Bernardi Suit Seeks to Void Raiders’ Deal

A lawsuit asking that Irwindale’s deal with the Los Angeles Raiders be voided as a violation of state laws regulating municipal grants to private parties was filed Tuesday in Superior Court by Los Angeles City Councilman Ernani Bernardi.

The suit asks that the Raiders be ordered to return the $10-million cash advance they have received from Irwindale and that the $10 million provisionally committed be withdrawn.

Bernardi said in the filings that he was acting as a Los Angeles County taxpayer to block the Aug. 20 deal under which the Raiders would leave the Los Angeles Memorial Coliseum and build a football stadium in the San Gabriel Valley city.

He claimed that tax receipts from the proposed stadium would wrongfully go to Irwindale and not to the county, thus depriving him and other county taxpayers of services that might otherwise be financed by the taxes.

Temporary Restraining Order

Bernardi’s attorney, Murray Kane, who has often represented the Los Angeles Community Redevelopment Agency, said he contemplates asking the courts to issue a temporary restraining order blocking the Irwindale-Raider deal, pending a longer hearing of the suit.

In Irwindale, city spokesman Xavier Hermosillo declared, “We knew there would be lawsuits. We knew there would be people attempting to stop this stadium. But despite the protestations of Mr. Bernardi, they cannot force (Raiders owner) Al Davis to live in a house he does not want to live in.”

Hermosillo added that he fears that the effect of the opposition would be to force the Raiders to move outside the Los Angeles area to Oakland or Sacramento, for example, two cities that have reportedly been trying to attract the team.

According to the terms of a memorandum of agreement between Irwindale and the Raiders, Irwindale must put together the financing and land for the deal by Nov. 4 or lose the $10 million advanced to the football team. Davis has said he intends to adhere to that deadline, although Irwindale officials have said there is some elasticity in it.

Bernardi’s taxpayer suit was no surprise to Los Angeles officials, who have been looking for ways of keeping the Raiders in the Coliseum. Just last week, Mike Antonovich, chairman of the Los Angeles County Board of Supervisors, said he had been informed that there would be such a suit.

Richard B. Dixon, Los Angeles County chief administrative officer, delayed an expected report to county supervisors on a proposal that the county agree to let Irwindale use parcels of county-leased land for stadium parking. Dixon released a Sept. 2 letter in which he asked tough questions of Irwindale officials about the details of the deal.

Among Dixon’s questions were some of the same ones raised in Bernardi’s suit, dealing with whether tax receipts that might otherwise go to the county would be diverted to Irwindale.

Bernardi’s suit charges that in committing Irwindale residents to “loan” $115 million to the Raiders for construction of the stadium, the Irwindale City Council “ignored and brushed aside a host of constitutional and legal restrictions controlling such governmental largess from California cities toward the private sector.”

It maintains that Irwindale officials “actually paid the Raiders $10 million in cash and placed $10 million (more) in escrow, all of which is purportedly now the Raiders’ money whether or not the stadium is built. The city has given the Raiders $20 million with literally ‘no strongs attached.’

“Such gifts of public funds are illegal, and the debts and obligations created by (the Irwindale-Raider agreement) and the lack of procedure by which the funds have been released are in gross violation of numerous financial, statutory and constitutional restrictions on the City Council and other officials of the city.”

‘Illegal Actions’

The suit asks the court to declare the Irwindale-Raider agreement and the initial payment of $10 million payment to the Raiders to be “illegal actions taken by the city . . . and of no force or effect.”

In addition, the court is asked to order the Raiders to return the $10-million cash advance and direct the city to recover from escrow the other $10 million it has set aside to give the Raiders after Nov. 4, assuming financing and land for the deal are obtained by then.

It also asks that “the city and its agents be temporarily and permanently enjoined from undertaking any further actions to comply with the agreement,” including placing on the November Irwindale ballot another $10-million bond issue, as foreseen under the agreement, or issuing any other bonds to satisfy the city’s obligations under the agreement.

Bernardi also asks the courts to have Irwindale pay his legal fees.

Defendants in the suit include the five Irwindale city councilmen, members of the Irwindale Redevelopment Agency, Irwindale City Manager Charles Martin, Irwindale Treasurer Abe Dedios and the Los Angeles Raiders.

Citing an Aug. 20 memo from Dedios to Martin and an Aug. 25 memo from Martin to the Irwindale City Council, Bernardi’s suit also alleges that “city officials rushing the deal through knew that the expenditures and the (Irwindale-Raider agreement were) illegal.”

‘A Fraudulent Artifice’

“All previous drafts of the (agreement) named the Irwindale Redevelopment Agency as signatory,” the suit says. “As the deadline for action by the city neared, the city’s name was inserted in the document in place of the redevelopment agency.” This, it charges, was “a fraudulent artifice to expend funds actually belonging to Irwindale Redevelopment Agency and to use redevelopment agency powers to assist the Raiders’ move to Irwindale.”

As exhibits, the suit cites a memo from Dedios to Martin on Aug. 20 that he has been advised by the city’s bond counselors, the firm of Sabo & Deitsch, that “the loan to the Raiders is not among the investments authorized by the government code for cities’ surplus funds. . . .

“I suggest that we exchange the $10-million city check (to the Raiders) with a (redevelopment) agency check,” he concludes.

In what Kane said was Martin’s handwriting, a response is scribbled across Dedios’ memo saying: “Don’t worry about it. These things happen when you are hurrying. Switch over to CRA (Irwindale Community Redevelopment Agency). It’s all in the family.”

Martin’s Aug. 25 memo to the City Council, as exhibited in the suit, says:

“I have been concerned about some of the procedural steps that should be corrected.

“The agreement was signed with the city as the signatory only because that was the group that was in session and the agency with the $10 million of cash at the moment. It is probable that we will switch from the city to either the CRA, IDA or a new stadium authority.”

Public Documents

Kane said he obtained the memos from Dedios and Martin by going to Irwindale City Hall and asking for public records in the case. A municipal clerk gave him them among other records, he said.

Hermosillo, the Irwindale spokesman, responded Tuesday night that there was “nothing sinister” in a switch from the city as the financial provider to the city’s redevelopment agency. He characterized this as simply a procedural matter.

The suit says that regardless of what Irwindale agency was giving the money to the Raiders, “the agreement requires a transfer of public property for inadequate consideration as well as an illegal direct subsidy of a private business.

“This complaint seeks to right the legal wrongs perpetrated on the citizens of Irwindale, the taxpayers of the city of Irwindale and of the county of Los Angeles and on holders and on future holders of city general obligation and other bonds which have been and may in the future be issued to help finance the Raiders’ own private stadium,” the suit says.

In another development Tuesday, it was learned that Martin had apologized in writing to Assemblyman Mike Roos (D-Los Angeles), author of a bill in Sacramento that would prohibit the sale of bonds by Irwindale to finance the Raiders stadium, for Hermosillo’s remarks at a recent press conference accusing Roos of being biased against Irwindale because it is populated largely by Latinos.

“This office does not hold any thought that you or any member of your staff has taken any position based on a racist position,” the city manager wrote Roos. “We know that your position is based upon the facts now evident to you concerning the bond issue, and by the same token, our confidence is based upon the facts that we have in front of us.”