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Car Dealer Keeps His State Post Despite Violations

August 13, 1988|MICHAEL MILSTEIN | Times Staff Writer

Gov. George Deukmejian this year reappointed a Glendora car dealer to the board that oversees the state Department of Motor Vehicles even though the governor knew the DMV two months earlier had fined the dealer for hundreds of state Vehicle Code violations.

The DMV fined dealerships and affiliated companies headed by Eminiano (Jun) Reodica $100,000 last December for selling used cars as if they were new and for failing to submit car registration information to the state in time. Only three times has the DMV levied fines of $100,000 or more against car dealerships.

Kevin Brett, Deukmejian's press secretary, acknowledged that the governor was aware of the fine when he considered Reodica's reappointment in February to the state New Motor Vehicles Board. But, Brett said, the governor was satisfied that the problems had been corrected after he ordered Motor Vehicles Director Del Pierce to talk with Reodica.

Brett said there is "no personal, social or professional relationship" between Reodica and the governor. Deukmejian was introduced to Reodica by the governor's late cousin, also named George Deukmejian, in the early 1980s.

Gave $20,000 to Campaigns

Reodica and his companies have contributed nearly $20,000 to Deukmejian's political campaigns since 1983.

Reodica bought his major dealership--Grand Chevrolet Inc. in Glendora--from the governor's cousin in 1978. Reodica continues to lease the land for the dealership from the cousin's widow, Jean Deukmejian. She said that when her husband died 2 1/2 years ago, she invested $200,000 from his life insurance policy in Grand Wilshire Finance Corp., also controlled by Reodica. She said she has never earned any interest on the unsecured investment.

Last week, the DMV suspended the sales licenses of two of Reodica's companies, Grand Chevrolet and Grand Motors Inc., for more recent violations. Grand Chevrolet, Grand Motors and Grand Wilshire Finance all filed for protection from creditors under Chapter 11 of the federal Bankruptcy Code within the last week.

The suspensions--for improper business practices and failing to meet financial obligations--were "a very unusual action," said DMV spokesman William Gengler. "We usually do not suspend a dealer's license unless it's something extremely serious."

Brett said the governor learned of the suspensions only in the last week. "If the most recent allegations had come to the governor's attention, Mr. Reodica would never have been reappointed to the board," Brett said.

The nine-member New Motor Vehicles Board is the only appellate body with jurisdiction over the DMV, which among its other duties regulates state car dealerships. It maintains "total discretion" over DMV rulings, according to Sam W. Jennings, the board's executive secretary, and is the only body that can overturn DMV penalties against car dealers.

Removal 'Under Review'

Reodica's removal from the New Motor Vehicles Board is "under review at the present time," Brett said. "Out of fairness, we certainly want to hear Mr. Reodica's side of the story."

Only the governor can remove a member he has appointed to the board, according to the state Vehicle Code, "for continued neglect of duties required by law, for incompetence or unprofessional or dishonorable conduct."

Reodica and Deukmejian spoke briefly Aug. 1 as both were boarding a plane from Hong Kong to Manila when the governor was traveling in the Far East, Brett said. But he said the governor did not then know of Reodica's recent troubles and Reodica did not mention them.

Campaign donations from Reodica and his companies to Deukmejian ranged from a $3,000 contribution in Reodica's name in 1982 to $10,000 from Grand Wilshire Leasing in mid-1985. The most recent gift was $1,000 from Grand Chevrolet in late 1987, three months before Deukmejian reappointed Reodica to the New Motor Vehicle Board.

Associates say they believe Reodica has left the United States for his native Philippines. They say efforts to locate him have been unsuccessful.

Reodica's first four-year term on the board expired Jan. 15, 1987. A one-year grace period allowed him to retain his seat until he was reappointed by Deukmejian in February.

At that point, Grand Chevrolet ranked among the largest Chevrolet dealerships in the nation but had been on probation by the DMV for nearly two years. Since March, 1986, hundreds of separate violations of the state Vehicle Code were uncovered in at least three extensive DMV investigations of Grand Chevrolet and affiliated companies, DMV spokesman Gengler said.

As a result of the first investigation, the DMV in March, 1986, suspended Grand Chevrolet's license for 10 days for selling cars to customers, then buying them back and reselling them at a higher price to the same customers. This apparently was done without the customers' knowledge by misrepresenting the sales agreement. The suspension was stayed provided that the dealership served a year of probation without any further violations.

Brett said the governor never knew of this particular investigation or of the penalty imposed.

During the year of probation, according to DMV reports, inspectors in Southern California launched another investigation into operations of Reodica's companies as far back as early 1986. That probe turned up nearly 1,500 violations of the Vehicle Code, stemming from the dealership's failure to submit vehicle registration fees and information to the state by the required deadlines and for selling used cars as new ones.

Last December, Grand Chevrolet was fined $60,000, Grand Wilshire Leasing was fined $40,000 and both were assessed several thousand dollars in administrative fees. Grand Chevrolet was put on probation for an additional year.

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