Scarce Federal Aid Marks Road to Riot Recovery : Funds: While millions go toward emergency relief, little is left for long-term economic revitalization.

City officials were bewildered recently when Housing and Urban Development Secretary Jack Kemp, visiting one of Los Angeles’ poorest housing projects, announced that the city would be receiving $137 million in federal funds to help recover from the riots.

Was this, they wondered, some unexpected--but welcome--new grant that no one had bothered to tell them about?

After studying the numbers more closely, officials concluded that the HUD chief had engaged in a little creative accounting. The $137 million in fact had been slated for city housing projects even before the riots.

“It is an example of the kind of gamesmanship that is being used by the federal government to cover up the fact that not much money is there,” one city official said acidly.

Indeed, an assessment of the federal response nearly two months after the nation’s worst contemporary urban riot reveals a mixed bag.

Millions of dollars have been committed for emergency relief, employing youths this summer and providing additional housing vouchers to assist low-income residents. But there is precious little money to accomplish the kind of long-term economic revitalization that nearly everyone agrees is needed.

Critics note that most of the aid that has been promised to the city is equivalent to what would have been provided had the devastation been caused by an earthquake or other natural disaster. Where, they ask, is the money to alleviate the underlying causes of the civil unrest?

Federal officials concede that help in the riot’s aftermath is limited. “The programs in place are designed for natural disasters,” said Alfred A. DelliBovi, co-chairman of a presidential task force on the Los Angeles recovery.

The acknowledgment came this week during a tour of riot-damaged businesses, in response to a question from the owner of a small shop. Why, he wanted to know, had the task force been unable to cut through red tape to obtain more lenient loan terms for riot victims?

“Without a declaration of a disaster there would have been no programs available,” said DelliBovi, who is deputy secretary of housing and urban development. “The President used the tools that were available in the toolbox.”

There is deepening concern among residents in hard-hit South Los Angeles communities that the federal response is beginning to mirror the actions taken after the Watts riots nearly three decades ago. They worry that the initial spate of emergency funding will not be followed with more substantial programs to provide jobs, education, training, child care or the kind of grass-roots community involvement that might help turn around their lives.

“The commitments from the Watts riots have not been fulfilled. These communities have not been rebuilt,” said Brenda Slaughter, an artisan who makes baskets for a small Vernon Avenue shop that was visited by members of the task force. She has been through three riots--including 1960s unrest that engulfed Watts and Cleveland--and said she does not want to endure a fourth.

“They are throwing bits and pieces of money around, and it’s not going to help unless you teach people how to use the money, unless you have a real plan,” she said.

According to a report by the task force, relief aid to the city and county is expected to exceed $1.2 billion. But critics--including some city officials--question the figure and contend that at any rate, little of the money has found its way to local government coffers.

“It is very hard to determine what the bottom line is and what all these shifts of money are really producing,” said Mary Ochs, director of the economic development unit of the Legal Aid Foundation of Los Angeles, which has been monitoring the federal response. “Some of it is definitely illusion. It’s smoke and mirrors.”

So far, $195.2 million in federal grants and loans have been committed to the area. But most of the money announced to date for recovery efforts was either already in the pipeline for Los Angeles or is directed at meeting emergency needs.

The largest sum of new money--$19 million--is slated for President Bush’s crime-fighting “weed and seed” program, which so far has been tested only on a limited basis in a few other cities.

The highly touted $1.2-billion urban aid package approved by Congress last week provides about $10 million for summer jobs in Los Angeles for disadvantaged youths, part of a $500-million program nationwide. But most of the remainder of the money allocated by the bill will replenish disaster accounts, rather than add to amounts already committed to Los Angeles or other cities.

Although federal officials agree that there is a role for Washington to play in recovery efforts, they argue that wider problems exposed by the unrest will not be solved by throwing more money at them.

“If there is anything we learned from the War on Poverty in the ‘60s it is that just pouring out money won’t work,” DelliBovi said. “You need to have the money to do what needs to be done . . . but it doesn’t take a lot of big money.”

Still, as city leaders negotiate for greater amounts of federal dollars, they complain that the response so far has been shockingly shallow.

“The (money) committed has been fairly soft--and we ought to be doing more than that,” said Wilfred Marshall, director of business and economic development in Mayor Tom Bradley’s office.

“I’ve been out on the streets and it’s fairly hostile out there,” Marshall said. “I hope we can take advantage of this breather to tend to the businesses that are the backbone of the community. But it’s going to take more than what we’ve got so far.”

Marshall said city officials were stunned by the priorities displayed when the Department of Commerce decided to grant millions of dollars to the tourism industry and Rebuild L.A., the riot-relief effort headed by businessman Peter V. Ueberroth.

Funded through Commerce’s Economic Development Administration, the grants provided $1.5 million for the Los Angeles Convention and Visitors Bureau and $3 million in organizational expenses for the Rebuild L.A. team.

Bradley, who initiated Rebuild L.A., attended the splashy presentation ceremony at City Hall. Yet, according to Marshall, “we were shocked that all that money had gone for other things,” he said. “When you think about all those people out there who are going to suffer, who lost businesses and who can’t wait for loans to come through. . . . These people are going to be out on welfare.”

The city did win a $1.4-million Economic Development Administration grant--but that was money that had been destined for Los Angeles before the riots to support a local fish cannery. The city asked for, and received, permission from the Commerce Department to use the money for high-risk disaster business loans instead.

Kemp’s pledge of $137 million is the largest single chunk of aid announced to date. Standing before about 250 youths at the Nickerson Gardens housing projects in Watts, Kemp announced vaguely that the money would go toward “modernization” of public housing stock, “resident management control and making jobs.”

Publicly, city officials have said that they were not sure what the secretary was talking about. They have requested a breakdown of the funds, but have received no reply from HUD.

Officials said it was likely that the amount referred to housing funds already allocated to Los Angeles before the riots. Although the numbers do not jibe exactly, the city--under federal formulas--was set to receive about $62.5 million in community development block grants, $24 million for modernization, about $35 million in grants promoting home ownership for low-income residents and about $3.6 million for Section 8 housing subsidies.

One city official who attended the youth forum said Kemp stepped out of his car, asked aides how much HUD money the city would be receiving this year, wrote the number down on an envelope and used that as the basis for his announcement.

Kemp could not be reached for comment. But DelliBovi defended his chief. “The bottom line is that it is all money that can be used to help in their efforts,” he said.

Critics contend that the lack of an overall Bush Administration strategy for confronting urban issues has helped shape the federal government’s response to the Los Angeles upheaval. Faced with the political necessity of showing a commitment to solving the problems of the inner city, Administration officials have resorted to repackaging old money and old ideas, they charge.

“When you ask if there is more they can do, . . . it’s like asking if the Reagan/Bush Administrations have had an effective housing policy,” said Joseph Shuldiner, director of the city Housing Authority. “The fires were primarily directed at commercial establishments. The major kinds of responses we need are things that address human needs.”

At a meeting Thursday of the City Council’s Ad Hoc Committee on Recovery and Revitalization attended by representatives of the presidential task force, Councilwoman Rita Walters charged that prior to the riots, Bush had failed to address conditions that may have prevented the unrest.

“What is he prepared to do now that is real and substantial?” she asked.

Task force member Robert E. Grady, deputy director-designate of the Office of Management and Budget, refuted the charges and blamed congressional inaction for continued urban distress.

“I strongly disagree that the President just discovered problems with the cities,” Grady responded heatedly. “The President has proposed enterprise zones in each of his budgets, and we believe they would show results if Congress would get moving and enact them.” Businesses would receive tax breaks for relocating in the inner-city zones.

The Bush Administration also has presented the “weed and seed” program as a centerpiece of its long-term commitment to revitalizing urban communities, including Los Angeles. The theory is to “weed” out gangs, drug dealers and other criminals from communities, and then “seed” the areas with social-service programs.

But critics say the program falls short--that it is mostly a law enforcement effort and does not address the root causes of social ills. To date, the program has not been fully implemented anywhere.

“My objection to ‘weed and seed’ is that it sends out the wrong message,” said state Sen. Diane Watson (D-Los Angeles), who is chairwoman of the Senate Special Task Force on a New Los Angeles. “Let’s talk about feeding and building. These riots have changed our landscape. . . . The eruption could happen again at any point as long as the causes are still out there.”

City Council chambers have not been the only arena where task force members have encountered heat over the federal response to the riots. Merchants challenged task force members during their walking tour Wednesday of riot-damaged areas.

Shopkeeper Max Ro, for instance, wanted to know why the government cannot offer him an interest-free loan to rebuild his small discount store near Koreatown, which was looted during the riots.

There already has been much criticism of the complexity of Small Business Administration loan applications and the pace at which SBA loans have been awarded. But even those like Ro, who have applied and been approved for loans, complain that the help is not enough.

Ro, who lost $90,000 worth of merchandise in a blitz on the second night of destruction, feels the genesis of the riot was obvious. The upheaval, he says, should have been prevented. Since the authorities are partly culpable, he asks, why can’t riot victims be fully compensated?

He got up his courage and challenged the federal officials.

“I appreciate the help I’ve received. But if this is the hand of the government reaching out, then it should show some mercy. A loan is not enough,” he said. “Mine is just a small voice from one little part of the nation, but I hope that my concerns will be heard.”

DelliBovi told him they would be.

EXCESSIVE FORCE CHARGES: Amnesty International accuses LAPD, Sheriff’s Department of violating human rights. B1

Federal Riot Aid for Los Angeles

By their own account, federal agencies have committed $195.2 million to local government and riot victims in the Los Angeles area. To date, however, little money has reached local coffers. And it is unclear how much assistance is newly allocated, as opposed to money that was destined for the Southland before the riots.

EMERGENCY OR SHORT-TERM RELIEF AGENCY AMOUNT Disaster assistance loans Small Business $52.9 million Administration Reimburse local government for Federal Emergency $49.9 million riot-related expenses Mgmt. Agency Temporary jobs and training Labor Dept. $14 million Summer jobs for disadvantaged Labor Dept. $9.7 million youths Summer jobs for disadvantaged Agriculture Dept. $5.8 million youths Mortgage and rental assistance FEMA $4.3 million Police and sheriff’s overtime costs Justice Dept. $3 million Crisis counseling FEMA $2.4 million Food for L.A. Regional Food Bank Agriculture Dept. $2 million Assist tourism industry Commerce Dept. $1.5 million Disaster relief grants FEMA $1.4 million Disaster assistance loans Commerce Dept. $1.4 million Disaster-related unemployment FEMA $928,000 assistance Housing aid FEMA $271,000 SUBTOTAL $149.5 MILLION LONG-TERM ASSISTANCE AGENCY AMOUNT Subsidized housing for Housing and Urban $21 million * low-income renters Development “Weed and Seed” program to Various departments $19 million fight crime, boost social services Rebuild L.A. Commerce Dept. $3 million Urban gardens Agriculture Dept. up to $2.7 million ** SUBTOTAL $45.7 MILLION TOTAL $195.2 MILLION

* HUD says it is making $29 million in housing aid available.

** Total depends on amount of matching funds raised by Rebuild L.A.

Source: City of Los Angeles, Office of the Mayor, federal agencies