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Bell scandal: Rizzo had his $80,000 loan replenished each year, city employee testifies

March 1, 2011 |  7:12 pm

During his tenure as Bell’s city administrator, Robert Rizzo replenished an $80,000 loan at least five times, telling staff the action was legal because the City Council had approved an addendum to his employee contract.

Lourdes Garcia, Bell’s director of administrative services, testified Tuesday that she did not question Rizzo’s authority each time he requested that his loan be topped off.

“It seemed reasonable,” said Garcia, who took two loans herself from the city and was given limited immunity in exchange for her testimony.

In 2002, council members voted in favor of Rizzo’s contract addendum, which was drafted by then-City Atty. Edward Lee. Two years later, Rizzo told Garcia he had paid back the loan and requested the amount be refreshed. Over the next three years, he would pay off some of the loan, then request more money to bring the total back to $80,000.

Rizzo’s attorney said his client was simply cashing out his vacation days and was entitled to the loan because it was approved by the City Council.

The Los Angeles County district attorney’s office contends that the $1.9 million in city funds lent to employees over the last decade was a misuse of public funds.

Rizzo is charged with masterminding the loan program, and he and his former assistant, Angela Spaccia, are accused of writing their own employee contracts without council approval. Spaccia, Mayor Oscar Hernandez and former Councilman Luis Artiga are charged with accepting city loans.

Hernandez’s attorney argued that his client received a cash advance, not a loan. “It’s a salary he would be getting anyway,” Stanley Friedman said. Hernandez, who said he used his loan to buy computerized cash registers and a meat scale for his grocery store, paid back the money in four months.

“Mr. Hernandez is like a dinghy compared to the others who are battleships,” Friedman said. “He got $20,000. The witness got $177,500.”

-- Corina Knoll