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Bell administrator testifies that she thought loans were legal

Lourdes Garcia says she didn't realize that loaning city money to colleagues and city workers — including herself — was illegal. She has limited immunity in the sweeping public corruption case.

March 01, 2011|By Corina Knoll, Los Angeles Times
  • Lourdes Garcia, Bell's director of administrative services, testifies during the second of three hearings in the Bell public corruption case. She says former City Administrator Robert Rizzo instructed her to draft loan contracts for council members, city workers and others.
Lourdes Garcia, Bell's director of administrative services, testifies… (Mark Boster, Los Angeles…)

Bell's director of administrative services testified Monday that she did not realize until the city's salary scandal erupted last summer that city officials could be breaking the law by lending $1.9 million in public funds to colleagues, municipal workers and a local car dealer.

Lourdes Garcia, who was given limited immunity in exchange for her testimony, said former City Administrator Robert Rizzo directed her to draft loan agreements for city employees using only their vacation and sick days as collateral.

Among the loans Garcia said she wrote were two for herself totaling $177,500. She said Rizzo pressed her to take the money.

"I was in Mr. Rizzo's office and he told me I needed to cash out my vacation because the balance was too much," she testified. "He told me I needed to start thinking about taking another loan. I said I don't really need the money now, but I could always take it."

Garcia's testimony comes in the second of three preliminary hearings that will decide whether ranking Bell leaders must stand trial for alleged public corruption. Six current and former council members already have been ordered to stand trial for alleged misappropriation of public funds.

In the current hearing, Rizzo and his former assistant, Angela Spaccia, are accused of writing their own employee contracts without council approval. Spaccia, former Councilman Luis Artiga and Mayor Oscar Hernandez are charged with accepting city loans.

Artiga said he used one of the $20,000 loans to adopt a 2-year-old girl from Tijuana.

Hernandez received a $20,000 loan, while Spaccia received loans totaling at least $230,000, one of which she used to buy a home.

Rizzo's attorney, James Spertus, said the process was legitimized not only by then-City Atty. Edward Lee, who created the template for the loan agreement, but also by the multiple ranking police officers who accepted them.

Spertus said the loans were legal, fully collateralized, did not cost the city money and were used for homes, continuing education or family financial reasons — not "to go to Vegas."

"This was a very open, transparent process," Spertus said.

During cross-examination, Spertus accused Garcia of minimizing her role at City Hall while maximizing Rizzo's in her testimony.

"I'm not trying to minimize anything," Garcia replied. "I'm just trying to answer what I know."

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