Jim Porter: City of Bell loots the city’s coffers
May 30, 2013
Power corrupts and absolute power corrupts absolutely. You have read stories about how the City of Bell's five council members and top officials paid themselves extravagant salaries. But, you have to read People v. Rizzo, et al. to fully comprehend their larceny.
Here's the lead paragraph in the Court of Appeal Opinion, "When it appears that a charter city is under the control of individuals who are looting the city's coffers for their own benefit, can the Attorney General, on behalf of the city, bring an action against the allegedly corrupt individuals, to remove the city from their control and require them to pay restitution to the city?"
Robert Rizzo was the Chief Administrative Officer of the City of Bell from 1993 through July 2010. He paid himself $787,500 in base salary. He gave himself 12 percent annual salary increases.
He received double the normal Public Employees Retirement System credits and had 107 vacation days and 36 days of sick leave per year. As if that's not enough, Rizzo sold back more than 130 days of leave time for over $360,000, bringing his total salary in one year to $1.1 million.
Rizzo paid his assistant a base salary of $336,000 with 20 percent raises, automatic 12 percent increases and 143 days of vacation and sick leave per year. The assistant sold back leave time for another $175,000. She did all right by Rizzo.
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The five council members each received $8,000 per month salary notwithstanding that for a city of 38,250 residents, each could not receive more than $400 per month under California law.
Rizzo hired the Police Chief at a base salary of $457,000, and gave him lifetime health insurance benefits for his dependents, and supported the Chief's claim for medical disability retirement upon his retirement from the City of Bell, in essence acknowledging he was already disabled.
The City passed some misleading ordinances which appeared to limit their compensation, yet the ordinance actually doubled their compensation.
The council members put out a false memorandum stating they were paid $673 a month when they were actually paid $7,600 a month.
The Police Chief's contract, open to public review, authorized payment of $17,577 "per pay period," but did not define "pay period" which was, in fact, every two weeks. The contract was intentionally deceitful.
California Attorney General
Because the council members were all in on the chicanery, they did not raise any objections or take any actions against themselves or City officials.
One tight group of thieves. California Attorney General Kamala Harris, who was the power behind California's pro-consumer Homeowner's Bill of Rights governing foreclosures, filed a lawsuit against the gang of corrupt politicians and officials, essentially arguing "someone had to do it."
The Bell defendants successfully challenged the A,G.'s suit in the trial court. The matter proceeded to the California Court of Appeal in Los Angeles. The defendants claimed the A.G. had "no standing" to bring the lawsuit and violated the Doctrine of Separation of Powers.
Separation of Powers
The big issue in this case was to what extent can the courts/the judiciary review decisions of a city council. "The powers of state government are legislative, executive, and judicial. Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution." (Cal. Const., Art. III)
The Court of Appeal ultimately overturned the trial court. It found the Doctrine of Separation of Powers prevents courts from considering the wisdom of legislative and executive decisions, including decisions pertaining to compensation of council members and city officials as those decisions are left to the discretion of the municipal authorities.
However, the Court found the A.G. had authority if the decisions of the City were outside of their authority.
The Court: "The salaries approved by the Councilmembers were so palpably unreasonable and arbitrary as to indicate an abuse of discretion as a matter of law, and were thus ultra vires acts (unlawful) which should be struck down."
California's Attorney General had the power to pursue this action on behalf of the City of Bell and make claims for restitution of the overpayments made to City officials and council members, even as criminal actions are pending against most of the defendants.
As it should be.
Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. He may be reached at email@example.com or at the firm's web site http://www.portersimon.com.
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