Top-Paid City Official in State : Vernon Administrator--a Study in Power, Control

Bruce V. Malkenhorst ends his daily drive to work in Vernon, an industrial hamlet at the southeast edge of Los Angeles. The surroundings are bleak--manufacturing plants and slaughterhouses, harsh odors, trucks, rumbling trains. It is a city of just five square miles and 90 full-time residents.

Vernon may be an ugly town, a gritty town, but it is Malkenhorst’s town, and he loves it--for good reason. In 14 years as city administrator, he has become the highest-paid city official in California. His $162,804 yearly salary has vaulted him past the city of Los Angeles’ general manager of airports, who earns $153,000, and has lofted Malkenhorst far beyond such lesser government wage-earners as Mayor Tom Bradley, $97,654, and Gov. George Deukmejian, $85,000.

“I always thought if I made this much money I’d be rich,” Malkenhorst said, punctuating his quip with a hearty laugh.

There are perks as well: The dapper, 54-year-old Malkenhorst tools past the dusty lots and chain-link fences of Vernon in a city-leased 1989 Cadillac, gold rings flashing on each hand, a gold band dangling from his wrist. He travels to conferences on city government in Palm Springs, San Diego, San Francisco, and his expense accounts and travel budgets alone total $48,000. Like all Vernon employees, Malkenhorst puts in a four-day week; he devotes his Fridays to golf.

To hear Malkenhorst tell it, he is hardly overpaid. Rather, he considers himself a bureaucratic bargain. He is not only the city administrator; he is also the city clerk, finance director, personnel director and treasurer. He runs the city-owned Vernon Light and Power Co. and is secretary of the newly formed Vernon Redevelopment Agency.

“I think I make a lot of money here, but if I go back into private industry (I’d make) $300,000? $400,000?” Malkenhorst said with the gruff, breezy self-assurance that his critics call arrogance.

The salary, benefits and job titles form only a skeletal outline of Malkenhorst’s dominance over Vernon. A shrewd and aggressive administrator, he has come to control this blue-collar town as though it were a Monopoly board--and he was the only player. His power is unquestioned; even the City Council, a part-time panel that shows little evidence of dynamic leadership, seems to follow his directives out of both respect and trepidation.

For instance, a city councilman--ostensibly one of Malkenhorst’s employers--said when asked about the city administrator’s salary: “For what he’s handling . . . I agree with what he’s making.” Then the same councilman, pausing uncertainly, asked not to be quoted by name.

One-Man Town

Malkenhorst encourages the impression that he alone runs the town, overshadowing the actions of the council.

“He doesn’t try to win popularity contests,” said acting Police Chief Louis Rosenkrantz. “He looks an organization over and, when he recognizes there’s too much fat on the top end, he chops it out, chops it out real clean--almost to the bone. He’s very strong, very much in control.

“He’s also very capable. He just doesn’t give money away.”

Malkenhorst’s hard-nosed cost-cutting and business moves have streamlined the 260-member city payroll, increased revenues and tripled Vernon’s huge budget reserves, now $95 million.

At the same time, he has stirred enmity and alienation with almost reckless indifference. While authorizing his own hefty raises, he has slashed the size of Vernon’s Police and Fire departments in half. He takes pride in his reputation as a tight-fisted fiscal manager and almost intractable negotiator.

Malkenhorst’s reign has not been without challenge. He survived a 1978 strike in which more than 90 firefighters were fired, a grand jury indictment stemming from alleged election improprieties and an FBI investigation of his administration--all challenges that have left him unscathed.

More recently, he has drawn the wrath of environmentalists for supporting a planned $29-million toxic waste incinerator in Vernon--a project that would substantially boost city revenues. He also angered much of Vernon’s business community by proposing tough new restrictions on trucking and warehousing.

“He is ruthless . . . a dictator,” said one longtime businessman, who asked not to be identified. “He is a powerful man . . . and he revels in that power. He has hurt a lot of people over the years.”

Malkenhorst denies that firings or threats are a regular part of his management repertoire, saying he does not know why people seem to fear him. “We’ve negotiated good (labor) agreements with our people,” he said. “We put them on a four-day work week because we had trouble keeping people. Most of the people who work for the city enjoy it.”

Demonstration of Power

But in another breath, he delights in recalling an incident from years ago, when he was new to the job and firefighters were preparing for their walkout. One firefighter in particular was showing up at public meetings and lashing out at members of the City Council.

“I asked the council why they allowed him to do that,” Malkenhorst remembered in an interview, “and they said, ‘Well, what can we do?’ ” Malkenhorst smiled as he related the anecdote. “I said, ‘There’s a lot of things you can do. He works for the city. We’re not a Civil Service city. . . .’

“We just took his job out of the budget. He was gone before the strike.”

With that, Malkenhorst let loose with his distinctive laugh, a laugh that erupts like an electrical storm, brightens his face and bombards the ears of his listeners with a crackling burst of sound.

He has a wide, even grin and a sporty mustache that contribute to an air of competence. He is robust and athletic, an aficionado of softball, golf and ocean swimming. At his best he can be witty, charming and gracious, and yet those attributes never seem to interfere with his judgments at City Hall; they never obscure his view of the bottom line.

At biweekly council meetings he seems bored, leaning back in his chair or mumbling into the microphone on the dais.

Insiders in Vernon consider Malkenhorst’s power to be unassailable, even though, in theory, he answers to the City Council and could be replaced at any time. In practice, he consults council members only when he deems it necessary.

‘Exclusively Industrial’

To understand Malkenhorst’s power it is necessary to understand Vernon, a city unlike any other in Los Angeles County. Founded in 1905 solely to foster industry, it still bears the motto, “Exclusively Industrial.” The town--one of the richest in California in sales tax revenues--stands in sharp contrast to such neighboring cities as Huntington Park, Maywood and Bell, tiny, densely populated enclaves that struggle to pay their bills.

The Vernon landscape is a treeless, jarring sprawl of square buildings. There are no parks, no greenbelts. The streets are creased and bisected by 114 miles of railroad track, and at times the odors from slaughterhouses and other plants produce a stench that is almost suffocating.

Vernon’s sole claim to architectural fame is the mural-covered Farmer John slaughterhouse, a rambling structure that each year produces, among other food items, enough hot dogs to satisfy 3 million Dodger fans.

It most recently was in the news this spring when a consumer group ranked Vernon as far and away the county’s worst polluter among cities releasing airborne hazardous chemicals.

Although 45,000 people go to work every day in Vernon, all but a handful depart before nightfall. The town contains just 32 housing units, 26 of them owned by the city. Those homes and apartments are occupied by a group of city employees who receive subsidized rents, paying as little as $50 to $75 a month for two- and three-bedroom houses. Each occupant must be approved by the City Council. And at least four of those occupants are members of Malkenhorst’s high-scoring, park-league softball team, the Vernon Tigers. (Malkenhorst, the catcher, bats eighth.)

Efforts to create more housing in Vernon have failed, largely because of zoning and policy decisions made by city government. For one thing, chemical wastes have contaminated much of the ground, Malkenhorst said. And, by the city’s reckoning, each acre of new housing would cost 40 to 50 jobs to Vernon’s first priority--industry.

“Kids, you can’t raise them here. There’s no parks,” Malkenhorst said. “And if you want to go shopping, there’s no grocery stores.”

No Real Check on Government

Detractors said the housing arrangement leaves Vernon without the system of checks and balances that is vital to government. After all, the Malkenhorst critics asked--anonymously, of course--what city employee living almost rent-free in a city-owned house would dare to initiate changes at City Hall? Who would step out of line by running for office or by publicly supporting a challenger?

The point seems valid. One resident, city employee Jack Looper, even declined to discuss life in Vernon without written permission from Malkenhorst. Council members, meanwhile, take their elected posts for granted; none bothers to collect campaign contributions, city officials said. The newest member of the council was appointed to fill a vacancy in 1981, and the city’s last contested race, in which two incumbents were reelected, was in 1980.

“You couldn’t get any kind of political toehold in the city of Vernon if your life depended on it,” said Carlton E. Claunch, a former firefighter who campaigned in vain for a council seat in 1978. “It’s absolutely impossible.”

Mayor Leonis C. Malburg, 60, a major landowner whose grandfather John Leonis helped create Vernon, is the most prominent member of the council, a veteran of 33 years. It was the conservative, soft-spoken Malburg who helped to bring Malkenhorst aboard in the mid-1970s, after the retirement of the former top administrator, who apparently lacked his successor’s talent for consolidating power.

Since then, Malburg has liked what he has seen. “I think the feeling is, he’s doing a fine job for the city, or he wouldn’t be there,” the mayor said. “It’s that simple.”

Malkenhorst, a father of five, is a longtime Downey resident who graduated from Compton High School and Woodbury College before working for a number of private companies as a controller. He was with the finance department at the city of Manhattan Beach when Vernon hired him, instructing him to shore up the city’s finances and come to grips with newly forming labor unions.

The directive to Malkenhorst was simple--”Don’t give away the store”--and he followed it with a vengeance.

His role in the firing of city firefighters touched off years of upheaval, even bomb scares.

“Those were really fun times,” Malkenhorst recalled, wistfully.

Although a judge upheld the dismissals, firefighters attempted to challenge the political Establishment. They brought in Claunch, a retiree, who took a room above a cafe and announced his candidacy for office. Almost immediately, he recalled, he was besieged by city inspectors trying to force him to move.

“They said (the room) wasn’t designed for residential use,” Claunch remembered. “They started putting pressure on the landlord, on the people who leased the cafe. One day seven inspectors showed up.”

Claunch and the landlord circumvented the city codes by drafting an agreement that made him a night watchman. When election night came, according to Claunch, the city election officer--Malkenhorst--disqualified a number of ballots; Claunch lost the race to Malburg, the incumbent mayor, by a vote of 33 to 24.

“I had the votes,” he said bitterly. “I still think I won that election.”

Malkenhorst said he did not recall disqualifying ballots that year. The race, however, became the subject of a district attorney’s investigation at Claunch’s request. Claunch charged, among other things, that the mayor lived outside the city. Malburg owned--and still owns--a six-bedroom, six-bath home with a pool in Hancock Park, but claims as his legal residence a suite in a Vernon office tower.

Deputy Dist. Atty. Louis K. Ito, who handled the investigation, recalled obtaining testimony from a maid who said the mayor lived outside of Vernon. Meanwhile, Malkenhorst also faced accusations stemming from negotiations to rehire the fired firefighters.

“The president of the association calls me . . . says he wants to talk to me to see if there’s any chance they can get their jobs back,” Malkenhorst recalled. “I said, ‘You can’t have that (union) attorney involved any more.’ He said, ‘No problem, he’s gone.’ And they got me for soliciting a bribe because of that.”

Ultimately a grand jury indicted both the mayor and Malkenhorst, but each was cleared in court.

Slashed Police Jobs

Malkenhorst next turned his attention to the Police Department. He eliminated many positions and turned others into civilian jobs. Morale plummeted. At the next city election, in 1980, retiring Police Chief Spencer E. Hogan--the resident of a city-owned home--surprised City Hall by proclaiming himself a candidate. The city immediately evicted him, saying city-owned homes are for active employees.

Another resident, Philip Reavis, then president of the Vernon Chamber of Commerce, also decided to run for office. Reavis, the owner of one of the few private homes in Vernon, allowed Hogan to move in, and together they ran to challenge a pair of incumbents.

This time, Malkenhorst disqualified six ballots, subtracting those votes from each of the two challengers. The lost votes made a difference as incumbents Hilario Gonzales, with 35 votes, and Keith K. Kaeser, with 32, won reelection. Hogan ended up with 30 votes, Reavis with 27.

“If you were going to write a Mel Brooks movie, this is the kind of thing you’d make up,” said Reavis, who filed suit over the race but later abandoned it.

Malkenhorst recalled throwing out the ballots because the names on six voter-registration forms were found to be outsiders not residing in Vernon. He pinned the blame on the challengers for bringing them into town.

Under Malkenhorst, the city soon began exploring new ways to make money. One was to take advantage of its own electric-power grid, built by founder John Leonis in the 1930s. Rather than buy all of its power from the Southern California Edison Co., Malkenhorst began purchasing electricity more cheaply on the open market, importing it from Arizona, the Pacific Northwest and elsewhere.

The practice is evidence of his business acumen, supporters said. It has enabled Vernon to boost budget reserves while providing power to industry at discount rates. However, Edison officials now blame Malkenhorst for destroying the once-friendly cooperation between the city and the company, and the two groups are now locked in a legal battle over Vernon’s access to Edison’s interstate transmission lines.

Recently, Vernon has been at odds with environmentalists and officials from surrounding cities, including Los Angeles, over the proposed toxic waste incinerator, a facility that would handle 22,500 tons of hazardous chemicals each year.

Backs Waste Incinerator

Malkenhorst has supported the proposed toxic waste incinerator by saying it would keep chemical wastes off the highways while addressing the problem of overburdened landfills.

Vernon residents are too fearful of the city government to voice any concerns, according to Assemblywoman Lucille Roybal-Allard (D-East Los Angeles), whose staff members attempted to circulate anti-incinerator petitions in town.

“A lot of them were very, very upset about the fact there was an incinerator being proposed,” she said in an interview. “But they were afraid to speak out because they were in housing owned by the city or they had jobs (with the city). The people in Vernon are being held hostage by their own government.”

Similarly, when a group of 28 companies in and around Vernon filed suit against the city to challenge the incinerator and several zoning actions being planned to reduce trucking and warehousing, they arranged to keep their identities secret. The suit--settled after the city made some concessions--was handled entirely by an attorney who shielded the names of his clients.

Fear of Malkenhorst

So extensive is the fear of Malkenhorst that several former city employees and current members of the Vernon Chamber of Commerce declined to discuss him, even privately. Critics said the former employees fear losing their retirement or disability payments; business people fear City Hall retribution.

“You’ll hear that again and again and again,” said Sandra R. Southworth, a Chamber of Commerce board member. “You’d think that this can’t exist in the United States today.”

In Malkenhorst’s view, Vernon has quieted down since his rollicking early days. It seems almost boring sometimes, running the town where hardly anybody lives, making more money than the governor, assured of his position behind the plate for the Vernon Tigers. Still, he plans to stay on.

“Getting old, getting lazy,” he explained, flashing the grin.

“I like it here.”