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Swap Meet Goliath Spent $80,000 in Election Fall

August 07, 1986|LEE HARRIS | Times Staff Writer

PARAMOUNT — Modern Development Co., the operator of the Paramount swap meet, spent nearly $80,000 on three candidates who lost in the April elections, while the three winners spent a combined total of less than $15,000, according to campaign financial statements filed with the city clerk's office.

With just 3,092 people casting ballots for three council seats, the winners' votes cost them about $3 for each of the 4,248 votes cast for them. But the swap meet spent about $25 apiece for the 3,126 votes their three candidates polled.

Modern Development was trying to defeat Councilman Charles R. Weldon, who supported a daily tax on the swap meet, along with two other candidates who also favored the tax. Modern Development directed the bulk of its money to three candidates who said they opposed the tax. The company also gave a token amount to a fourth candidate, who also lost.

Weldon, who spent $9,309 of his own money, won his third four-year term on the council. At the same time, political newcomers Manuel E. Guillen and Henry Harkema, who supported the tax, also won seats.

Guillen spent $4,431 and Harkema spent only $412, less than any of the seven candidates battling for the three seats.

"I was fighting some awful big money. But I decided to do things my way, walk the neighborhoods, not to accept donations, and this way I don't owe anybody anything," Harkema said.

Harkema, who retired from the Paramount County Water District about 10 years ago, said he spent his money on about 100 small signs and personalized telephone pads, which he handed out door-to-door.

In contrast, Modern Development contributed more than $40,000 in loans to Mike Pete Delivuk, Ted Mosier and Richard DeBie. The company also contributed nearly $12,000 in office rental space and salaries for office help for the Mosier, DeBie and Delivuk campaigns.

The company also paid more than $26,000 to a Newport Beach firm for professional management and consulting services for the three candidates.

The company also contributed $200 to Councilman John A. Mies, who was defeated in his bid to win a fifth term. Mies, who opposed the tax, spent

'Went for Naught'

"We felt we had to support the . . . candidates who we thought would win the election and give us fair treatment on the council," said Vaughan Herrick, general manager of Modern Development. "Unfortunately, it all went for naught."

In June, 1985, the council passed an ordinance requiring Modern Development to pay a business license fee of $1 per day for each vendor at the 27-acre Paramount Drive-In, where the swap meet is held. The city also required that each vendor pay $1 per day. The collections are expected to generate about $360,000 a year for the city.

After the council approved the fees, Modern Development, which had been paying the city about $45,000 in annual business fees, refused to pay the additional tax. The city sued the company. The company countersued, charging that the fee is a violation of civil rights and an attempt to drive the company out of business.

Los Angeles Superior Court Judge Edward M. Ross recently dismissed the part of the company's lawsuit seeking $5 million each from Weldon, Mayor Gerald A. Mulrooney and Councilwoman Esther Caldwell, who all voted for the tax, the city manager and the city's former finance director.

The suit, which sought $5 million from the City of Paramount for allegedly violating the company's civil rights and attempting to drive it out of business, was allowed to stand. No trial date has been scheduled. The court ruled that "continuous prosecution of the five people was frivolous" and served no "good cause." The court also ordered Modern Development to pay the city $5,000 to help defray the cost of litigation.

$362,117 in Back Taxes

In March, Ross also ordered the company to turn over to the city the tax money it had been collecting but withholding. By the end of May, the company had paid the city $362,117 in delinquent taxes, according to city officials.

Herrick said the company has appealed the court's ruling dismissing a portion of the suit. He said that if the company does not receive a favorable ruling and the tax is allowed to stand, "We will support candidates at the next election."

The next regular election is in April, 1988. Seats held by Mulrooney and Caldwell will be on the ballot.

Herrick said the company, which funneled most of its contributions through the Citizens for a Better Paramount campaign committee, has yet to determine how and if the loans will be repaid.

"The committee will have to make a determination," Herrick said.

Both Delivuk and Mosier said they believed that the funds were contributions, not loans, and would not have to be repaid. DeBie could not be reached for comment.

As far as 1988 is concerned, Delivuk said he is "still interested. I expect to be a candidate in the next election."

Mosier, who served for 16 years on the council before being defeated in 1984, said, "Sixteen years is enough. I will not run in '88."

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