A consulting business run by the wife of Los Angeles City Atty. Rocky Delgadillo has failed to file state tax returns for several years and until Friday operated without a city business license -- a type of offense her husband's office is responsible for prosecuting.
In 2005, the state Franchise Tax Board barred Michelle Delgadillo's business, C.R.D. Inc., from operating in California because it had neglected to file tax returns every year since it was founded in 2002, records show.
According to economic disclosure forms that Delgadillo is required to file so the public can be aware of his most significant sources of income, his wife's consulting work generated between $10,000 and $100,000 a year from 2002 to 2005. Under city rules, the city attorney is required to report only a range of income earned by the business.
Michelle Delgadillo, listed as president of the corporation, has declined through her husband's office to comment. It was unclear exactly what work her business did or who its clients were, but records show it operated out of the couple's Hancock Park-area home. A onetime aide to former City Councilman Joel Wachs, Michelle Delgadillo has identified herself as a consultant and homemaker in city documents.
According to a Delgadillo spokesman, Michelle Delgadillo paid taxes on the income she earned over the years. However, she reported that income on her personal tax returns, not her business' forms.
Delgadillo's office refused to answer a list of questions submitted by The Times about the business. Instead, officials released a short statement late Friday saying that C.R.D. Inc. never did work on any city attorney contract.
"If there are any issues with C.R.D., Michelle takes full responsibility and intends to resolve them," the statement read.
Until Friday, Michelle Delgadillo's company operated without what is known as a tax registration certificate. Business owners who fail to register with the city are subject to criminal or civil prosecution by the city attorney's office. Those cases are referred by city finance officials. In the case of C.R.D., no such referral was made -- and if one had been, a Delgadillo spokesman said, the city attorney would have recused himself from handling it.
After The Times inquired about C.R.D. Inc. on Friday, the business applied for -- and received -- a tax registration certificate retroactive to June 10, 2002, the date the business was incorporated. A city finance official said city policy prohibited her from disclosing the amount of penalties and fees that were paid.
