Villalobos Quits as Riordan’s Economics Aide

Five months into his job as Los Angeles Mayor Richard Riordan’s chief deputy in charge of economic development, Alfred R. Villalobos has resigned, the mayor’s office said Wednesday.

Villalobos, 50, has been under pressure after stories in The Times detailed episodes from his checkered career as a private financial consultant.

In recent weeks, mayoral assistants said privately that Villalobos was on his way out, describing an episode in which one of Villalobos’ aides attended an “economic summit” with President Clinton--but Villalobos did not.

They also cited what they said were expressions of displeasure about Villalobos’ performance by his immediate superior, Chief of Staff William McCarley. McCarley did not return a call to his office seeking comment.

Villalobos said he was resigning to “return to the private sector” and spend more time with his children and grandchildren.

When his resignation takes effect Dec. 31, Villalobos will become the second of five deputy mayors to have left the fledgling Riordan Administration.

The first was Riordan’s former campaign manager, Jadine Nielsen, who stepped down in October from her post in charge of City Council relations after what other aides described privately as a losing bid for even more responsibility within the mayor’s office.

One person knowledgeable about Villalobos’ departure said he had not been asked to resign but had come to feel uncomfortable in his post.

This person, who spoke on condition of anonymity, said Riordan was aware of a perception in the business community that his economic vision for the city was not being articulated well and that he needed a deputy mayor for economic development with a higher profile.

“But Villalobos was not one of the successful giants of the business community,” said one economic development professional who did not want to be quoted by name.

Riordan’s supposed lack of a clearly stated plan was seen as a potential political problem for the multimillionaire mayor, a lawyer and venture capitalist who campaigned on dual pledges to improve public safety and revitalize a sagging economy.

No replacement for Villalobos has been selected.

In a statement, Riordan said: “Al has worked hard and long for the people of Los Angeles. His input and entrepreneurial experience helped formulate my initial economic development strategies to lay the foundation for Los Angeles’ economic growth. He made great personal sacrifices during the last six months; that’s something I’ll always appreciate.”

Riordan appointed Villalobos as his deputy at the suggestion of one of Villalobos’ old friends, City Councilman Richard Alatorre, who was viewed by Riordan campaign strategists as an important political ally. Villalobos was the highest-ranking Latino in the Riordan Administration.

Before he became deputy mayor in July, Villalobos made his living as an independent financial consultant, specializing in helping minority-owned firms that were seeking government loans or contracts. Long active in Republican circles as a leading fund-raiser among Latinos, he marketed himself in private business as someone with useful political contacts.

The articles in The Times reported that he had been sued 18 times in Los Angeles and Orange County courts, had written off about $350,000 in debts in a 1982 personal bankruptcy and had incurred large gambling losses.

The stories also outlined the complaints of people who said Villalobos took advantage of them financially and reported that he had been named but not charged in a federal bribery prosecution.

In that case, the head of a federally funded economic development agency in San Antonio pleaded guilty in 1991 to a charge that he solicited and accepted thousands of dollars from three men, including Villalobos, who court documents say was performing consulting work for the agency at the time.

Notoriety from the articles led some people active in the economic development field to doubt Villalobos’ credibility.

“Question marks started to appear,” said Jack Kyser, chief economist for the nonprofit Economic Development Corp. of Los Angeles County. “Is he going to be effective?”

Kyser said that Villalobos’ office actually was launching far more initiatives than a similar operation under former Mayor Tom Bradley, but it was saddled with “a perception problem” that it was taking too long to develop plans.

For example, he said, the office has begun planning a major “image campaign” for Los Angeles and is trying to decide how best to take advantage of a new federal program giving tax credits to companies that locate in a disadvantaged zone.

A news release announcing Villalobos’ resignation made no mention of the Times articles, and a spokeswoman for the mayor said she believes that they were irrelevant to Villalobos’ decision to step aside--a move The Times had suggested in an editorial.

“Those stories served as a distraction for him--I mean no one would want stories like that written about him--but did not influence his decision,” said Riordan’s press secretary, Annette Castro. “I think it was an independent decision on his part to spend more time with his family.”

Villalobos’ office said Wednesday that he was out of town and unavailable for comment. But the news release quoted him as saying that he was leaving because he had been working seven days a week and had been neglecting his children and grandchildren.

In the news release, Villalobos said he plans to “return to the private sector,” but will continue serving as an appointee of Gov. Pete Wilson on the State Personnel Board, which administers California’s Civil Service system, and as that board’s representative on the governing body of CalPERS, the state’s public employees’ pension fund.

Villalobos said that his activities as a Wilson and Riordan appointee had proved to be too much work--”the equivalent of two full-time jobs.”