A vested interest in saving Vernon

Halfway through “Chinatown,” the modern noir primer on water and power in Los Angeles, private detective Jake Gittes (Jack Nicholson) is offered some sage advice. A morally challenged rainmaker named Noah Cross — played by John Huston — takes Gittes aside to warn him: “You may think you know what you’re dealing with, but, believe me, you don’t.”

That line could be embossed on a welcome sign to Vernon.

Founded in 1905, the industrial city was baptized in a water skirmish with Los Angeles, which sat upstream along the L.A. River. Vernon’s hog farms and packinghouses relied on the river’s flow, which L.A. had begun diverting in greater amounts for its own use. After a lawsuit went nowhere, Vernon sent work crews to Big Tujunga Canyon with orders to construct an aqueduct to divert water around Los Angeles. The project was stopped by a sheriff’s posse from L.A. before it really got underway, and the episode established a permanently prickly relationship between two towns. After that, the smaller city hall permanently pulled down the blinds, and ever since, politicians and journalists who have tried to peer into Vernon have left scratching their heads.

Last year Vernon came under fire from California Assembly Speaker John A. Pérez (D-Los Angeles), who — in the midst of the state’s worst economic downturn — focused his political sights on disincorporating a town of 112 residents. Why? Government corruption. A councilman and two city workers were found guilty on charges of public corruption. Elections routinely produced allegations of fraud, pensions had been improperly inflated and several city contracts looked dirty. (They were.)

When it came to graft, Vernon had much in common with other notorious Southern California cities. But it was only Vernon, with its $100-million tax base, that Pérez advocated taking over. And it was easy to see why: Vernon must have looked mighty appealing to cash-starved L.A.; the politician who handed it over would have no shortage of friends.

It’s fun to justly take down a city in print — they give out prizes for it. The Los Angeles Times won a well-earned Pulitzer covering the city of Bell’s corruption scandal. Without the paper’s nonstop reportage, Bell might never have been righted, and without Bell, Vernon might not have become as big a story as it did. Never, however, did newspapers like The Times suggest that Bell’s citizens and business owners were content with their crooks, or misguided in their protest. But that’s precisely what they suggested about Vernon’s business owners.

Audacious financial dealings did go on in Vernon. More often than not, however, it was the city’s businesses that were the victims. One city-built shell corporation, Project Labor Group, funneled millions of tax dollars to family members of city workers. Whose money? As with all the misappropriated cash, it had come in the form of taxes and fees from Vernon’s businesses. To suggest they were pleased with the swindle is nuts. Businesses fought to save their city, but no one lifted a protest sign to rescue a corrupt government official.

Vernon is ideal for industry. It has far better roads, permitting processes and tax and energy rates than L.A. can offer. Vernon also enjoys the state’s highest unionization rate, at about 30%. (Just 9% of L.A.’s private sector workers are unionized.) Local officials, however, have never done any favors for Vernon’s companies. Come to town looking for a CEO who will tell you city hall has listened and taken to heart a suggestion — on reform, the budget, the mess that is the Light & Power Department — and you’ll go home very lonely.

Today, Vernon’s City Council is divided. Some members want reform; others would be happy returning to the bad old days. Yet some things have definitely improved, and business has played a prominent role in the reforms. During two city elections for new council members this year, it was Vernon businesses, not city hall, that paid for investigators and lawyers who unearthed voters who were not residents.

Business owners were also involved in the creation of an independent housing commission, pushing the city to expand its housing and voter base. Mostly, business owners think, their city lacks competent leadership. In the past, a crooked city administrator named Bruce Malkenhorst called many of the shots. He’s gone, having pleaded guilty to misappropriation of public funds, and has been replaced by Vernon’s fire chief, Mark Whitworth, who expertly guided the city through its fight with Pérez.

Whitworth, however, lacks the kind of background and experience necessary for his job, and as fire chief, he also has a conflict of interest when it comes to reducing the Fire Department’s outsized budget, which he protects. Where the council once turned to Malkenhorst for guidance, Whitworth now turns to the lawyers of Latham & Watkins, who have guided the city while collecting $22 million in just five years. After completing a 10-month probe of the city, state auditor Elaine Howle concluded that the relationship between Vernon and Latham & Watkins was “highly unusual” and that Vernon needed new leadership with the “ability to understand the complexity of the fiscal situation in the city.”

That’s something local businesses would agree with. They called on the city to make $20 million in cuts at a time when Whitworth instead approved wage increases and delayed layoffs for city workers.

There are 1,800 businesses in Vernon, all of them strongly interested in seeing the town thrive. Fixing a broken city, however, is a long game with extra innings. Nothing happens overnight, as much as newspapers clamor for that. Vernon’s business owners know it will take years and millions of dollars to turn around their city, all of which they’re committed to. But you don’t throw out a city with its crooks.

Dave Gardetta is a political consultant for Baker Commodities in Vernon. Jim Andreoli Jr. is the senior executive vice president at Baker Commodities.