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Broke California’s Bell City raised taxes and used money for official raises

September 24, 2010

Chaing- The city of Bell nearly doubled taxes for sewer, trash, recycling and lighting districts in 2007 without voter approval, then used more than $1 million of those funds to pay for raises to former City Administrator Robert Rizzo and former Assistant City Administrator Angela Spaccia, according an audit released Wednesday morning by state Controller John Chiang.

The finding is one of numerous problems highlighted by Chiang in a sweeping report that sharply criticizes Rizzo and other city leaders for creating an environment with an “extremely high” potential for waste, fraud, abuse and misappropriation of funds. In addition, all requests by Rizzo were approved by the City Council with “little or no question or deliberation,” according to the audit.

Chiang also found that the city approved an exorbitant salary for Rizzo without any performance reviews, used more than $93,000 to repay Rizzo’s personal loans and issued $50 million in general obligation bonds with no documented plan or “apparent need for the funds.”

“We found the city of Bell’s administrative and internal accounting control system to be, in effect, non-existent as all financial activities and transactions evolved around one individual -– the former Chief Administrative Officer -– who apparently had complete control and discretion over how city funds were used,” the audit stated.

The audit also notes more than $10.4 million in payments made to a private contractor,

Dennis Tarango, who served as the city’s planning director. Tarango was also Rizzo’s business partner in a horse-racing venture.

“This is even more proof that the guy [Rizzo] was manipulating the city,” said Bell’s interim administrator, Pedro Carrillo. “And we look forward to continuing to work with the controller to make sure that there aren’t other irregularities. We have a lot of work ahead of us correcting the mistakes that have been made in the past.”

Chiang’s office audited the city at Carrillo’s request. Since it began looking at Bell’s Books, Chiang’s office has discovered more than $5.6 million in illegal taxes that should be refunded to residents and businesses.

— Jeff Gottlieb and Ruben Vives

http://www.latimesblogs.latimes.com

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