Topics / LAW : Harbor to Help L.A., Long Beach Fight Suit

The ports of Long Beach and Los Angeles find themselves in the awkward position of fighting a suit that would enrich them by millions of dollars.

The cities of Long Beach and Los Angeles face a lawsuit that could make them return $90 millon to the ports.

But, ironically, Long Beach and Los Angeles harbor commissioners have agreed to help pay legal fees to fight the suit.

Raymond Veltman, a retired trucking company owner from West Los Angeles, is suing port cities throughout California for the money the cities took from their respective ports under state law during the past two years.

A special bill passed by the State Legislature during the 1992-93 budget crisis permitted cities to take excess funds from their ports.

Veltman argues that the law is unconstitutional and hopes to force the cities to repay the $140 million diverted to the cities’ general funds between 1992 and 1994.

The class-action suit was filed in Los Angeles Superior Court last month.

The suit also names the State Lands Commission, the Department of Finance, Lt. Gov. Leo McCarthy, State Controller Gray Davis, the cities of Oakland, San Diego, San Francisco and others.

Veltman’s attorney, Richard I. Fine, said transfer of the money violates the California Tidelands Trust. “You can’t give the money as an outright gift,” Fine said. “It’s against the California Constitution.”

He argues that port authority trust funds were established specifically for navigation, commerce, fisheries and other harbor uses. The funds, contributed by taxpayers, cannot be used to balance city budgets, he said. The $69 million the Port of Los Angeles transferred to city coffers is the most money paid out under the state law. Long Beach diverted $21 million.