Council Members' Feud Escalates Over Expense Account Use : La Puente: Official calls on district attorney to probe colleagues' alleged misuse of funds. Her opponents accuse her of similar misdeeds, and direct city staff to take punitive action.


The already touchy, sometimes cutting relationship between La Puente's first councilwoman and the council majority has devolved into a full-scale public battle, with each side openly accusing the other of expense account misdeeds.

Councilwoman Sally Holguin-Fallon has called on the district attorney to investigate the other council members' expense records. In response, they have directed the city to dock her car allowance and cancel her city credit card for failing to turn in her expense receipts.

The conflict began late last year, when city staff reprimanded Holguin-Fallon for failing to submit records of her purchases on two city trips. Both trips were to conferences for the California League of Cities in September and October last year.

The councilwoman called the reproof harassment, and, saying it was in protest, withheld the documents longer.

The council majority passed resolutions to force her to submit her documents. She called the district attorney and dug up expense records said to show that her council colleagues had used city money to pay for alcohol, room service and, in one case, the rental of an X-rated movie. Her council opponents directed city staff to cancel her city MasterCard and deduct $574.49 from her car allowance for a hotel bill, a book and a video she had purchased on one of the trips.

"If you want to make a statement, it's OK, but don't do it with taxpayers' money," said Councilman Louis Perez.

But Holguin-Fallon argued that the council and staff's actions are vindictive, and that the other council members' expense records reflect more serious abuses of city funds.

Finance Director Ted Abo said it's the first time during his nine years with the city that a sitting council member has lost use of a credit card, and the first time the district attorney has been drawn into such a fray.

Holguin-Fallon, who took office in April, is accustomed to being odd woman out on the La Puente City Council, where her priorities, such as planting flowers or encouraging volunteerism, and tendency to question council proceedings often conflict with the previously swift flow of council decision making.

At every council meeting, Holguin-Fallon is noted for loading the council agenda with items for city improvement. Her proposals to create an education commission, develop on-site recreation at parks, and to start a community volunteer program for free home improvement all have died for lack of a second. Her fellow council members often scoff at her ideas, which they consider poorly prepared and politically naive.

"She puts things on the agenda with no background," Perez said. "She doesn't do her homework."

But Holguin-Fallon was determined to do her homework when it came to investigating expense documents. Incensed by the council's criticism of her expense records, Holguin-Fallon looked over five years of records and unearthed credit card statements from a 1991 conference in Palm Springs that show several movie rentals by Councilman Perez, including one charge of $9.95 that the hotel identified as an X-rated film.

Perez said he does not recall renting an X-rated movie and suggested that it may have been a billing error by the hotel.

"I don't remember what happened four years ago," he said. "I look at the bill at the end of the day, and if there's a few bucks missing I'm not going to cry about it. . . . When it says 'movies, $4, $5'--it didn't strike me as important at the time."

Holguin-Fallon noted that the same bill showed a $25 charge from the lobby lounge, but Perez bristled at her suggestion that that was for alcohol.

"I'm a diabetic," he said. "There's no way that I'm going to drink." He said he was buying other refreshments that showed up on the service bar tab.

Holguin-Fallon questioned other credit card charges, such as a 1993 bill from the Palm Springs hotel to Councilman Edward Chavez that listed nearly $100 in room service and bar charges. Chavez could not be reached for comment.

In addition, she identified a number of records for cash advances of $200 or $300 to Perez, Chavez and Mayor Joe Alderete that are missing supporting documents.

But Alderete alleges that Holguin-Fallon is responsible for the missing paperwork.

"Everything was in writing there. She took (the records) out," Alderete said. "What she did with the documents, I don't know."

Alderete said that council members attend California League of Cities and Contract Cities of California conferences in cities such as Palm Springs and Sacramento. There is no policy on how much council members can spend, Alderete said, but there is a policy on prompt return of receipts. Council members pay for everything--including hotel, dinners, even movies--by using their credit cards.

Each cash advance must be backed up with an itemized list of expenditures, and receipts for any items purchased. According to Holguin-Fallon, any of the cash advance records do not have the required receipts, and in some cases, don't even have a list of expenditures to account for the money. One record of a cash advance to Perez in May, 1991, listed expenditures of $32, but was accompanied only by a $4.79 receipt for Denny's, dated April 17.

Perez refused to comment on that or other expense account records, saying that Holguin-Fallon had bypassed the city's procedure for requesting records through the city clerk, and inappropriately sorted through and copied the documents herself, with assistance from a resident.

"As far as I'm concerned, that compromised the whole record system," Perez said.

Holguin-Fallon requested an investigation by the district attorney's office, but Richard Goldston, the investigator who reviewed her complaint, said he found no problem with the documents he looked at. He conceded, though, that he only reviewed credit card statements, and not the cash advance records.

City Finance Director Ted Abo said that some documents may be missing.

"Sometimes some of the restaurants may not give you a receipt," he said. "I don't know if a receipt was there before (Holguin-Fallon examined the records) or not."

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