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Warrant Shows Profit by Official

A councilman from West Covina who made thousands on SUV deal denies misconduct.

November 10, 2005|Hector Becerra and Richard Winton | Times Staff Writers

A West Covina city councilman under investigation for possibly receiving a sweetheart deal from a car dealership with business before the city managed to profit twice from the transaction, according to search warrants in the case.

The district attorney's public integrity unit is investigating Councilman Roger Hernandez's purchase two years ago of a Chevrolet Tahoe at a price authorities said was well below market value.

The search warrant, filed in Los Angeles County Superior Court by the prosecutors, alleges that Clippinger Chevrolet sold the SUV to Hernandez for $21,126 on Oct. 31, 2003, even though it was worth $32,000 to $36,500.

Eight months later, Hernandez traded in the car at another dealership in the city, Reynolds Buick, and received $23,500 -- $2,374 more than he paid for it, the documents said.

Hernandez also made a profit on the car he traded in to Clippinger when he got the Tahoe, the records show. The dealership gave him $17,475 for his 1997 Toyota Land Cruiser -- $1,575 more than Hernandez paid for the vehicle a few weeks earlier on EBay.

Hernandez said in an interview Wednesday that he did nothing wrong and that he's being persecuted for being a smart buyer. He said he expected to make a profit when trading in the Land Cruiser because "I got it at a very competitive price."

"I got it for low Blue Book value," Hernandez said. "[The dealership] gave me Blue Book value for it. It seems like I'm being punished for being a good businessman."

Clippinger Chevrolet was one of several dealerships hit by vandals during a night of attacks on SUVs across the San Gabriel Valley that was later linked to the radical environmental group Earth Liberation Front. Shortly after the August 2003 attack, Hernandez was among a group of city leaders who toured Clippinger to assess the damage.

Hernandez said he talked with Ziad Alhassen, president of Clippinger's parent company, West Covina Motors, about purchasing one of the damaged cars.

In March, Hernandez voted with the council majority on a sales tax deal under which the city would give back up to $3.5 million for Clippinger to improve its dealership. Under the agreement, the dealership and the city would share in the profits after a certain sales threshold was met.

Last month, authorities served search warrants at Hernandez's home, West Covina City Hall and the dealership.

Hernandez questioned why the warrant makes no mention about the Tahoe having been damaged by the arson attack and said prosecutors are placing an excessive value on it.

"There's no acknowledgment anywhere that it was a burned vehicle," Hernandez said. "I don't believe they were aware it was damaged.... I did not receive a gift. I made a clean purchase on a vehicle."

Hernandez said he could not explain why another dealership would pay him nearly $1,500 more than he had paid for the Tahoe eight months earlier.

He said he could not remember whether he told the dealer that the car had been damaged in a fire. "I don't know remember if I told them or not. I went in 'This my car,' they looked it over, they had an expert examine it," said Hernandez, who added that he thinks he's the target of a political smear campaign.

The councilman said he felt investigators "are looking to paint a picture that is the worst-case scenario, but unfortunately for them, is not representative of the truth."

Prosecutors declined to comment on Wednesday. Alhassen said, "I am not in a position to comment at this time."

As part of the inquiry, investigators enlisted Department of Motor Vehicles veterans to help them evaluate the vehicles, according to the search warrant.

Attached to the document are several exhibits, including vehicle purchase records, council minutes and Hernandez's state conflict-of-interest forms.

The documents indicate that the investigation began earlier this year after a "citizen informant" contacted prosecutors.

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