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As Bell corruption trial nears, city faces uncertain future

Former Bell City Manager Robert Rizzo became the face of a salary scandal in 2010 that sent the city to the edge of insolvency. Above, Rizzo appears in court during an arraignment hearing that year.
(Al Seib, Los Angeles Times)

When Doug Willmore became Bell’s city manager last June, one of his first questions was about the padded black chair behind his desk. Had it been occupied by the man he was replacing, Robert Rizzo?

No. To his relief, that one had been chucked.

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“I’d sit on a folding chair instead of his chair, or a stool,” Willmore said.

FULL COVERAGE: Bell corruption trial

In the seat of power for 17 years, Rizzo became the face of a salary scandal in 2010 that sent the city to the edge of insolvency. Bell, just 2½ square miles in southeast Los Angeles County, became the butt of jokes everywhere and a rallying cry for reformers.

Now, six former Bell council members are facing trial in Los Angeles County Superior Court on corruption charges related to their lavish compensation during Rizzo’s reign as city administrator. The council members made $100,000, mostly for sitting on boards that rarely, if ever, met.

The trial is expected to bring new attention to a scandal that former Dist. Atty. Steve Cooley famously described as “corruption on steroids.” But there has been significantly less focus on the small city’s slow recovery from the scandal.

“Everybody suspected that the city of Bell would go under immediately, but we haven’t two years later,” said Ana Maria Quintana, a councilwoman who won office in the wake of the revelations.

The city’s general fund has been slashed to $12 million from $16 million, largely because a handful of highly paid employees are now gone, and the budget is balanced. Council meetings are streamed online in a city where the workings of government were once opaque. The city has cut fees for trash pickup, building permits and business licenses that had ballooned under Rizzo.

But it is too soon to tell how well the city will ultimately emerge from the scandal. It faces a tangle of scandal-related lawsuits, with $1.5 million in legal fees a year, and the possibility of fiscal calamity.

“If all the litigation stuff were solved today, I’d tell you Bell has a bright future, and we can pay our bills,” said Willmore, who estimates he spends a third of his time on lawsuits. “There are all these things that could happen that could bankrupt the city.”

Among the worries, he said, is that Bell will be made to pay the legal fees of the former city leaders, who claim the city should foot the bill because their alleged misdeeds occurred as part of their official duties.

“That’s probably $5 million easily,” Willmore said.

Rizzo and the other officials have pleaded not guilty and deny any wrongdoing. James Spertus, Rizzo’s attorney, described his client as “a good administrator who turned the city around,” and attributed its financial woes to a bad economy. He said the city has refused to negotiate on Rizzo’s legal fees.

“The public outrage creates a political environment where they can’t compromise [on] anything, and that’s economic disaster,” Spertus said. “The city should be trying to conserve resources, heal and move forward.”

Willmore said that when he arrived, the city hadn’t reconciled a bank statement in two years. “Under Rizzo, the lack of accounting was just staggering,” he said. “I’ve inherited scandals before, but certainly nothing like this.” He said the city’s handbook of ethics policies — which new employees are given — still bore Rizzo’s name when he took office. He quickly changed that.

The city is also posting its audits online. The most recent, for the fiscal year that ended in June 2010, found widespread flaws in the city’s financial bookkeeping under Rizzo, with shoddy documentation and a lack of clear policies regarding license fees and loans to employees.

Bell still has the second-highest property tax in Los Angeles County, after only Beverly Hills, and a 10% utility tax, about twice that of most cities.

In contrast to Rizzo, who made a salary of $800,000, Willmore earns $175,000 for the same job — now making him the city’s highest-paid employee.

Drive the city’s main streets — Gage, Florence and Atlantic avenues — and the sight of boarded-up storefronts is a common one. Willmore attributes that in part to the way Rizzo allegedly squeezed local businesses for fees. For years, the Chamber of Commerce was perceived as a bloc of Rizzo stooges and received $7,000-a-month payments from the city — a practice Willmore said he hasn’t seen elsewhere. The new City Council has stopped the payments.

Jose Vazquez, a tire shop owner and head of the Bell Business Assn. — formed because the Chamber of Commerce was so distrusted — said the atmosphere for businesspeople is “100% better” than it was.

Vazquez said a new restaurant was recently able to obtain a license just two days after an inspection from the county health department — a process that could have taken three months in the Rizzo era, he said. “The people who run the city are more friendly,” Vazquez said.

For Bell Police Chief Anthony Miranda, a 22-year veteran of the department, changes are clear every time he walks into City Hall. For years as a captain, he said, he dreaded a summons there because he never knew what to expect from Rizzo.

“Mentally, physically, I’m gearing myself up for a fight. Is he gonna get in my face? " Miranda recalled. “That’s the kind of anxiety I experienced when I got called to City Hall. I knew it wasn’t gonna be positive.”

Often, he said, Rizzo would insist that police impound cars more aggressively because it was a reliable revenue source. It was a practice for which the city became infamous.

After the scandal broke, some angry residents called for the wholesale sacking of all city and police employees, so deep was the distrust. It did not help that Rizzo’s last police chief, Randy Adams, made $457,000 a year.

Miranda remembers attending officer training in Los Angeles and being subject to ridicule — even by other officers.

“You could hear people mumbling when they saw you walk into the room with a Bell patch. You knew they were talking about you,” he said. “The joke was, ‘Hey, Miranda’s gonna buy us lunch because he’s making $400,000 for sure.’ It was not funny. It was tough times.”

Over the last two years, he said, police impounds are down by half or more. He said the city has seen a steady reduction in crime, and his officers have been trained in community-oriented policing. And City Hall? “Things are just a lot lighter now,” he said.

The Bell scandal has reverberated across the state, inspiring a host of new laws. The state laws require local governments to rotate their auditors every six years, and require agency agendas to be put online.

The laws also limit the automatic renewal of a city leader’s contract when it is linked to a salary hike — the mechanism by which Rizzo’s salary ballooned — and require that when a board meets, the public be informed of the compensation the members receive.

“I think it’s a huge step forward in addressing the issues that were raised by the practices in Bell,” Natasha Karl, a legislative representative for the League of California Cities, said of the laws.

State Controller John Chiang, meanwhile, launched a website — Publicpay.ca.gov — that lists the compensation of more than 1.5 million employees of the state, counties, local government and special districts.

Ironically, Bell failed to meet the controller’s October deadline to file its 2011 salaries. As of Wednesday morning, the controller’s office was describing Bell as one of only five California cities that had not complied.

Willmore said the city sent in its salaries in December, but to an outdated email address. He said the situation has been fixed.

Now facing trial are former council members George Cole, George Mirabal, Oscar Hernandez, Luis Artiga, Victor Bello and Teresa Jacobo. Rizzo and his former assistant, Angela Spaccia, will face trial on corruption charges later this year.

But it probably will be years before all the legal battles are resolved. Federal investigators are looking into Bell’s sale of millions of dollars of bond issues, which may result in a fine. And the city is being sued for $35 million by Dexia Credit Local, an arm of a European bank, for defaulting on a bond issue originating under Rizzo.

The city, for its part, is suing the law firm it hired to oversee the Dexia bond issue on the grounds that it failed to note the deal flouted the state Constitution. The city is also suing another law firm it once hired for alleged malpractice related to the Dexia bond.

Nestor Valencia, who won a place on the City Council in the wake of the scandal, said he plans to attend the “Bell 8" court proceedings. “Front row, center,” he said. “The [Rizzo] era is not over until justice is served.”

A jury was impaneled Wednesday and opening statements are expected to begin Thursday.

christopher.goffard@latimes.com

Times staff writers Corina Knoll and Ruben Vives contributed to this report.


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