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Report: Millions Paid To Firms Linked To Families Of Vernon Officials

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(AP/FILE)

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LOS ANGELES (CBS) — A scathing report on Friday alleged that the city of Vernon has paid millions of dollars in the past decade to private firms connected to relatives of top city officials.

The Los Angeles Times reported that the city — already under fire for oversized salaries earned by some leaders — has employed at least a dozen family members of city officials, either directly at City Hall or through companies that have done business with the city.

The most prominent cases involved the families of three former administrators: Bruce Malkenhorst, Eric Fresch and Donal O’Callaghan, who together had seven relatives working for one of the contractors.

Details of the hirings are contained in thousands of pages of city financial records obtained by The Times from Vernon under the California Public Records Act.

The state Legislature is debating whether to disband the industrial city with a population of less than 100, which has been mired in allegations of corruption.

Many of the family members were hired by Project Labor Group, a private company created in 2003 to provide engineering, security and administrative services at the city’s power plant.

When the firm was established, Malkenhorst was Vernon’s city administrator and Fresch its city attorney. O’Callaghan became head of the city’s Light and Power Department two years later.

Critics have long argued that Vernon is governed like a fiefdom for the benefit of a small group of leaders who earn large salaries. The city owns nearly all the homes within its borders, essentially making the City Council the landlord for voters.

The Times reported last winter that more than a dozen friends and family members of top Vernon officials lived in city-owned residences at below-market rates, including four nephews of new City Administrator Mark Whitworth.

The politically-connected tenants paid rents ranging from $136 to $472 a month, far below the average market value for the region.

One of the reforms the City Council approved recently called for an advisory commission to take over management of the city’s housing.

John Van de Kamp, the former state attorney general hired by Vernon in February to perform an ethics review of the municipal government, said he was not aware of Project Labor Group, but he would consider recommending a new anti-nepotism policy to prevent city officials from directly hiring relatives.

Van de Kamp said he is pleased with the city’s recent efforts to enact reforms, including slashing salaries and imposing term limits, but believes other policies are also needed to make the city more open. He plans to submit his report to the City Council next month.

(©2011 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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