COLUMNS: Questions of cronyism, incestuous greed abound in City of Industry By Michael D. Antonovich and Hilda L. Solis
The city of Industry is but the latest in a series of Southern California cities embroiled in scandal and facing charges of mismanagement and corruption.
The small city of Bell brought national attention to city administrators and council members who paid themselves lavish salaries, pushed the city to insolvency, and ultimately landed themselves in jail.
Tiny Vernon, a city with just over 100 residents (most of whom live in city-owned apartments), drew sharp criticism for mismanaging its general fund and operating in a deficit for over two decades.
The same story in Maywood, where the city’s fiscal woes necessitated the dismissal of its entire police department and all but a handful of city employees. Council members in Lynwood allegedly treated themselves to six-figure incomes and lavish trips (for non-city events) that included an outing to a Guadalajara strip club.
The results of a recent audit conducted by KPMG into the financial relationship between the City of Industry and businesses owned by its former mayor and his family are beyond troubling. The allegations include lucrative contracts for municipal services like street cleaning and equipment rentals that paid out as much as six times what other competitors charged for the same type of service.
The audit found that companies owned by Perez and his family received contracts totaling more than $326 million over two decades. Though Perez is said to have abstained from voting on these contracts, the audit findings clearly raise questions of cronyism, incestuous greed, and backroom deals.
State law describes corruption as a breach of public trust, an abuse of a government position to obtain money, gifts or preferential treatment. Given the magnitude of the audit findings on the City of Industry, we are requesting a grand jury investigation into possible fraud, corruption and illegal activity as well as a thorough review of the city’s administrative and internal accounting controls by the state controller. We have asked the investigation also include cities and unincorporated areas surrounding Industry.
Revealing and uncovering corruption requires an engaged citizenry, a media with a watchful eye, and a highly transparent government.
We can no longer ignore the common denominator across all of these scandalized cities — a disengaged citizenry, a weakened news media, and a government lacking sufficient transparency and controls. Putting a stop to the scandalous behavior described above required local media outlets and journalists to break the story, engaged city residents to confront entrenched city officials, and law enforcement agencies prepared to prosecute these cases and win.
Each of the 88 cities in Los Angeles County face challenges and confront liabilities. However, the majority are well-run, responsible and efficient in their delivery of quality municipal services to their residents, growing their economic base, improving business conditions and maximizing job-creation. This latest scandal seems like déjà vu all over again and is a reminder to all community members of our shared responsibility to prevent corruption.
Michael D. Antonovich and Hilda L. Solis are members of the Los Angeles County Board of Supervisors.
The Board of Supervisors unanimously approved my motion, co-authored by Supervisor Hilda Solis, which requested the District Attorney to conduct investigations into possible fraud, corruption and illegal activity on the part of the former Mayor of the City of Industry. It also asks State Controller to conduct a thorough review of the transactions identified in a KPMG audit and an assessment of the adequacy of the City’s administrative and internal accounting controls for safeguarding public assets and ensuring proper use of public funds.