8 accused of looting small CA city headed to court

[October 21, 2010]  LOS ANGELES (AP) -- Eight current and former officials accused of looting millions of dollars from the blue-collar Los Angeles suburb of Bell are headed to court to face charges of misappropriation of public funds.

The eight, who were arrested last month, were scheduled to be arraigned Thursday morning in Los Angeles Superior Court.

They include ousted City Manager Robert Rizzo, who was paid an annual salary and compensation package of $1.5 million to run a city of about 40,000 residents where one in six people live in poverty.

Four City Council members who were paying themselves nearly $100,000 a year are also among those charged.

The scandal has provoked nationwide outrage and led to numerous investigations.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

LOS ANGELES (AP) -- Eight current and former officials accused of looting millions of dollars from the small California community of Bell are headed to court, a day after the state Controller's Office accused the city of illegally diverting more than $1 million, partly to pay officials' inflated salaries.

The mayor, vice mayor, former city manager, former assistant city manager and other officials were expected to enter pleas Thursday to multiple counts of misappropriation of public funds.

Prosecutors say they looted more than $5.5 million from a city where one in six people live in poverty. The scandal has provoked national outrage and calls for more transparency in government.

When the eight were arrested last month prosecutors said ousted City Manager Robert Rizzo was at the center of a scam that went unchecked for years while he allegedly lent city money to himself, his assistant, City Council members, members of the police force and an array of others. The scheme endured as long as it did, prosecutors said, because anyone who could have blown the whistle was in on it.

Authorities have said Rizzo made $4.3 million by paying himself through different employment contracts that were not approved by the City Council. Meanwhile, council members allegedly paid themselves a combined $1.25 million for what prosecutors have said were "phantom meetings" of various city boards and agencies.

Rizzo, who was fired after the Los Angeles Times reported in July that he was paid nearly $800,000 a year, has repeatedly denied any wrongdoing through his attorney, James Spertus.

When numerous perks like vacation, insurance and other benefits were added to his $787,637 salary, Rizzo's total annual compensation package was about $1.5 million.

Four of the City Council's five members, who also face charges, were each making nearly $100,000 a year until the scandal broke. Three of them, Mayor Oscar Hernandez, Vice Mayor Teresa Jacobo and Councilman George Mirabal are the target of a recall effort. The fourth, Councilman Luis Artiga, has resigned.

Also facing charges are former council members George Cole and Victor Bello and former Assistant City Manager Angela Spaccia.

All are free on bail except for Mirabal, who remains jailed in lieu of $260,000 bail, and Bello, who is in jail in lieu of $190,000 bail.

If convicted of all charges their maximum prison terms could range from 10 years for Spaccia to 58 years for Rizzo.

Since the scandal broke, several government agencies have launched investigations.

State Controller John Chiang released an audit Wednesday that concluded Bell officials took at least $1.2 million intended for affordable housing and street repairs and used it to pay themselves huge salaries and generous perks, as well as to cover other city expenses for which the money was not intended.

Last month, Chiang reported that Bell officials mismanaged more than $50 million in bond money and levied millions of dollars in illegal taxes.

The district attorney's office is also looking into allegations of voter fraud in Bell and the Department of Justice is investigating whether Bell officials had police target young Hispanic drivers for traffic stops as part of a scheme to boost the public treasury through towing and impound fees.

[Associated Press; By JOHN ROGERS]

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