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Public funds used to repay personal loans in scandal-torn Bell City

09-21-2010 14:09 BJT

LOS ANGELES, Sept. 20 (Xinhua) -- Public funds were used to repay personal loans, apparently without authorization in Bell City where a salary scandal has drew national attention, according to a state audit published on Monday.

The city of about 38,000 residents in suburban Los Angeles paid out nearly 95,000 dollars to repay personal loans former City Manager Robert Rizzo gave himself without the apparent knowledge of city council members, said the audit appearing on the website of the Los Angeles Times.

The audit by Controller John Chiang indicated that the city funds were put into Rizzo's retirement accounts to repay loans in 2008 and 2009, the paper said.

"We found the city's system of internal control to be nonexistent, as all financial activities and transactions revolved around one individual, the former chief administrative officer, who had complete control and discretion over how city funds were used," the audit said.

Councilman Luis Artiga, who took a 20,000-dollar loan but is cooperating with an investigation by Attorney General Jerry Brown, told The Times Rizzo's "intentions were to milk and exploit this community to take advantage of the innocence of this community."

City officials told The Times last month that Rizzo received two loans for 80,000 dollars each, while documents reviewed by the newspaper showed that former assistant city manager Angela Spaccia received two loans of at least 100,000 each and Artiga and Councilman Oscar Hernandez and Artiga received 20,000 loans.

Bell City found itself in the national spotlight when the Los Angeles Times reported last month that some top city officials were making exorbitant salaries. City Manager Robert Rizzo was being paid an annual salary of 787,637; Police Chief Randy Adams, 457,000; and Assistant City Manager Angela Spaccia, 376,000.

Additionally, Mayor Oscar Hernandez and three of the city's four council members -- Artiga, Teresa Jacobo and George Mirabal -- were being paid 97,000 for their part-time jobs.

It's also been reported that the disgraced officials are eligible for huge pensions; that some had taken out questionable loans from the city; that residents' property tax rates were unlawfully high; and that the city also overcharged them for sewer service.

Rizzo, Adams and Spaccia have since resigned. The mayor and council members agreed to reduce their salaries, but refused to heed their outraged constituents' calls to step down.

Last week, California's Attorney General's Office filed a lawsuit against the Bell officials, accusing them of fraud, civil conspiracy and waste of public funds.

The lawsuit calls for the recovery of unwarranted salaries amounting to hundreds of thousands of dollars and the reduction of pension benefits for the officials.

The Bell officials, whose salaries were the highest in the nation among public employees, deliberately "abused their public trust," Attorney General Brown said.

Editor:Jin Lin |Source: Xinhua

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