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City Controller Candidate Linked to Tax Problem

Politics: Laurette Healey says she found out only last summer that her firm had owed the state a small amount since 1997. But foe's campaign cites the issue in attacking her.

March 23, 2001|JEAN MERL | TIMES STAFF WRITER

A holding company headed by businesswoman Laurette Healey, who is running for city controller on a platform of financial acumen, has owed California a small amount of back taxes since at least 1997, a state document shows.

On Oct. 15 of that year, the Franchise Tax Board issued a "notice of state tax lien" against Rett Holdings Inc., of which Healey is president, for $1,252. Healey on Thursday acknowledged the debt but said it was mainly a technical matter that will be resolved when she completes paperwork dissolving the company, which she said has long been "dormant."

Healey said she was unaware of the debt until she received a past-due notice from the state in July. In September, she said through a campaign spokesman, she made a $500 payment and had her accountant write the Franchise Tax Board a letter asking for a reduction in the amount owed. At the same time, she said, she instructed the accountant to begin the paperwork to dissolve the company. The work has not been completed, she acknowledged, nor has she made any further payment.

'Let's Keep It in Perspective'

Healey downplayed the significance of the state lien and said it should be evaluated in the context of what she called a long, successful career running entertainment-related businesses, for which she says she has always paid her taxes on time.

"Let's keep it in perspective," Healey said of the lien.

Nonetheless, revelation of the lien is likely to be problematic for a candidate for an office that is the city's fiscal watchdog.

The campaign of Councilwoman Laura Chick, Healey's chief rival for the controller's post, was quick to point that out.

"If a candidate for controller can't pay her bills, what other promises will she break?" said Steven Afriat, Chick's campaign consultant. "People who don't pay their taxes should have no right to decide how to spend them."

A copy of the tax lien document was provided to The Times by someone who is a Chick supporter but who is not affiliated with her campaign. The source turned over the copy and other documents on condition of anonymity.

Healey, who was encouraged to enter the race by Mayor Richard Riordan, did not get into the contest until January and has had some difficulty raising money, despite help from the mayor and his wife, Nancy Daly Riordan.

By Feb. 24, the end of the latest campaign finance reporting period, Healey had raised about $73,000--including a $30,000 loan to herself--compared to Chick's $385,800. Chick, who entered the race more than a year ago, also has sewn up endorsements across a broad spectrum, although Healey has added some well-known names to her list, from producer Norman Lear to the Howard Jarvis Taxpayers Assn.

Riordan, who has repeatedly clashed with Chick, is said to be considering whether to fund independent campaigns on behalf of Healey and Deputy Mayor Rocky Delgadillo, who is running for city attorney.

Other documents provided to The Times involved two 1992 county tax liens and a 1994 default judgment for legal fees over a Los Angeles-based company, True North Film and Video, that listed Healey as company president.

Healey said Thursday that she resigned from the firm in the spring of 1990 and had no knowledge of any of those matters. She said that the company had no such problems while she was at its helm and that she left on good terms to form her own venture.

Also on the April 10 ballot for controller is Mervin Evans. The three candidates will participate today in a forum hosted by public affairs commentator William Rosendahl of Adelphia Communications. The forum, the only scheduled debate in the campaign, will be shown on cable television.

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