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Official Quits After Record Is Revealed

Government: Baldwin Park leaders say they were unaware of interim city manager's fraud conviction when they hired him.

April 24, 1998|RICHARD WINTON and NICHOLAS RICCARDI | SPECIAL TO THE TIMES

Last week, the Baldwin Park City Council hired as its interim city manager a man who was once convicted for his role in a $3-million land fraud scheme and was booted from a professional association of city managers.

Council members said they didn't have a clue about William H. Kraus' criminal past until Tuesday, when anonymous letters arrived at City Hall. They said no one ran a background check on Kraus, and he didn't include his criminal history on his resume.

On Thursday, three hours after The Times called Kraus' office for comment on his past record, he resigned from his post and abruptly left Baldwin Park City Hall, city officials said.

"May I take this opportunity to formally withdraw from your recent offer to accept the position of interim city manager," Kraus wrote in his resignation letter.

"I have made the decision to maintain my contractual relations with my professional/homeowner associations and universities."

Critics said the tale of Kraus' brief tenure at Baldwin Park--his job officially began Monday--points up weaknesses in the government of this blue-collar city of 74,000 straddling the San Bernardino Freeway.

City officials vowed Thursday to conduct background checks on future job applicants.

City Councilman Bill Van Cleave, who was on the losing end of a 3-2 vote to appoint Kraus, complained that his requests for more information about the job candidate were rebuffed. He said the bloc that voted for Kraus routinely ignores dissent and rams through appointments and ordinances.

Mayor Bette Lowes on Tuesday scheduled a meeting for next week to discuss Kraus' record, but said some of her colleagues did not seem very concerned by the revelation that their interim city manager was a convicted criminal.

Linda Holmes, the city's interim finance director, resigned Thursday after the City Council failed to take swift action against Kraus once members learned of his past.

"I understand the City Council's legitimate concern that Mr. Kraus be given an opportunity to answer the charges against him at the special City Council meeting," Holmes wrote in her resignation letter.

"However . . . Mr. Kraus has not been placed on administrative leave, but has been allowed to continue to manage the city."

City Councilman Manuel Lozano defended the council's pace, saying that Mayor Lowes had been out of town. "We just got the information Tuesday evening."

Kraus left his job as Norwalk city administrator in 1983 amid a city investigation of his business dealings.

Three years later, the district attorney's office charged him with failing to report $60,000 in personal loans, and he pleaded no contest to one misdemeanor count. He was sentenced to a $1,000 fine or 330 hours of community service and barred for three years from serving in public office.

In a separate case, Kraus pleaded guilty in 1987 to a federal charge of mail fraud for his role in a fraud ring selling artificially inflated real estate in Utah and California. After cooperating with authorities, Kraus was sentenced to five years probation, a $1,000 fine and $20,000 in restitution.

After those convictions, Kraus was expelled from the International City Management Assn., a Washington-based trade organization of city administrators and managers.

Kraus did not return calls to his private Lake Forest consulting firm or his City Hall office.

Kraus went to work for Baldwin Park after Councilman Lozano took a management course that Kraus taught at Cal State Northridge, Lozano said. Through that connection he became an unpaid consultant for the city last year and eventually interim city manager, a post that paid $50 an hour, Lozano said.

"I've always respected him," Lozano said. "This came as a shock and disappointment."

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