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District attorney investigating business fees in Bell

November 5, 2010 |  5:52 pm

Robert Rizzo

Los Angeles County prosecutors are investigating Bell’s practice of arbitrarily requiring some business owners to pay thousands of dollars in fees, marking the seventh outside investigation into alleged wrongdoing at City Hall.

The Times reported earlier this week that former Bell city administrator Robert Rizzo and others demanded that restaurants, tire shops, auto detailers and a market either pay special fees or guarantee thousands of dollars in sales tax revenue to the city each year.

Since then, more merchants have come forward to say they also were forced to pay the fees.

The owner of a Bell carwash said he was so outraged at paying his $300-a-month fee that he wrote "bribe" in Spanish on the memo line of some of his checks to the city.

"I put that because I knew it was a bribe," said Gerardo Quiroz, who paid a total of $10,000 to the city. Quiroz owns carwashes in other Los Angeles County cities but said Bell was only one that charged the fees.

The Los Angeles County district attorney’s office has assigned half a dozen prosecutors and several investigators to look into possible criminal activity in Bell. Investigators have spoken to at least three Bell business owners who allege that they were illegally charged under the fee program

 "If we find something that is criminal that we can prove, we will certainly file charges," said Dave Demerjian, head of the district attorney's Public Integrity Unit, which is leading the investigation. "We are still looking at a lot of potential issues in Bell ... and other targets."

Bell city officials announced they also were investigating the fees and could decide in the next few weeks whether to scrap the program.

Interim City Administrator Pedro Carrillo said some businesses are still being charged the fees and that his office is trying to determine exactly how many. It is unclear whether the fees would be refunded if they are found to be illegally obtained.

"We will take action, depending on the findings," Carrillo said.

City records reviewed by The Times as well as interviews show that more than 20 businesses were subject to fees and that the city collected at least $245,000 in revenues. But the records cover only a fraction of the city's fee collections, so that number is expected to grow.

It appears that city officials targeted mostly small, mom-and-pop businesses.

The district attorney's probe into the fees marks the latest in a string of investigations in Bell, where eight current and former officials have been charged by prosecutors with public corruption.

The state attorney general’s office filed civil charges against Bell officials and has asked a court to appoint a monitor to oversee Bell’s operations. The U.S. Justice Department is investigating potential civil rights and voting rights violations by the city while the state controller, U.S. Securities and Exchange Commission and state Department of Corporation have each launched probes into Bell’s finances.

The scandal broke in July when The Times revealed that top officials were received huge salaries, notably Rizzo, who was set to earn $1.5 million this year.

But the revelations about the special fees underscore evidence that the city took unusual and aggressive measures to generate revenues. State auditors already have concluded that Bell levied unlawful taxes and fees on its residents, most of whom earn relatively low incomes. The city also imposed one of the highest property tax rates in Los Angeles County.

-- Robert Lopez and Paloma Esquivel in Bell

Photo: Former Bell city administrator Robert Rizzo, seated at left, appears in court.

Credit: Los Angeles Times