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Montebello misspent over $31 million, state audits find

September 22, 2011 | 11:19 am

http://latimesblogs.latimes.com/.a/6a00d8341c630a53ef014e60cfdec1970c-400wiThe city of Montebello misspent more than $31 million over five years through questionable expenditures, loans and fund transfers, according to two audits released Thursday morning by state Controller John Chiang.

"At the expense of local job development, street repair and schools, Montebello has made it a habit to tap legally restricted funds to cover its budget and cash shortfalls," Chiang said in a statement. "It appears the city moved money wherever it wanted, whenever it wanted, regardless of the law."

The audits come as city officials are frantically trying to seek a loan so the city won't run out of cash this fall. In the last year, the city has been investigated by the L.A. County district attorney's office and the federal government.

The audits of the city's redevelopment agency and use of gas tax funds from 2005 to 2010 also found that officials spent money intended for alleviating blight and promoting jobs on questionable expenses such as fancy dinners in Las Vegas for the city manager and embroidered polo shirts and golf tournament registrations.

The audit said the city should pay back nearly $3.6 million in inappropriate charges it made over the years to its redevelopment agency, including $20,000 in golf fees and $3.4 million in unsupported "administrative costs."

The audit also noted that city officials "have a history of authorizing forgivable loans to people who are political contributors," although it did not identify any illegalities in those loans. The city has, over the years, given more than $20 million to companies controlled by developer Hank Attina, who is a close friend of City Atty. Arnold Glasman and also close to former Mayor Art Payan.

City officials took issue with several of the findings and accused the controller of playing politics by mentioning the forgivable loans to Attina and other developers.  

City officials did persuade the controller to drop one finding: that the redevelopment agency had inappropriately paid  $1,300 for Dodger tickets. The city said that, in fact, those tickets had been charged to the city's general fund. Chiang dropped that finding but noted  it may not have been appropriate for the city to use general fund money for Dodger tickets either.


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-- Jessica Garrison

Photo: Montebello City Hall  Credit: Anne Cusack / Los Angeles Times