Probes Focus on Officials in Compton

Federal prosecutors are investigating a series of transactions between longtime Lynwood City Councilman Paul Richards and the neighboring city of Compton, including a deal that Compton officials gave Richards to develop city-owned land, a grand jury subpoena shows.

The district attorney’s office, meanwhile, is serving its own grand jury subpoenas on Compton officials for a separate investigation into possible misuse of public funds. Sources say the district attorney is looking into how city credit cards were used by council members and top administrators.

Deputy Dist. Atty. David Demerjian, who heads the district attorney’s public integrity unit, declined Wednesday to identify targets of the investigation.

City records for one council member, Amen Rahh, show that he charged $1,200 worth of what he described as emergency dental work on a credit card issued for city business. The district attorney’s office subpoenaed Rahh’s dental records months ago.

Rahh said he repaid the city for that expense.

Other credit card records show former council members making a variety of charges, ranging from $676 at a luggage store to $27 at a movie theater.

Both sets of grand jury subpoenas call for testimony late next week.

In the federal investigation, a grand jury subpoena issued Tuesday demands that city officials produce documents related to any payments by Compton to Richards since he left its employ years ago as an assistant city manager and labor negotiator; any documents regarding a $350,000 settlement of a civil rights and breach-of-contract lawsuit he filed against the city over its decision not to renew his labor negotiation contract; any documents relating to his efforts to develop land in Compton; and any documents relevant to another, pending lawsuit he filed against the city involving his proposed development, which has been stalled by political opponents.

Assistant U.S. Atty. Daniel Shallman, who is running the federal investigation, declined to comment on it Wednesday.

The Times reported last summer that Compton had agreed to sell some of its best city-owned land to Richards, who has no experience as a developer, for millions of dollars less than it is worth. Under terms of the deal, Richards would not put up any of his own money. Instead, the city would loan him $1.6 million to cover the price of the land and nearly half a million dollars in planning costs. He would have to repay the loans -- without interest -- only when he sold the 231 houses he planned to build.

Richards is an important member of a network of allies who have held political posts and other public-sector jobs in Lynwood and Compton. He, like Rahh, is a supporter of former Compton Mayor Omar Bradley.

Richards on Wednesday defended the land deal as “a solid deal for the city, probably one of the best redevelopment deals they’ve had.” He added: “I look forward to scrutiny.”

Although the Compton City Council twice approved a loan of about half a million dollars for Richards’ predevelopment costs, the city attorney has held up the check, saying he is worried that the city might not be repaid. The city’s failure to issue the check prompted Richards to file a breach-of-contract lawsuit against Compton.

Last week, Rahh and two other members of the City Council who say Richards should get the check voted to hire an independent lawyer to represent their point of view against that of the city attorney.

Richards has aspired to become a housing developer at least since 1999, when he proposed in writing that Compton allow him to develop housing at four locations in the city as part of an effort to settle his earlier lawsuit. Compton officials declined to renew his $68,500-a-year contract in 1997 amid union complaints that Richards was often unavailable.

Bradley and his allies suggested paying Richards nearly $1.4 million to settle the suit, according to the city’s outside trial counsel, Nelson Atkins. That plan was abandoned after Atkins wrote a letter to the City Council saying that a settlement that large would constitute an improper gift of public funds. The suit was settled for $350,000, officials said.

Richards said Wednesday that about half of that settlement reflected a judge’s decision in favor of Richards on the breach-of-contract portion of his lawsuit. He accused the Compton city attorney’s office of holding up his current land deal without any cause.