September 23, 2010 / 1:21 AM / 7 years ago

Mayor, officials arrested in California pay scandal

<p>Former Bell City Manager Robert Rizzo attends a bail reduction hearing in Los Angeles County Superior Court, in Los Angeles, September 22, 2010. REUTERS/Al Seib/Pool</p>

LOS ANGELES (Reuters) - The mayor, former city manager and most of the city council in a Los Angeles suburb were arrested on Tuesday and charged with misappropriating $5.5 million in public funds in what a prosecutor said amounted to treating the city’s coffers like “their own piggy bank.”

Eight current and former Bell officials were arrested, including former City Manager Robert Rizzo, 56, whose nearly $800,000 salary ignited a furor over public pay and pensions across California.

Rizzo who was cast by law enforcement as the “unofficial czar” of a city government gone bad.

The salary revelations by a newspaper in July sparked investigations up and down the state, and have made government accountability into an issue in the governor’s race for financially foundering California.

Bell Mayor Oscar Hernandez, City Council members George Mirabal, Teresa Jacobo and Luis Artiga, former City Council members George Cole and Victor Bello and former Assistant City Manager Angela Spaccia all were arrested.

The charged City Council members were being paid nearly $100,000 a year for their part-time jobs overseeing the affairs of the blue-collar city with a population of roughly 40,000.

Hernandez, 63, was taken into custody after police used a battering ram to knock down the front door of his home.

“We’re alleging they used the tax dollars collected from the hard-working citizens of Bell as their own piggy bank, which they then looted at will,” Los Angeles County District Attorney Steve Cooley told reporters.

Following the announcement, the Los Angeles County Board of Supervisors asked state Attorney General Jerry Brown to appoint a receiver to take over the day-to-day management of Bell.

<p>Bell Mayor Oscar Hernandez (R) and former Bell city council member Victor Bello listen during their bail reduction hearing in Los Angeles September 22, 2010. REUTERS/Al Seib/Pool</p>

“CALCULATED GREED”

Rizzo was charged with 53 counts of misappropriation of public funds and conflict of interest, allegedly bilking the city out of about $4.3 million.

“Rizzo, acting as the un-elected and unaccountable czar of the city of Bell, secretly set his own salary and misappropriated substantial pay and benefits by increasing each of them through a series of actions that no one approved of and few, if anyone, knew about,” Cooley said.

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“This was calculated greed and theft accomplished by deceit and secrecy.”

In addition to his inflated salary and pension, which would have paid him millions of dollars over the course of his lifetime, prosecutors accuse Rizzo of giving nearly $1.9 million in unauthorized loans to himself, Spaccia, Artiga, Hernandez and dozens of others.

Fitch Ratings on Monday downgraded and then withdrew its ratings on $57.5 million in outstanding bonds issued to Bell.

The current and former city council members were charged with nearly two dozen counts of misappropriating about $1.2 million. Cooley said they collected salaries for meetings that never occurred.

Rizzo’s defense attorney, James Spertus, could not immediately be reached for comment on the charges against his client. A spokeswoman for the city of Bell was also not available to comment.

Of the current five-member City Council, only Councilman Lorenzo Velez was not arrested or charged in the case.

Brown, a Democrat who is running against Republican Meg Whitman for governor, last week sued the eight officials for fraud, waste of public funds, negligence, conflict of interest, breach of fiduciary duty and violation of public trust.

Editing by Dan Grebler

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