The Los Angeles City Council on Tuesday agreed to pay a security company $430,000 to settle a lawsuit alleging libel and breach of contract against the city.
The suit stemmed from security work performed by Alhambra-based Inter-Con Security Systems Inc. at several city locations, including all of the San Fernando Valley's quake-damaged "ghost towns."
Initially, the dispute centered on disagreements over pay rates and work-related expenses. The libel charges came into play after former city security chief Gonzalo Cureton strongly criticized Inter-Con's job performance at the ghost town sites.
The settlement with Inter-Con had been delayed because some council members insisted that a provision be added to the agreement stating that the payment was in no way connected to the allegations of libel contained in the suit. Language to that effect was included in the final agreement, said Deputy City Atty. Dion O'Connell.
The council, O'Connell said, was worried about the "chilling effect" that a settlement of the libel charges might have on city employees speaking in public.
"The council didn't want to send a message that they were caving in on the libel/slander issue," O'Connell said. "The payment is only for contractual obligations and expenses."
Mike Placido, vice president of Inter-Con, said his company--which continues to do business with the city--avoided filing the suit until it became clear that negotiations were not going anywhere.
"The city just stopped paying their bills. We spent a lot of time negotiating before we finally filed suit" in the spring of 1996, said Placido. "Did we get everything we thought we deserved? No, but I will say that I think the settlement was advantageous for both sides."
On Tuesday, the council approved the settlement on an 11-1 vote. Councilman Nate Holden was the lone dissenter.
"They shouldn't be paid one hard nickel, let alone $400,000," Holden said. "There is clear evidence that they didn't do the job, and if they didn't do the job, they shouldn't be paid."
The settlement still must be approved by Mayor Richard Riordan.