Judge rebukes Bell leaders as he orders Rizzo to stand trial in salary scandal

As Bell’s newly elected council members considered slashing city services and laying off workers, the man accused of stealing millions of dollars from the working-class community — leaving it in financial disarray — was ordered to stand trial.

Former City Administrator Robert Rizzo showed little emotion Thursday as he was reprimanded by Judge Henry J. Hall for leading officials in one of L.A. County’s poorest cities in a “massive ongoing conspiracy to enrich themselves.”

Hall ordered Rizzo, his onetime assistant Angela Spaccia, recently recalled Mayor Oscar Hernandez and former Councilman Luis Artiga to appear in Los Angeles County Superior Court on March 24 to face charges of misappropriation of public funds, making unauthorized loans, conflict of interest and falsification of public records.

He also suggested prosecutors consider filing additional charges against Rizzo and Spaccia for aggravated white-collar crime.

But the judge said several sentencing enhancements that prosecutors were seeking in relation to $1.9 million in loans that Rizzo made to himself and others did not apply. Hall said that because the loans were collateralized, issued with intent to collect repayment and eventually repaid, the “excessive taking” special allegations were dismissed.

Defense attorneys have argued that the loans were given with the knowledge of then-City Atty. Edward Lee, whose testimony was restricted by the city’s assertion of attorney-client privilege.

Prosecutors contend Rizzo was the architect of a scheme to fatten the paychecks and retirement benefits of top employees and spend the city’s money freely by handing out loans to employees, city politicians and a local car dealer. Bell is now struggling financially and incoming council members are likely to make drastic cuts to keep the city afloat.

Calling Rizzo’s salary “obscene,” Hall listed the names of several California cities whose populations are much larger than Bell — where residents number about 40,000 — but whose city managers’ salary and benefits were dwarfed by Rizzo’s near-$1.5-million compensation package.

Hall also rebuked Spaccia for an e-mail exchange with then-incoming Police Chief Randy Adams in which she said “pigs get fat, hogs get slaughtered” as they discussed the high salary being negotiated for Adams.

The judge said Spaccia’s e-mail “reflects a cavalier attitude to the city” and stands as the “smoking gun” of the corruption case.

“I can’t imagine any reason a city official would risk a four-year prison sentence to cover up a compensation and salary that he believes to be legal,” Hall said, referring to witnesses’ testimony that Rizzo attempted to hide his salary from the public.

The judge noted that all the defendants drew their salaries from multiple “sham” commissions and agencies that were created to “hide plainly illegal payments.”

Hernandez, Artiga and four other former council members were ordered last month to stand trial for drawing salaries from the agencies and commissions, which rarely met.

Hall said that in the current case, Artiga and Hernandez had a responsibility as council members to oversee compensation, including loans. Rizzo, therefore, should never have been allowed to lend city funds without council approval.

Artiga used one of his $20,000 loans to adopt a 2-year-old girl from Tijuana, and Hernandez received $20,000 to buy new equipment for his market. Spaccia, who received more than $300,000 in loans, said she used some of the money to buy a house. Rizzo replenished his own $80,000 loan several times.

Outside the courtroom, defense attorneys said they had little expectation the court would dismiss the charges, but felt that some of the judge’s discourse — which lasted more than an hour — was unnecessary.

“I’m concerned some of the statements will taint the jury pool,” said Gregory J. Patterson, who represents Spaccia. “You’ll be hard-pressed to find folks who haven’t heard about Judge Hall thinking there’s some vast conspiracy.”

Rizzo’s attorney, James Spertus, said that just as he did at the beginning of this hearing, he plans to ask the judge to recuse himself for the next preliminary hearing scheduled to begin Tuesday. Rizzo will be the sole defendant and is accused of conflict of interest over his dealings with Dennis Tarango, who served as Bell’s privately contracted planning director. The two once owned racehorses together. The city has paid Tarango’s firms $10.4 million since 1995, according to the state controller’s office.

Deputy Dist. Atty. Sean Hassett said he was pleased with the judge’s ruling, which bolstered his argument that Bell’s charter did not empower Rizzo to hand out the city’s money. “It’s not a license to steal; it’s not carte blanche to use the money as your own,” Hassett said.

The prosecutor said additional charges may be filed.

corina.knoll@latimes.com