Southern California -- this just in

« Previous Post | L.A. NOW Home | Next Post »

Times investigation: Bell demanded extra fees from some businesses

November 1, 2010 |  6:06 pm


For at least a decade, officials in Bell arbitrarily required some businesses to make payments to the city totaling tens of thousands of dollars annually, in at least one case threatening a business owner with closure if he failed to comply, according to interviews and records reviewed by The Times.

The practice, which experts on municipal law say was unprecedented and may be illegal, underscores the lengths to which Bell's officials went to bring in revenue during the last decade, some of which went to pay the unusually large salaries of city officials. 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. Bell's former city administrator, Robert Rizzo, and seven other current and former officials were charged by Los Angeles County prosecutors earlier this fall with multiple counts of corruption, mostly related to efforts to conceal their outsized salaries. All have pleaded not guilty.

Rizzo was set to earn roughly $1.5 million in compensation this year, The Times has previously reported.

The payment scheme affected at least 15 businesses, mostly small operations that include restaurants, tire shops, auto detailers and a market. In some cases, merchants were directed to make thousands of dollars in payments as part of conditional use permits granted by the city. Others were required to guarantee thousands of dollars in sales tax revenue for the city each year.

If their sales failed to measure up to projections, they were told to pay the difference, according to city records and interviews. There do not appear to be any city guidelines explaining why certain businesses were targeted or how officials calculated how much to charge.

In one instance, a tire shop owner paid at least $144,000 over a four-year period, according to city records. Another tire shop owner was required to pay $13,000 a year. Yet the very next permit approved by the city for an auto repair shop did not require the owner to pay any annual fees, records show. One auto dealer had to guarantee the city $80,000 a year in sales taxes or pay the difference.

Read the full story here.

--Paloma Esquivel and Robert J. Lopez

Photo: Residents protesting at Bell City Hall. Associated Press.