Mayor Accused of Giving Relative Sweet Tow Deal

For years, Raul Varela was just another Lynwood tow truck driver circling the streets for sputtering cars. He owned three trucks, parked them outside his house and dispatched drivers from a room behind his garage.

Today, Raul’s Towing Service boasts a 3,000-square-foot facility remodeled with city funds. Varela bills Lynwood as much as $500 for each towed car. And soon he may get to store the cars at a city yard.Varela’s tow truck operation began hooking deals after Fernando Pedroza, his son-in-law, was elected in November 2001 to the City Council of this working-class city in southeast Los Angeles County. Pedroza, with his two then-allies on the council, gave Varela the exclusive rights to remove abandoned vehicles in the city, placing Pedroza’s father-in-law in the driver’s seat in the local tow truck wars. Previously, the city had not paid for such services.

The move was stunning, some say, even by Lynwood standards. In 2001, former Councilman Paul Richards, who was recalled in September, voted for a $1-million consulting contract for his sister. And council members have used their city-issued credit cards for expensive dinners, trips to beach resorts and other questionable purchases, triggering an investigation by the Los Angeles County district attorney’s office.

Pedroza, during his campaign, promised to do away with family deal-making, vowing on videotape never to approve a contract benefiting his relatives.

The videotape is being used in a recall effort by some former Pedroza supporters who say the onetime plastics salesman betrayed them.

Pedroza, who became mayor in 2002, said he has not broken his promise. Legally speaking, his father-in-law is not a family member, he said. Conflict-of-interest laws prevent him from voting only on contracts for his wife or children, Pedroza said in an interview at his City Hall office.

“I have kept my promise. I said no sweetheart deals. I haven’t had a family member receive a sweetheart deal,” he said.

Varela did not return phone calls seeking comment.

Former supporters said they had thought Pedroza would clean up city government but now believe that he is practicing the same kind of nepotism that he criticized Richards for. Fathers-in-law, they said, are an integral part of a family, especially among Latinos. Pedroza didn’t break the law, but he broke his promise, they maintained.

“He knows his father-in-law is family,” said Joaquin Mesinas, a UPS driver and one of many Lynwood residents with roots in the Mexican state of Oaxaca. “I’m really disappointed in the guy. It just shows you what kind of a person Fernando is.”

Mesinas and other former Pedroza supporters said the mayor is heavily influenced by Varela, who they said often accompanies the son-in-law to meetings with other politicians and community leaders.

Before his tow truck business became a success, Varela was better known as the president of United Families of Lynwood, a nonprofit organization providing various community services, including beautification projects, the distribution of low-flow toilets and yard work for senior citizens. Pedroza, who helps run the organization, drew much of his early political support from members.

But some former volunteers said they now believe that United Families was merely a vehicle for Pedroza’s rise to political power, with Varela acting as orchestrator and beneficiary. They say the organization was used to raise Pedroza’s profile and to cast him as a man of the community.

When Varela’s son-in-law became mayor, “look how good” Varela’s life became, said Miguel Figueroa, a former volunteer for United Families.

Pedroza denied that his father-in-law influences his affairs or that the nonprofit was a platform for the future mayor’s political ambitions.

The organization, he said, has at least 20 volunteers and continues to provide services. “United Families helps seniors wholeheartedly,” Pedroza said. “It does not get involved in politics. It involves people who want to donate their time to help seniors in need.”

Varela first made a move for city business in 2001. He was still operating his tow truck company out of his house, with an eye toward expanding to a city-owned site on Wright Road, backing up to the Long Beach Freeway.

Varela’s was not the only business that wanted the property. A construction company had offered $131,000 in a proposal that would not have cost the city any money, according to city documents. The firm, W.A. Rasic Construction, offered to buy the site, which included a run-down industrial building, as is.

Pedroza and his then-allies on the council -- Arturo Reyes and Ramon Rodriguez -- instead let Varela purchase the property for $195,000, giving him a $125,000, 3% city loan. The council also gave Varela a no-interest $70,000 loan to improve the building, according to documents. Varela does not have to repay the construction loan if he remains in business for five years.

During the meeting at which the deal was discussed, Pedroza said his vote would not constitute a conflict of interest because Varela was not a “blood” relative.

Nine months after approving the land deal, Pedroza and his council allies made Varela the city’s exclusive tow service provider.

Until then, such cars had been disposed of by five other Lynwood tow operators whom the city did not have to pay. Varela, who pays Lynwood a franchise fee -- 20% of the amount he bills the city -- has netted $56,000 under the arrangement.

Tow truck industry experts said the setup is unusual, because tow truck companies usually get stuck with the cost of towing and disposing of abandoned vehicles. Rick Bays, president of the California Tow Truck Assn., said no other municipality that he is aware of pays a company to tow such cars. Usually the task is a condition of the permit for operating in the city.

“In 33 years, I’ve never heard of anyone with that kind of a sweetheart deal,” said Bays of the Lynwood situation.

Pedroza has backed another measure that could help his father-in-law. Last month, he voted to expand the city’s corporate yard, which will have room for a 66-vehicle tow yard.

City officials have not said whether Raul’s Towing will use the site, and the expansion may now be shelved because a power shift on the five-member council has left Pedroza without a majority.

But critics say Pedroza still wants his father-in-law to have access to the site.

At a recent meeting, when Councilman Reyes tried to ask city officials if Raul’s Towing would be using the new yard, Pedroza cut Reyes off, telling him he was “blabbering.” Reyes and Rodriguez are no longer allies of Pedroza.

The mayor denied that the city would accommodate his father in-law’s business. He said confiscated vehicles, not abandoned ones, would be stored at the tow yard.

His critics don’t believe him and are gathering signatures to launch the recall drive. “He was supposed to be against corruption and nepotism, and he’s doing the same thing -- even worse,” said Eddy Hernandez, a construction worker and a leader of the recall effort.