The Los Angeles County district attorney is investigating two Inglewood elected officials who borrowed hundreds of thousands of dollars through a low-interest loan program originally intended to help city administrators and executives afford to live in town.
The probe stems from complaints about Inglewood's Residential Incentive Policy program, in which Mayor Roosevelt Dorn and Treasurer Wanda Brown participated.
"We're conducting a criminal investigation at this point," said David Demerjian, head deputy district attorney for the office's Public Integrity Division.
Dorn, 71, a two-term mayor and former Municipal and Superior Court judge, borrowed $500,000 in taxpayer money in November 2004, five months after he voted with a bare majority of the City Council to extend the loan program to elected officials, documents show.
At the time he received the 30-year loan with a variable interest rate of 2.39%, the rate for adjustable mortgages nationally was above 5%, according to the Federal Housing Finance Board.
With nearly half the proceeds from the city's loan, Dorn paid off the mortgage on the Inglewood home he and his wife had bought in 1966, according to the documents. He put the rest -- about $265,000 -- in a bank account, he said.
Dorn repaid the loan in October of this year, records show. By then it had become an issue in his reelection campaign. He narrowly failed to win a majority of the vote on Nov. 7, and now faces Councilwoman Judy Dunlap, a longtime political opponent, in a Jan. 9 runoff.
Brown, the treasurer, who is in her early 60s, took out a city loan for $235,000 in 2005, records show. In an interview, she said she was attracted by the low interest rate (2.868% in her case) which, according to the loan program rules, could never vary by more than 2 percentage points.
Brown, who is paid $64,848 a year and plans to seek reelection in April, said she did nothing wrong and does not intend to return the loan unless the city requires it.
City residential incentive programs are not unusual. In Santa Barbara, for example, city Finance Director Robert Peirson said officials launched an employee mortgage assistance program in 2001 for all city employees -- except elected officials.
"The purpose of the program is to assist with recruitment and retention of staff," Peirson said. "The housing cost in Santa Barbara is one of the main hurdles we have to deal with."
