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Top Bell administrator testifies she thought it was legal to lend city money to politicians and employees

February 28, 2011 |  2:53 pm

Bell’s top financial director testified Monday that she did not realize until the city’s salary scandal erupted last summer that city officials could be breaking the law by lending more than $1 million in public funds to municipal workers, elected officials and a local car dealer.

Lourdes Garcia, who has been given limited immunity in exchange for her testimony, said former City Administrator Robert Rizzo directed her to draft the loan agreements for city employees for which the only collateral required was an employee's vacation and sick days.

She said she took two loans herself for totaling $177,500, both suggested by Rizzo. Garcia said she wrote her own loans agreements and signed the documents without any oversight.

"I was in Mr. Rizzo's office and he told me I needed to cash out my vacation because the balance was too much,” she testified.

"He told me I needed to start thinking about taking another loan. I said I don't really need the money now, but I could always take it."

Garcia’s testimony comes in the fourth week of preliminary hearings that will decide whether ranking Bell leaders must stand trial for alleged public corruption. Six current and former council members already have been ordered to stand trial for alleged misappropriation of public funds because of their extravagant salaries.

On cross-examination Monday, Rizzo’s attorney, James Spertus, took issue with Garcia’s insistence that she drafted loan agreements only on the city administrator’s direction.

“It’s very important to you to minimize your role and maximize Mr. Rizzo’s, correct?” Spertus asked Garcia.

“I’m not trying to minimize anything,” Garcia replied. “I’m just trying to answer what I know.”

Garcia testified that the loan agreements were modeled after a template drawn up by then-City Atty. Edward Lee.

“Did you have any belief whatsoever that there was anything wrong with this city loan program?” Spertus asked.

“I didn’t believe there was anything wrong,” said Garcia, who has worked for the city of Bell since 1991 and was one of the city's top wage earners

Spertus argued that the loans were fully collateralized, did not cost the city money and were used to buy homes, continue education or for family financial reasons and not “to go to Vegas.”

Rizzo and former Assistant City Administrator Angela Spaccia are accused of writing their own employee contracts without council approval. Former Councilman Luis Artiga and Mayor Oscar Hernandez are also charged in the case for participating in a program in which $1.9 million in city money was lent out.

-- Corina Knoll