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Arraignment for 8 current, former Bell, California officials postponed

From Sara Weisfeldt, CNN
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Brown: Bell not only corruption case
STORY HIGHLIGHTS
  • NEW: Bail reduced for three defendants
  • Arraignment delayed until late October
  • High salaries in Bell sparked outrage in July
  • Defense attorney says case is about politics

Los Angeles, California (CNN) -- Three current or former Bell, California, city officials, accused of misappropriation of public funds, won bail reduction Wednesday.

The arraignment for them and five others arrested in the case was postponed until October 21 after a defense attorney asked for more time.

The bail for former City Manager Robert Rizzo was reset from $3.2 million to $2 million. Assistant City Manager Angela Spaccia's bail went from $377,000 to $350,000, and Mayor Oscar Hernandez won a $10,000 reduction to $275,000.

City Council member Luis Artiga, former council member George Cole and Vice Mayor Teresa Jacobo showed that their bail funds come from legitimate sources and can post it anytime, a judge ruled.

The charges allege that the officials misappropriated more than $5.5 million, including being paid for phantom meetings, District Attorney Steve Cooley said Tuesday.

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Rizzo, Spaccia and Police Chief Randy Adams resigned after media reports that they were making several hundred thousand dollars a year each. Adams was not charged, Cooley said.

"The complaint alleges they used the tax dollars collected from the hard-working citizens of Bell as their own piggy bank, which they looted at will," Cooley said.

Other defendants are council member George Mirabal and former councilman Victor Bello.

Rizzo, who was being paid nearly $800,000 annually, is charged with 53 counts of misappropriation of public funds and conflict of interest. Among the allegations are that he wrote his own employment contracts and that they were never approved by the City Council, prosecutors said.

Cooley alleges that Rizzo, hired as Bell's chief administrative officer in September 1994, gave nearly $1.9 million in unauthorized loans to himself, Spaccia, Artiga, Hernandez and dozens of others. Rizzo is responsible for $4.3 million of the city's losses, Cooley said.

Rizzo's attorney, Jim Spertus, said Cooley ensured that reporters witnessed the arrest of his client and called it "grossly unprofessional."

"Candidate Cooley wants some good campaign material," Spertus said, making reference to the district attorney's candidacy for California attorney general.

"[Rizzo's] salary was openly transparent to the City Council, and the council approved it," he said, adding that his client will fight the charges.

Spertus also said the city's loan program followed procedures and that Cooley's office did not interview many pertinent witnesses.

Prosecutors charged Hernandez, Jacobo, Mirabal, Cole, Bello and Artiga with nearly two dozen counts of misappropriating approximately $1.2 million of public funds. Cooley alleges that they held "bogus meetings" that lasted only minutes at a time -- or not at all -- and collected payment.

"The [council] for their part provided no checks, no balances," Cooley said. "The council members were busy enriching themselves for collecting money for meetings that never occurred."

California Attorney General Edmund G. Brown recently sued several of the former officials "to recover the excess salaries" that Bell officials were being paid. He also was pursuing a reduction of their pension benefits.

"This is a very serious matter when public officials breach their duty to the public and enrich themselves with enormous obscene salaries which then trigger pensions of similar magnitude," Brown said.

The suit accuses officials of fraud, civil conspiracy, waste of public funds and breach of fiduciary duty. It also alleges they deliberately misled citizens about the accurate amount of their pay.

Bell, in southeast Los Angeles County, had 36,624 residents as of the 2000 census. The median annual income is less than $35,000.

Rizzo's last annual base salary was $787,638, Adams earned $457,000, and Spaccia received $336,000, according to Brown's office. Before recently cutting their pay, Bell City Council members received $96,000 a year, compared with $4,800 a year earned by council members in similar-sized cities.

Since 1993, the council raised Rizzo's salary 16 times, with an average jump of 14 percent yearly, the attorney general said. In 2005, he received an increase of 47 percent. Since 2001, City Council members also awarded themselves 16 percent raises yearly.

Brown, who is running for governor, said Rizzo prepared a memo for the public saying council members received $673 a month and he was paid $15,478 a month, which would amount to annual salaries of about $8,000 and $185,000 respectively.

CNN's Phil Gast contributed to this report.