D.A. Raids Telemarketer in South Gate

Times Staff Writer

Just days after dispersing subpoenas to 25 South Gate employees and contractors, the district attorney's office struck again Tuesday, raiding a company working on an unusual telemarketing campaign sponsored by the city.

As telemarketers arrived at 8 a.m., two dozen investigators descended on the city-owned building leased by Hector Castillo, the firm's owner. The telemarketing campaign criticizes the local police union, a longtime opponent of the city's leaders.

The investigators also searched Castillo's home in Los Angeles. Numerous items, including several computers, were seized.

Officials, who interviewed several employees after securing the building, would not comment on the investigation. The search warrant affidavit is under seal.

Residents have raised questions about the legality of the telemarketing campaign, saying that it is being used as a political boiler-room operation by Treasurer Albert Robles, the city's most powerful political figure.

"It's a campaign war room and they're using city funds for unlawful purposes," said Al Lopez, president of the police officers' union, which backs a voter recall effort to remove Robles.

Castillo's attorney, Mark J. Werksman, denied the accusations. "This is part of an ongoing effort to bring down, one way or another, Albert Robles. They're going to keep raiding and bringing cases until they run out of steam, or until we stop them," Werksman said.

The raids came a day after South Gate officials announced that staff members of most major city departments have been ordered to appear before the Los Angeles County Grand Jury, starting today.

Prosecutors do not comment on grand jury proceedings, and the nature of the investigation is unclear. Sources said the grand jury investigation involves matters separate from Tuesday's raids.

The latest actions by the public integrity unit appear to be larger in scope than other investigations underway in the working-class city. And they come three weeks before the recall election targeting Robles and three City Council allies.

The raids focused on the activities of Castillo's firm, The C Group. Last month, the company was awarded a $98,000 contract by the council to start a telephone campaign asking residents if they have ever given charitable donations to the police officers' union.

City officials say the campaign benefits residents because the union is not a qualified nonprofit group, having had its corporate powers revoked by the state's Franchise Tax Board in 1983. Residents are told by the telemarketers, most of them Spanish-speakers, that the union may have improperly solicited contributions.

But union officials deny any wrongdoing, saying that they are a properly registered organization with a federal tax identification number.

The timing of the phone campaign, they say, makes it clear that the city is trying to smear the union.

Union officials have also questioned Castillo's selection as a contractor.

Castillo, who also owns an engineering company, was at the center of a controversy last summer when officials from the Metropolitan Transportation Authority canceled a contract for his engineering firm.

They acted after the agency's inspector general launched a conflict-of-interest investigation involving Castillo's engineering company, H.C. and Associates. The status of that investigation is unknown.

After Castillo's dismissal from the MTA, South Gate officials continued giving his engineering firm lucrative contracts. Castillo then formed the C Group to handle the telemarketing operation.

The district attorney's actions probably won't significantly affect the telephone campaign.

Though the computers may not be returned for a few weeks, a 36-line telephone bank remains in place.

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