26 Dec Councilman Used Cocaine With Contractor

This 1998 piece was one of many stories that another reporter and I produced as part of a two-year series of articles investigating alleged corruption by former L.A. Councilman Richard Alatorre. We reported how he engaged in alleged bank fraud, showed up with wads of $100 bills after meeting with businessmen in his district and, in this piece, how he used cocaine with a contractor he supported for taxpayer-funded work. Alatorre later tested positive for cocaine in an unrelated child-custody case and was convicted in federal court for failing to declare income. The federal probe was sparked by our stories.

Los Angeles Times 
Wednesday June 3, 1998
Alatorre Accused of Using Drugs With City Contractor

Officials: Councilman allegedly steered government work toward businessman. Both have denied wrongdoing.

By ROBERT J. LOPEZ and RICH CONNELL, TIMES STAFF WRITERS

Los Angeles City Councilman Richard Alatorre repeatedly used cocaine with a friend and convicted narcotics offender while aggressively helping him obtain government business, according to allegations contained in court documents and supported by interviews.

Alatorre’s ties to Julian G. Carrasco date back more than 20 years, when the waste hauler and demolition specialist pleaded guilty to possessing and intending to distribute heroin. More recently, the lives of the two men have been entwined in ways that have prompted questions of propriety by government officials and business associates involved in their dealings.

Among other things, documents and interviews disclose that Alatorre wielded his influence in the early and mid-1990s to help Carrasco obtain government contracts, at least twice over the objections of civil servants who believed that public money was being jeopardized.

This occurred at a time when the councilman was regularly showing up at Carrasco’s office in Vernon, where the men allegedly shared cocaine on the contractor’s glass desktop. In addition, the company’s former controller says Carrasco directed him to write a $2,000 corporate check to the councilman but he balked, prompting his boss to instead withdraw cash from a personal account. The controller says he does not know where that money ended up.

Alatorre, through a spokesperson on Tuesday, refused to comment on any aspect of his relationship with Carrasco. In the past, he has issued general denials of any misconduct in his personal or public life.

Carrasco, for his part, flatly disputed the allegations, saying in an interview Tuesday that cocaine “has been out of my life for a long time” and that he has never used the drug “with anyone other than myself.” He said he has no knowledge of whether Alatorre has used drugs.

Carrasco said he and the councilman have been “longtime, loyal friends” but that he did not exploit the relationship for financial gain. He said each of his many government contracts was awarded on merit alone.

Carrasco blamed unhappy former employees for the accusations leveled against him and Alatorre, a man he calls “a peoples’ politician.”

“Everyone has employees that for whatever reasons . . . will say whatever comes to their minds,” he said.

The latest questions swirling around Alatorre come from disparate sources–ranging from records in unconnected court cases to interviews with disaffected former Carrasco employees and front-line public workers.

Taken together, they also appear to bolster accounts by a woman who came forward earlier this year with similar allegations–Alatorre’s former executive secretary.

In recent court documents, she accused the councilman of abusing cocaine and showing up at City Hall with wads of $100 bills after meetings with supporters, up to the time she left in 1995.

Linda M. Ward’s sworn statement, lodged in a bitter custody case involving the Alatorres’ niece, has been disparaged by the councilman as lies by a vindictive ex-girlfriend and disgruntled former employee.

Alatorre has told reporters that the white powder she claims to have seen on his nostrils and clothes might have been dandruff, denture powder or Doritos. The councilman also has insisted that he has not abused any substance since undergoing treatment for alcoholism 10 years ago.

Some of those new accusations have emerged in the custody battle, which has been transformed into an assault on Alatorre’s parental fitness. The Superior Court action was brought by longtime political rival Henry Lozano, who is seeking custody of his 9-year-old daughter, now living with the Alatorres.

Like Ward, Carrasco’s former secretary alleged in a sworn statement filed in the custody case that the councilman abused drugs–an open secret, she said, among the firm’s employees. “It was well known throughout the office staff that the councilman’s visits were for cocaine,” Beverly Vasquez-Bumgardner said.

One of those in the know was the ex-foreman of Carrasco’s now-defunct JCI Environmental Services.
In a signed declaration provided to The Times, Donald Benefield said he witnessed Alatorre preparing or using cocaine with Carrasco about half a dozen times during a several-year period ending in 1995, when the business shut down.

Benefield recalled one Saturday when Carrasco left his office door open. He said he saw Alatorre hunched over, inhaling one of several neatly aligned rows of white powder through a small tube.

“He sniffed it up at the glass desk, right there,” Benefield said in an interview.

Last year, the relationship between the contractor and the councilman became part of an FBI investigation into whether Carrasco’s JCI was improperly dumping hazardous waste. Three former JCI employees told The Times that federal agents asked them whether their boss was supplying drugs and money to Alatorre.

Carrasco said he had no knowledge of the investigation, in which no charges have been filed. It is unclear what, if any, information gathered in that investigation is being cycled into a current federal corruption probe of Alatorre.

Among other things, Alatorre, who also is a board member of the Metropolitan Transportation Authority, is under investigation by the FBI and Internal Revenue Service for allegedly receiving cash from people with government business and for obtaining help in the purchase and remodeling of his Eagle Rock home–including the falsification of financial records and the financing of a $12,000 tile roof by a prominent government contractor.

Long Relationship With Businessman

Carrasco, 55, was an enterprising businessman who favored a lavish lifestyle. He wore a gold pinkie ring with a diamond in the middle and had a penchant for expensive cars. He also had a grand business vision: to join the ranks of Los Angeles’ giant public works contractors.

To boost his big-league image and highlight his Mexican heritage, Carrasco’s JCI sponsored an award-winning float in the 1995 Rose Parade. The creation, featuring huge Aztec handball players, was promoted in a glossy company brochure picturing Carrasco with Alatorre.

But even as he was striving for recognition, Carrasco’s finances were unraveling. In the spring of 1995, JCI filed for bankruptcy protection, leaving employees unpaid and creditors in line. One of them: the builder of his heralded float.
Carrasco said he is now a partner in a local manufacturing company and does various kinds of consulting work.

Alatorre’s relationship with Carrasco extends at least to the lawmaker’s early years in the Assembly, in the mid-1970s.
Carrasco has said Alatorre has written him letters of reference for public contracts, attesting “to my character.”

Their relationship also predates Carrasco’s 1977 arrest for allegedly arranging the sale of a kilogram of heroin to a federal agent in the El Monte area, according to federal court records. Prosecutors alleged that he was part of a conspiracy to distribute heroin in Southern California.

He pleaded guilty to a single count of possession with intent to distribute the drug, and was sentenced to two years in federal prison.

After his release, Carrasco returned to the waste hauling and demolition business he had begun in the late 1960s. But he had not left his drug days behind, according to former employees.

“Mr. Carrasco was not discreet about his use of cocaine in the office during my tenure,” the businessman’s former secretary, Vasquez-Bumgardner, said in court records. “He was clearly addicted, and his nose required reconstructive surgery on several occasions due to his overuse of cocaine.”

During this time, Vasquez-Bumgardner and other former JCI employees said, Alatorre’s was a familiar face around the office, located in an industrial area beyond the councilman’s Eastside district. He dropped by on workdays and on weekends, they said, staying anywhere from five minutes to an hour.

Vasquez-Bumgardner also said her boss “bragged” about his relationship with the councilman–and the benefits that accrued to both of them. Carrasco openly implied that Alatorre helped him obtain government business because he supplied the lawmaker with drugs, she said in the custody case document.

“Councilman Alatorre will do whatever I tell him, because he needs me,” the secretary quoted Carrasco as saying–a statement Carrasco denies making.

On “many occasions,” Vasquez-Bumgardner said in her court statement, she could hear Alatorre and Carrasco snorting cocaine. She described a morning in 1994 when Alatorre walked out of Carrasco’s office after a “snorting session” with cocaine “around his nostrils and all over his pants.”

“I said, ‘Richard, you have powder on your pants!’ He said, ‘Thanks, Beverly,’ and proceeded to wipe himself down.”
Standing nearby was the firm’s foreman.

“It looked like somebody had been eating a white doughnut,” recalled Benefield who, like other employees, said he is angry with Carrasco for failing to pay him thousands of dollars in salary when the firm went under.

The councilman’s visits became more frequent in the couple of years before JCI’s 1995 closure, Benefield said.

“I’d just see them in there, getting their drugs together,” he said. “It was a common thing between two buddies.”

Another former JCI employee, who requested anonymity, said it was hard to forget some of Alatorre’s visits. One weekend morning in the summer of 1994, he said, the councilman arrived “stumbling, smelling like alcohol.” After about an hour in Carrasco’s office, the councilman emerged “completely re-energized.”

“You could see the powder in his nose,” the worker said.

Both Carrasco and Alatorre were questioned about their relationship and visits in depositions taken in 1994 during a sexual harassment suit filed by Carrasco’s secretary, Vasquez-Bumgardner. Neither of the men, however, was asked about drugs.

Carrasco testified that Alatorre would visit in “spurts”–sometimes up to three times a week–to discuss his political ambitions and ways they could improve the community.

Alatorre, in his deposition, said he could not remember exactly why he paid calls to Carrasco or how often. “I visit a lot of people,” he said. “I may have visited, stopped by and bullshit with the guy.”

Alatorre’s visits, according to JCI’s former controller, were often accompanied by another ritual: requests by Carrasco for money from the firm.

Financial officer Andrew Lee told The Times that he was instructed by Carrasco in 1992 to write Alatorre a company check for approximately $2,000.

As Alatorre waited in Carrasco’s office, Lee said he told his boss it would be improper to put corporate funds in a politician’s pocket.

“He wouldn’t give a reason what it was for,” said Lee, now an accountant for the MTA. “He just said, ‘I owe him some money.’ ”

Lee said he was then told to prepare a check–payable to cash–from Carrasco’s personal account. After doing so,

Lee said, his involvement ended and he is uncertain where the money went.

More often, Lee said, his boss would ask him to dip into the company’s petty cash before or during Alatorre’s visits, withdrawing between $100 and $200 each time. He said the two men would then sometimes leave in the councilman’s car and return a short time later.

Carrasco disputes Lee’s account, saying he never provided the councilman with any money and never requested that cash be made available before or during his visits.

“Of course not,” he said.

Connections to Contracts

Whatever the attraction between the men, Alatorre repeatedly used his considerable political influence to help his friend obtain more than $2 million in local government contracts.

The lawmaker acknowledged in his 1994 deposition that Carrasco often sought his advice and help. “He’s had a lot of business problems,” Alatorre said.

One was at the city’s Department of Water and Power.

Carrasco’s firm had won a 1993 bid to demolish an old DWP service center east of downtown for a fee of $443,000.

But a conflict erupted: Warner Bros. wanted to blow up the building for a Sylvester Stallone film, “Demolition Man.”
Because the job requirements had changed, DWP staffers urged that Carrasco’s contract be terminated and that the job be rebid after the movie makers had finished, when the exact nature of the work would be more clear.

With that looming prospect, Alatorre personally intervened with then-DWP General Manager Daniel Waters, according to a source knowledgeable about the events. Soon after, Waters overruled his staff and allowed Carrasco’s contract to proceed as negotiated, the source said, adding: “You know, Councilman Alatorre is pretty powerful. . . . [Waters]
understood the reality of it.”

Waters acknowledged in an interview that he probably discussed the contract with Alatorre but said he could recall no specifics. He said that whatever actions he took were in the utility’s best interest.

Carrasco agrees. He credits Alatorre with helping to ensure that the lowest and best bid won the day.
“He did the right thing,” Carrasco said of the councilman. “I just told him what was going on. . . . All he did was relay the information that I told him.”

As it turned out, Carrasco would try to obtain even more money from the city after Warner Bros. had demolished some of the building–and before he had even started his own work.

As DWP staffers had feared, the Carrasco contract had left an opening for confusion and bickering. Carrasco informed the department that he wanted an extra $154,000 because the work had been made more difficult by the studio’s partial demolition of the structure–acontention the city disputed.

Warner Bros., which had agreed to cover any additional costs incurred by the city, wrote the agency, warning that Carrasco was trying “to ‘take’ the DWP for all he can.”

Although still battling for more money, Carrasco began the job–one in which Alatorre seemed to take an extraordinary interest.

The DWP manager overseeing Carrasco’s work, Jeri Ardalan, said Alatorre’s personal involvement was more than he had ever witnessed by a council member on a construction matter.

“On a contract like that, when the general manager and . . . Alatorre and everybody are involved, you feel the pressure,” he said.

Among other things, Alatorre showed up at the job site with Carrasco and convened a meeting with DWP executives and staff in his City Hall office to review lingering contract issues.

In the midst of the payment disputes, Carrasco faxed a letter to the DWP general manager seeking a $139,000 payment. The cover sheet noted that it was sent “per Councilman Richard Alatorre.”

Given the problems Carrasco was generating, DWP officials again began debating whether to terminate Carrasco’s agreement and rid themselves of a “troublesome and nonresponsive contractor,” according to internal DWP records.

But, as one DWP memo warned, doing so would mean “Alatorre and hence (General Manager) Waters will probably be upset.” Instead, they decided to let the contract move forward, an action ensuring that “Alatorre and hence Waters is happy.”

Carrasco’s demands for money did not end with the building’s destruction. He sued the DWP for $350,000 beyond the amount of the original contract, alleging that the city had required him to perform extra work and had discriminated against him because of his Latino heritage.

As city lawyers prepared for trial, questions about Carrasco’s “erratic behavior” and possible drug use arose. The deputy city attorney handling the case prodded Carrasco’s former partner to state “whether or not you thought [Carrasco] was using drugs or something.” The ex-partner avoided a direct response, saying: “I don’t want to be any part of that.”

The city’s attorney declined to say what led him to pursue that line of inquiry.
Eventually, the DWP settled, paying $40,000 to Carrasco’s firm, which also received $80,000 from Warner Bros.

During Alatorre’s 1994 deposition in the sexual harassment suit, the councilman said he could remember helping Carrasco’s firm only one time with the DWP. On that occasion, he said, he tried to expedite a payment the firm was owed.

Asked whether he contacted the DWP management in that effort, Alatorre responded: “I’m sure I did, yeah. I don’t know. I don’t recall at this time.”

Dispute Over Transit Business

Alatorre also provided Carrasco with help on another front–JCI’s efforts to obtain a piece of the region’s lucrative transit business, according to documents and interviews with key players.
In late 1991, while the councilman sat on the board of the now-defunct Rapid Transit District, JCI was one of several firms seeking a $2-million contract to clean up hazardous waste. The problem was that RTD staff had rejected

Carrasco’s bid, partly because his price was too high and he had failed to provide required information.
“He was validly shot down,” said Frank Hanok, then the RTD’s assistant director of procurement.

A staff report recommending another firm was sent to the RTD board for approval. But at Alatorre’s insistence, the board rejected the staff opinion, allowing Carrasco to file another bid–a move that Hanok said smacked of improper political tampering.

“Alatorre killed it, sent it back and made sure it went to JCI,” Hanok said of the contract.

Carrasco, in his interview with The Times, said he could not remember anything about the matter.

Carrasco himself has said that Alatorre, while preparing to become the MTA’s first chairman, helped him navigate the bureaucracy on another transit contract.

In late 1992, Carrasco had filed a formal protest after his firm was rejected for a multimillion-dollar waste hauling job, records show. Transit officials had ruled that JCI lacked management and technical expertise.

So he again turned to Alatorre’s office, according to testimony Carrasco gave in the 1994 harassment lawsuit filed against him by his secretary.

Although the contractor’s protest ultimately was denied, he testified that Alatorre used an aide to gather details on competitors’ bids for Carrasco.

Carrasco said in an interview Tuesday that he now has no recollection of the contract, but stressed that any information he may have received on his competitors was publicly available.

The secret of his success, Carrasco said, was to perform admirably and come in with the lowest bids.

“That’s the only way I got any contracts.”

Times researcher Janet Lundblad contributed to this report.