Guilty Plea Expected in Alatorre Case

Former Los Angeles City Councilman Richard Alatorre has agreed to plead guilty to felony tax evasion in connection with a four-year federal corruption probe, the largest in recent City Hall history.

Alatorre, now an appointed state official, will serve an eight-month home detention, as well as pay taxes, interest and penalties on $40,000 in undeclared income for 1996.

The plea bargain is expected to be presented to a federal judge in the next several days, sources familiar with the agreement said. On Monday, these sources declined to say where Alatorre had obtained the cash at the center of the charge.

Alatorre had mixed emotions about the deal, said a source close to the former councilman.

“I think he did it to spare himself and his family the trial and tribulation of an indictment and trial.”

The deal closes a troubled chapter in the rise and rapid fall of Alatorre, 57, a onetime Eastside student activist and Assembly member who became one of California’s most influential political power brokers. Alatorre could not be reached Monday, and his attorney declined to comment.

Though insisting that he could have won reelection, Alatorre opted not to seek a new term in 1999. He had represented the district stretching from Boyle Heights to Eagle Rock for 14 years.

When Alatorre stepped down, he was not only coping with the federal grand jury investigation, but also had tested positive for cocaine during a bitter guardianship case involving his niece.

It’s unclear whether the plea agreement will affect Alatorre’s $114,000-a-year job as a member of the state Unemployment Insurance Appeals Board. He was appointed by his former legislative colleague state Sen. Pro Tem John Burton (D-San Francisco).

Generally, a felony conviction disqualifies state officials from holding office, but the particulars of any such case have to be reviewed, officials said.

The federal investigation, which involved the FBI, the Internal Revenue Service, the Metropolitan Transportation Authority inspector general’s office and the U.S. attorney, gained momentum in late 1997 after The Times documented a series of questionable transactions involving Alatorre’s personal finances and political maneuvers.

Among those were allegations of loan fraud and that a prominent Eastside developer financed thousands of dollars in undisclosed improvements on Alatorre’s home.

Investigators also examined claims that the councilman repeatedly showed up at City Hall with wads of cash after meetings with city contractors.

Authorities summoned many of Alatorre’s associates before the grand jury and subpoenaed records from dozens of banks, businesses and other locations, including City Hall. The plea agreement ends the case against Alatorre, but it was unclear whether investigations of others are continuing.

The amount of back taxes, penalties and fines that Alatorre faces still have to be worked out with the IRS.

Details of the home confinement also must be finalized. Typically, the terms include electronic monitoring and restrictions on travel other than to and from work.

The guilty plea focuses on the 1996 tax year, when Alatorre pulled together tens of thousands of dollars in last-minute cash from relatives to close escrow on his new hillside home in Eagle Rock.

In exchange, federal authorities agreed not to seek jail time for Alatorre or prosecute his wife, Angie, according to one source familiar with the negotiations. His wife’s name is on the couple’s joint tax returns, making her potentially vulnerable. Under federal sentencing guidelines, Alatorre could have been ordered to serve more than a year in prison.

Given the resources devoted to the probe, critics will ask whether the plea on a single tax evasion count was worth it. But sources familiar with the investigation stressed that it’s difficult to get solid evidence of the sort of quid pro quo necessary to win a bribery or corruption conviction. As one said: “They are very difficult cases to prove.”

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Times staff writer Greg Krikorian contributed to this story.