A City of Industry, and Conflicts Galore

Anyone who follows my blog knows that my favorite city to write about is Vernon, CA, the "Dream Machine," a city with lots of industry and no one other than city employees who might complain about what's in their backyard, or call for oversight.

But Vernon is not the only city of its kind, not even in Los Angeles County. This week, the Los Angeles Times wrote about another such city, the aptly named City of Industry, which has 2,500 companies and 125 registered voters. The Times had written about the city back in 2009, which led the district attorney to investigate voter fraud, but then drop the investigation two years later.

Now the D.A. is doing another investigation, along with the state controller, into the contracts the city had with companies owned by the ex-mayor, "which city-commissioned auditors found had reaped $326 million from Industry contracts since 1995." That's keeping it in the family.

Now that the city government has turned its back on the ex-mayor, he appears to be trying to get back into power. More than 10% of the registered voters share the ex-mayor's last name, and as next week's election approaches, the election rolls have grown by 40%. The ex-mayor is running a slate of candidates.

As in Vernon, many city employees live in city-owned homes at discount prices. Some registered voters use businesses (12 of the new voters at businesses associated with the ex-mayor) and even a church as their address, which is illegal. In a city that rarely holds elections, and where for most ballot measures are usually unanimous, this interest in an election would appear unusual.

One reason for the interest is fear. For example, according to the article, the city manager fears that he and other employees who've opposed the ex-mayor will find themselves out of a job if the ex-mayor's candidates win. And with so few voters, anything can happen.

The ex-mayor also has reason to fear. Last week, "the city sued the former mayor and relatives who are involved in the family businesses, alleging that they misappropriated millions of dollars through fraudulent billing, unauthorized work and other means." The city government certainly took its time doing this.

This looks like another city that should be taken over by the county and the state, with the removal of those officials and employees who knew about or participated in the conflicts of interest and related misconduct.

But, more important, since cities are subdivisions of the state, the state should take full responsibility for preventing this sort of thing, not just prosecuting them after years of misconduct. The state should set up an oversight body to investigate such cities and prevent them from continuing to act for the personal benefit of those who run them or for whose benefit the cities are run, if they bring in stooges to do the work.

Making it easy for businesses to operate without local oversight and for those who run a local government to privatize its services to its leaders' own companies is not what elections are supposed to be for. One might argue that this is precisely what is happening at every level of government, only not so crudely. But the least state governments can do is start by preventing these egregious cases. Otherwise, they are effectively saying that all is fair in local government, and that government ethics is a joke.

For my blog posts on Vernon, click here.

Robert Wechsler
Director of Research-Retired, City Ethics

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