Compton Credit Cards Said to Be ‘Piggy Banks’

Several Compton officials used municipal credit cards as their “personal piggy banks” to pay thousands of dollars for private expenses ranging from golf shoes to tooth repair, prosecutors told the Los Angeles County Grand Jury. Some of the officials also used the cards to charge taxpayers a second time for travel expenses that the city had already paid them for, according to newly released court documents.

The officials later repaid some of those charges, but prosecutors told grand jurors that repayments did not eliminate illegality. Prosecutors argued that a robber would remain guilty even if he repaid his victim. They said the officials used their municipal credit cards to obtain what amounted to unsecured loans at taxpayer expense.

The grand jury in February indicted three City Council members, the city manager and former Mayor Omar Bradley on felony charges of misusing public funds. When the indictments were handed up, however, authorities released no specifics.

A 1,350-page grand jury transcript, which became public late last week, provides the first detailed look at evidence behind the allegations.

The officials have all pleaded not guilty, contending through their attorneys that a City Council resolution allowed personal charges on city credit cards. They complained they were being singled out for prosecution for political reasons.

Jane Ngo, an investigative auditor for the district attorney’s office, and Frank Watler, a district attorney’s investigator, told grand jurors that Bradley made illegal credit card charges of at least $6,450 and apparently repaid the city at least $5,600.

Prosecutors said in interviews that city records were not always clear about what repayments by the defendants were for and, in some cases, whether they were promised or actually made.

Bradley’s largest charge was $2,152 for a plane ticket for his wife from Los Angeles to Washington, D.C. The city had already paid $351 for another ticket for her to join him at a Congressional Black Caucus conference, the investigators said. Bradley also charged a stay in a $169-a-night Torrance hotel penthouse. His other questioned credit card charges mainly involved golf and golf accessories, including a pair of shoes.

Investigators also testified that:

* City Councilman Amen Rahh, a Bradley ally, misappropriated $6,668 through double billings and spent an additional $6,100 on personal items. He repaid the city $5,282.

Among the personal items, Rahh rented a car for a month for a friend who told the grand jury that her vehicle had been repossessed. He charged $1,000 of his dues at a downtown Los Angeles private club and airline tickets for his family. He also spent $1,200 on what he and his dentist have said were denture repairs. Rahh, a professor at Compton Community College and Cal State Long Beach, has explained he had a dental emergency while en route to a city business meeting. The office manager for his Inglewood dentist testified, however, that although Rahh used his city credit card to pay for the dental work, the work was actually done on one of his brothers.

* City Manager John D. Johnson II misappropriated $5,979 through double billings and spent at least an additional $9,328 on personal items. He paid $5,000 directly to the credit card company. In addition, during a brief change in administrations when Johnson was put on leave, his temporary replacement ordered more than $16,000 withheld from Johnson’s severance check to cover questionable charges.

Johnson had charged the city $1,186 for a three-year family membership to a 24 Hour Fitness Club in the Inland Empire, where he lives. He had also charged $2,453 for digital camera equipment and $5,362 to take himself and his teenage son’s basketball team, which he coached, to a Florida tournament. Johnson also arranged for another of Rahh’s brothers and the brother’s family to stay at city expense at a hotel after a fire damaged the house they were renting.

* City Councilwoman Delores Zurita, who is Bradley’s aunt, double-billed the city for $4,376 in travel charges, but in some cases quickly repaid the city. She repaid all but $100.

Like the other part-time council members, Zurita received $4,000 per month from the city plus a car or $650 per month car allowance. However, her city credit card bore $1,162 in charges for limousines. Once, she spent $645 to have a limousine take her to a political dinner in Exposition Park. Another time, her daughter, Satra, also a city employee, used her mother’s city credit card for a $517 limousine to take herself and seven children, including her own child, to what she said was a concert at the Universal Amphitheater. A prosecutor said in an interview there was no concert at Universal on that date.

* City Councilwoman Yvonne Arceneaux, a school secretary, charged the city for $1,036 in repairs to her car after she hit a pothole, although a city official advised her that the proper procedure was to file a claim for reimbursement with the city attorney and then seek council approval.

She also charged $150 to have a beehive removed from a neighbor’s home and charged a $130 lobster dinner in Las Vegas.

If convicted, the defendants face up to four years in prison and would be barred from elected office in California. Rahh and Zurita are up for reelection Tuesday.

A City Council resolution authorizing the credit cards in mid-1999 said they were to be used “solely for approved city business-related expenses” and noted that each cardholder would be “held personally liable for any unauthorized charges.”

Defense lawyers have keyed on that wording and are expected to argue that the resolution contemplated unauthorized uses and mandated only that officials make repayments for them.

Johnson’s lawyer, Winston McKesson, said prosecutors have acknowledged that Johnson repaid more than the amount he allegedly misused. “He owes them no money,” he said. “I don’t think they can prove a theft.”

McKesson added that if the defendants should be found guilty of crimes for using a workplace credit card for personal items which they later repaid, “the way we conduct business in America will be changed fundamentally forever.”

Singled Out

Zurita’s attorney, Anthony Willoughby, disputed that his client had double-billed the city for travel expenses, said she always repaid for charges when appropriate, and asserted that the district attorney’s office had unfairly singled out her and some of her colleagues for prosecution.

Willoughby said he has also called to prosecutors’ attention a credit card bill incurred by the current mayor, Eric Perrodin, a Bradley enemy, which shows that Perrodin used his credit card in 2001 to pay for his hotel and a rental car during a city-authorized trip to Washington, D.C. Other records and interviews show that Perrodin had deposited a travel advance check from the city to cover those and other expenses for the trip. Willoughby said this seems to be just the type of “loan” cited by prosecutors as illegal.

Perrodin, who defeated Bradley in a still-contested 2001 election, is employed as a deputy district attorney and has presented himself as a force against corruption. He said Wednesday he had done nothing wrong. He said, and the city controller confirmed, that as soon as he returned from the trip -- his first as mayor -- he wrote a personal check to the city to repay hotel and rental car charges.

One of the prosecutors on the case, Deputy Dist. Atty. Terry Bork, said the office did not look into Perrodin’s credit card use because they were looking into charges in 1999 and 2000, and Perrodin took office in 2001. But even if they had concluded that Perrodin’s card charges were illegal, they probably would not have asked the grand jury to indict him.

“If you see one instance where a person has received a travel advance, has gone on a trip, has used the city credit card and has made an immediate reimbursement, that is likely an instance where you would exercise your prosecutorial discretion not to charge an offense,” Bork said. “What we saw, what made this case so egregious, we saw this conduct over and over again, mostly with no reimbursement.”

Benni Freund, who represents Arceneaux, noted that prosecutors have charged crimes that do not require them to prove that the defendants intended to defraud taxpayers. “There was no intention,” he said.

‘It Wasn’t Hidden’

Albert DeBlanc, representing Rahh, said his client “has not done anything wrong,” but would not respond to questions about the propriety of charging the city for a dentist’s services, saying prosecutors have not yet turned over to him documentary evidence.

Milton Grimes, the attorney for Bradley, said the Compton practice of allowing personal charges as long as they were repaid “was done openly. It wasn’t hidden, and it was accepted.”

Grand jury testimony showed that it was Bradley who pushed for issuance of the cards, despite the concerns of some city officials that they might be abused.

When the first month’s bills arrived, some officials told the grand jury, they spotted trouble, noting that Johnson had charged a tuxedo, which seemed to them to be a personal expense.

Compton’s longtime elected city clerk, Charles Davis, testified that he approached the council during a closed-door session to say, “If you are not careful, somebody is going to go to jail on this.” He said Rahh responded that council members were adults who did not need Davis’ advice on the matter. He recalled that “Councilperson Zurita said, ‘Charles, you are always talking about somebody going to jail.’ ”

After news of questionable charges made their way into what some officials described as anonymously produced local “scandal sheets,” Bradley and Zurita complained. They told Johnson they were upset that their charges were being disclosed, a Johnson aide testified.

Johnson then ordered workers in his office to black out information about what was being charged on the credit card invoices -- which are public records -- before sending them to the controller’s office for payment, aides testified.

Douglas Sanders, the elected city treasurer, testified that he had noticed some credit card holders were charging travel expenses for which they had already received cash advances. He said he reported the problem to the district attorney’s office. Nearly a year later, he said, he penetrated the secrecy that had been imposed in City Hall by arranging with the bank that provided the credit cards to give him statements. He said he provided those too to the district attorney’s office.

Nearly a year after that, in September 2001, the district attorney’s office obtained search warrants to seize records from City Hall and from Bradley’s home.

The deputy district attorneys who presented the case to the grand jury, Kerry White and Terry Bork, said most of the repayments were made after that.