Rizzo, other Bell officials got nearly $900,000 in loans from city
The city of Bell gave nearly $900,000 in loans to former City Administrator Robert Rizzo, city employees and at least two council members in the last several years, according to records reviewed by The Times.
The documents show that the city’s former assistant city manager received two loans of at least $100,000 each and that Councilmen Oscar Hernandez and Luis Artiga received $20,000 loans.
Neither Hernandez nor Artiga reported the loans on their financial disclosure forms for 2009, which is required under state law.
Rizzo, whose huge salary sparked a scandal that forced him and other city officials to step down, received two loans for $80,000 each, city officials said.
“The council members should have declared any loans from the city,” said David Demerjian, head of the Public Integrity Unit of the Los Angeles County District Attorney’s Office, which is investigating Bell. “I cannot think of a reason to provide loans to a council member.”
In an interview, Artiga said Rizzo told him about the loan program when he was having financial difficulties last year. Artiga said Rizzo described the loan as a “pay advance” and said that the city would deduct money from his check to repay it.
Artiga said Rizzo told him some employees used the loans to buy homes.
Hernandez did not return calls seeking comment. Bell’s new Interim City Manager Pedro Carillo said it appears that at least 50 people received loans over the last eight years.
“Currently our city attorney has questioned their legality,” Carrillo said. “What we’re investigating is who authorized it, why and how.”
Officials have not yet found any documents showing that the City Council approved the program, which appears to have been created by Rizzo. The loan terms vary in length.
Some were paid over years, others were open-ended, Carrillo said. The collateral appears to be unused vacation time, sick leave and pensions. City officials said no credit checks were conducted. The interest rate was tied to a fund managed by the state treasurer.
At least some of the loans appear to have been repaid.
“We’re still investigating to determine how much was loaned, how much was repaid and how much is outstanding,” said acting City Atty. Jamie Casso.
The loans raise new questions about how officials were compensated in Bell. The Times revealed last month that top city administrators were among the highest-paid in the nation, sparking outrage and investigations by L.A. County prosecutors and the California attorney general.
Rizzo’s contract for this year called for him to receive more than $1.5 million in salary and benefits. The loans appear to come on top of that compensation.
-- Jeff Gottlieb, Kimi Yoshino, Ruben Vives and Richard Winton
Photo: Pedro Carrillo, Bell's interim city manager, is attempting to sort out the various loans. Christina House, For The Times / August 15, 2010