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Judge expected to rule on whether Bell’s Robert Rizzo should stand trial on conflict-of-interest charges

March 16, 2011 | 10:21 am

A Los Angeles County judge is expected to decide Wednesday whether Bell's former city administrator, Robert Rizzo, should stand trial on charges that he steered city contracts to a partner in a horse-racing business.

Rizzo, who has already been ordered to stand trial on charges of misappropriation of public funds through his alleged lavish contracts and awarding of loans to colleagues and city politicians, is also charged with misappropriation of public funds and conflict of interest relating to his business relationship with Dennis Tarango, the city's planning director at the time.

This is the last of three scheduled preliminary hearings for Rizzo and seven other current and former Bell city officials arrested in a corruption-and-salary scandal. The hearing will likely be completed Wednesday.

During a hearing Tuesday, Deputy Dist. Atty. Max Huntsman pointed out multiple city agreements with Tarango's engineering firm from 2005 through 2009, the years the Rizzo and Tarango co-owned Golden Aggie Ranch Inc.

Among the documents were requests by Tarango for pay raises and Rizzo-approved environmental reports that Tarango's firm was hired to conduct. Of the $10.4 million paid to Tarango's firm since 1995 for its building-and-safety, engineering and planning services, nearly $3 million was paid out while he and Rizzo were private business partners.

Tarango testified Tuesday that it was Rizzo who proposed that the two start a horse-racing venture to reap tax benefits.

"I mentioned to Mr. Rizzo I was paying a lot of taxes the year before and I'd like to find a way to reduce that," Tarango said, recounting a conversation he had with Rizzo about seven years ago.

A few days later, he testified, Rizzo approached him and brought up the tax advantages of owning racehorses. After meeting with an accountant, the two formed Golden Aggie Ranch in 2004 as an S corporation, which does not pay federal income tax. Instead, income or loss is divided among shareholders, who report it on their own income tax returns. The corporation and its assets, not shareholders, are liable for the losses of the business.

Tarango testified that he believed his relationship with Rizzo was proper and their business dealings were legal.

Read the full story here.


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-- Corina Knoll