YOU ARE HERE: LAT HomeCollections

South Bay Digest

Lawndale : New Treasurer Expected

October 15, 1987

The City Council may appoint a new acting city treasurer tonight to replace City Manager Paul Philips after several residents complained Tuesday that allowing Philips to hold both positions could pose a conflict of interest.

The City Council appointed Philips as acting treasurer on Oct. 1, the same day the council fired former City Treasurer Ray Wood after city auditors discovered he lost $1.9 million in city funds in a speculative securities deal. Wood, 62, had worked for the city for four years on a contract basis.

Several residents at Tuesday's meeting complained that having Philips as acting treasurer could pose a problem because he is also the city's finance director, who is supposed to oversee the treasurer's investment decisions.

In an interview, Philips agreed that the two positions should eventually be separated.

Philips said that he would approach Lawndale real estate agent Norm Wilson before tonight's meeting about accepting the treasurer's job. Wilson could not be reached for comment.

Some residents at the meeting also asked for a county grand jury investigation of the city's handling of the matter. City Atty. David Aleshire questioned the effectiveness of a grand jury inquiry, but said he is considering asking for investigations by the county district attorney's office and the federal Securities and Exchange Commission.

Aleshire also said that the city will probably sue Wood and the companies that handled the investments, which involved investing only a fraction of the price of a security with the hope that the market would rise. Instead the market fell more than the amount invested, wiping out the investment.

After firing Wood, the council said it would move quickly to adopt a formal investment policy, but Assistant City Manager Paula Cone said that one would not be available for consideration until at least the council's Nov. 5 meeting.

Los Angeles Times Articles