and my actual actions in the City Council, where I do have the authority as well as the responsibility.”

During her years in office, DeWitt has accused numerous city officials of not monitoring Carson’s finances carefully. The councilwoman regularly questions Carson’s budget practices and asks about even minor items in the city’s register of demands, a comprehensive listing of bills that must be approved by the City Council before payment.

But in her bankruptcy documents, DeWitt said that Posse Police Products, formed in 1978 to manufacture products such as ticket-pad holders, had never had an inventory, and that its books had not been audited in the previous two years. R & R printing, which had operated in Carson before it moved into the Posse Police Products plant in Long Beach, had not been audited either.

When asked on bankruptcy forms whether she was being sued, DeWitt stated that she had “collection litigation pending,” without detailing the nature of the proceeding, title, assigned number or court location, as requested in the document.

Suit Not Reported

DeWitt failed to mention that she was being sued by one of her former partners in R & R printing.

In early 1983, former partner Anna Ramirez of Gardena filed suit against DeWitt for allegedly failing to reimburse her for $4,000 and for allegedly leaving her liable for about $18,000 in debts.

Neither DeWitt nor Ramirez would comment on the lawsuit, which is set to go to trial Sept. 9.

Federal bankruptcy records also show that:

- DeWitt owed money to local politicians. These debts included $8,983 in rent owed to Councilwoman Kay Calas, who leased offices in Carson to DeWitt for the R & R printing operation; $5,300 to a former councilman, Sak Yamamoto; and $5,000 to Planning Commissioner James P. Bradley, who was appointed after DeWitt’s election in 1984 by a council majority that included DeWitt. Bradley also sits on the board of directors at Pacific Business Bank, where DeWitt got the loan for the computer.

In her written statement to The Times, DeWitt responded: “I would not consider James P. Bradley or Sak Yamamoto as politicians if the definition of a politician is one seeking or holding public office. I’ve never felt a conflict or that I’m compromised in any way on my positions in my role as a council member.”

- DeWitt’s Posse Police Products owed $20,000 to an employee of a developer who had a project before the City Council. That employee was Marshall Riconosciuto, overseer of convicted political fixer W. Patrick Moriarty’s unsuccessful plan to build a business-industrial center atop a closed city dump.

Although DeWitt voted on matters affecting Moriarty’s project, she has said in previous interviews that she does not believe that her financial obligations created a conflict of interest.

- DeWitt--who as a councilwoman had admonished the estimated 21% of Carson residents who failed to pay their trash bills in 1984 when widespread delinquency was a controversy in the city--owed $534 to the city’s trash hauler, Western Waste Industries, for trash service it provided in Long Beach to Posse Police Products. In her written statement, DeWitt said: “The problems, charges, unpaid bills were incurred by the company’s management at the time and not by me.” She did not say who was managing the company then.

- The councilwoman and her company, Posse Police Products, were ruled to be in contempt of court for failing to follow a judge’s order to leave the property leased by her company after she had filed for bankruptcy. DeWitt also was ordered to pay attorney’s fees of $742 associated with the legal action taken to force her off the property by landlord James Joseph Sojka, to whom she already owed $3,980. Bankruptcy documents do not state whether DeWitt paid the attorney’s fee, which was given “super-priority” over other debts. DeWitt would not comment.