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Bell gave secret loans to two businesses

August 31, 2010 |  5:13 pm

Couple

Then-Bell City Manager Robert Rizzo gave city loans of nearly $400,000 to two businesses without public discussion, approval from the City Council or collateral to back the loans, according to documents reviewed by The Times.

One of the loans, $300,000 given to a local Chevrolet dealer in 2008, is the subject of a court fight because the dealer went out of business within a year of receiving the loan, having repaid nothing.

Although other cities sometimes lend money to local businesses for economic development, Rizzo granted the loans in a highly unusual way, with no statement of economic benefit to the city -- a step that is commonplace in municipal loans.

The second loan was given to the Steelworkers Old Timers Foundation in 2005, a senior citizens group run by George Cole, who was on the Bell City Council then. It is unclear whether the $72,000 loan was repaid. After saying that he would discuss the loan, Cole did not return calls seeking comment.

Several experts said the secret loans violated basic tenets of municipal government and appeared to violate Bell's charter, which requires that all contracts be approved by the City Council.

"This is a complete breakdown of checks and balances," said veteran municipal lawyer Michael G. Colantuano. "It's plainly illegal."

The loan to the Chevrolet dealership marked the second time its owner, Randy C. Sopp, had received money from Bell. The city granted Sopp a $500,000 loan when he moved his dealership into Bell in 1990, according to court records. It is unclear whether Sopp paid any of that loan back. In 2006, the city agreed to "forgive the outstanding loan," the court documents show, and the dealership said it would try to stay in Bell.

Read the full story here.

-- Jeff Gottlieb, Richard Winton and Ruben Vives

Photo: Former Bell City Manager Robert Rizzo and his wife.

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