Doug Thorburn, addiction expert, addiction contrarian and author of the recently released Alcoholism: Myths and Realities: Removing the Stigma of Society's Most Destructive Disease, published his August 2010 Thorburn Addiction Report with a Top Story of the Month that delves into the City of Bell and the looting of the municipal treasury by Robert Rizzo and his comrades. Having authorized his own salary of $800,000 a year, Rizzo also approved upwards of $8,000 a month in extra expense funds to cover all his activities. Unbeknownst to the citizens, their treasury was paying the chief of Police $500,000 annually and part-time Council members over $100,0000 a year.
A full blown revolution has swept these overpaid thieves out of office, but that will prevent 143 small cities having to pay their huge pensions for life. This gift from the CALPERs pension system is only part of the state wide looting of California taxpayers by the powerful state employee unions; from top to bottom this pervasive problem is eating away at the foundation of the economy of a once great state.
Below is the Top Story of the Month from the Thorburn Addiction Report:
Governing Under the Influence: the City of Bell and its Grotesque(ly Overpaid) City Manager, Robert Rizzo In a classic 1987 article entitled "Governing under the influence; Washington alcoholics: their aides protect them, the media shields them," Steven Waldman wrote what was, for the time, not only a tell-all on Washington, DC alcoholism but also one of the most insightful and perceptive exposés ever written on the subject. Among the gems: "Reporters usually fail to cover the drinking problems in Washington officials….'I knew several alcoholics,' says Richard Bolling, former chairman of the House Rules Committee and a recovering alcoholic, 'and they all were in important positions.'"
He identified a number of former congressmen as alcoholics, including Representatives Wilbur Mills (chairman of the powerful tax-writing House Ways and Means Committee), Hale Boggs (majority leader), Carl Albert (Speaker of the House) and L. Mendel Rivers (chairman of the Armed Services Committee), along with Senators Herman Talmadge (chairman of the Agriculture Committee), Russell Long (chairman of the Finance Committee) and Estes Kefauver, who was Adlai Stevenson's running mate for President in 1956. Waldman accurately observed, "The more important a public official is, the less likely he will be forced to confront his problem drinking."
This is another way of saying what Marianne E. Brickley, recovering alcoholic and ex-wife of Michigan's GOP Lt. Gov. James Brickley, said: "the higher the person's social status the more that person is protected by others." I would expound further: the higher the social, business, financial or political status of the addict, the more enablers have to lose if the secret leaks out because enablers have their own positions of power, prestige, income and wealth tied to the alcoholic. Waldman explained that "A key part of a staff member's job is to cover up for the weaknesses of his boss. That's as true for the senile congressman as it is for the alcoholic; the difference is that a senile congressman will not become more senile because of staff help."
You may wonder what all this has to do with Robert Rizzo, but stay with me. The problem of enabling often occurs because the enablers are themselves alcoholics. Waldman wrote this was particularly true of journalists during the 1960 presidential campaign. He cited journalist David Broder as recalling that "if one journalist was too smashed to file [a report], another reporter would cover for him…." Waldman explained, "Journalists, in turn, ignored the 'private foibles' of the candidates" creating, as Broder put it, "a cozy, comfortable arrangement all around." Adding to the multiple reasons for pervasive enabling surrounding politicians, Waldman observed that "the reporters who are most likely to know if a congressman drinks too much are the ones who can least afford to alienate him."
Waldman cites staffers who claimed that "heavy drinking" had not noticeably affected the work of several politicians. While it may not appear that way to the uninitiated, a closer examination may find instances of manipulation or other power-seeking behaviors that seem "normal" in the lives of politicians. Waldman astutely points out that "alcohol[ism] may be impairing abilities and performance in subtle but important ways without causing a blatant failure to discharge 'public responsibilities.'" In one of the most insightful comments ever by a journalist, Waldman suggests that "heavy, regular drinking should be reported—even if it never occurs during session and even if there's not definitive proof that it affects job performance." He would probably agree with me: of course it does.
As mentioned in one of the many clues to alcoholism listed in Drunks, Drugs & Debits: How to Recognize Addicts and Avoid Financial Abuse (page 128), one of the implications in Waldman's article is alcoholics often hang out with other alcoholics. Just as addicted children seek out other addict kids, alcoholic adults often look for other alcoholics who they can control and who may "look worse off or use more addictively than themselves and serve as a sort of cover for their own use."
As a result, a "culture" of alcoholism may result. This could explain much that goes on in the halls of legislatures at all levels of government. It probably explains the city of Bell, California, which was, as we will see, manipulated into grossly overpaying a number of its top officials. Keep in mind that recovering alcoholics admit that when they use they excel at lying, cheating, stealing and manipulating for personal benefit and they do whatever it takes to inflate their egos by wielding power, which often manifests in financial abuse of others, including taxpayers.
The history of the salary of Bell's City Manager Robert Rizzo, who is likely the highest paid city manager in the country weighing in at $787,637—with annual 12 percent pay raises—is suggestive of the sort of gross manipulation of rules usually rooted in alcoholism. It began with corruption in a nearby city also consisting largely of immigrants, South Gate, when its treasurer, Albert Robles, engineered a recall in 2000 that won him a majority of allies on that town's city council. "South Gate" soon became synonymous with flamboyance, corruption and, as The Los Angeles Times journalist Hector Becerra aptly put it, "politicians gone wild."
Robles and his cronies gave themselves exorbitant pay raises, retaliated against any and all critics and almost forced the city into bankruptcy. Three years later, outraged city residents ousted Robles. A year later, after having been "accused of threatening to kill political opponents while exuding bravado and charm during his tenure" (see the December 2004 TAR), Robles was charged with plundering $12 million over five years from the city, the entire annual budget of which is only $28 million. He was convicted of corruption and sentenced to 10 years in 2005.
One of the council members who helped the beleaguered citizens of South Gate was Hector De La Torre, who went on to become an assemblyman in Sacramento, where he pushed for laws to help keep municipal governments honest. One of these was a law that limited compensation for part-time city council members of a city the size of Bell (population 38,000) to $400 per month or $4,800 per year, with another $150 per month for each board and commission members serve on. It took only three months for the Bell city council to figure out a way to circumvent the law: such limitations on payments for sitting on boards and commissions don't apply to "charter" cities, a status the Bell city council found a way to opt into. All they had to do was hold an election in which a majority voted for charter city status.
The special election the city council called must qualify as one of the best kept secrets ever. The measure passed 336 to 54, with roughly 4% of registered voters casting a ballot, mostly absentee. Obviously, most residents in Bell knew nothing about the election, including a woman who told reporters she has "a master's in public administration and a bachelor's in urban planning."
Some council members insist the measure was not motivated by a desire to increase salaries, but couldn't cite any other reasons to become a charter city. Surely, then, it's a coincidence that four of the five council members now earn over $100,000 per year for part time work—mostly by showing up for board or commission meetings, which are often adjourned after about a minute or two. As De La Torre understatedly put it, "The timing of [the special election] is clearly circumspect." Adding to the breathtaking hubris, the city council approved a resolution in 2008 mandating that only council members could serve as commissioners on boards.
Now, I wouldn't want to accuse the city council of committing a quid pro quo crime, but let's take a look at the odds. They are paid ten to twenty times what they could earn on just about any other city council in the country for the work they do. They agreed to pay Assistant City Manager Angela Spaccia $376,288 per year, or some 70% more than Los Angeles's Antonio Villaraigosa makes as mayor of a city of 3.8 million.
They also brought in Glendale, California's police chief and more than doubled his salary to $457,000 per year, which is 50% more than Los Angeles' Police Chief Charlie Beck earns. All this in a city in which the median household income is almost one-third less than that of the rest of Los Angeles County and where special and direct assessments levied on property owners by its municipality are almost 3.5 times the countywide average and double the level of just four years ago, which results in an overall property tax that's about a third higher in Bell than for the average same-price home in L.A. County.*
What might have precipitated this culture of apparent corruption and grandiose spending? Fortunately, while journalists usually won't out politicians, an occasional and luckily-timed DUI sometimes does. Robert Rizzo, 56, was arrested in March 2010 with a blood alcohol level (BAL) of .28 percent after crashing into a mailbox (his Jabba-style mug shot is here; oh, ok, some might think Soprano-style).
There are few if any instances of a non-alcoholic, especially a 56-year-old, drinking to a level that is more than three times the legal per se driving limit and still able to stand on two feet, much less being able to navigate the controls on a motor vehicle. In other words, we really can't get any closer to 100% odds of alcoholism without the addict admitting to his disease, which usually occurs only after several months of recovery. Where there's one alcoholic in what appears to be an instance of corruption, there usually are others.
Because alcoholics are the world's most convincing salesmen, crime, corruption and unethical behaviors do not require alcoholism in everyone involved. Alcoholics frequently talk others into committing behaviors they wouldn't normally commit. However, with at least eight people involved in what appears to be blatant corruption, the odds are there is more than just one alcoholic, including at least one or more sitting city council members. In other words, we might surmise that Robert Rizzo's alcoholism is just the tip of the ice cube.
I may write more on a related topic, pensions, in an upcoming Wealth Creation Strategies, my client newsletter available at www.dougthorburn.com. Unfortunately Mr. Rizzo will be eligible for a $600,000 + yearly inflation-adjusted pension; fortunately, since he's an alcoholic and appears in pictures almost as wide as he is tall, taxpayers might not be on the hook for as long as actuarial tables suggest. Still, you and I would have to have an estimated $12 million in our IRAs and 401k's to guarantee a pension this outsized in the form of a single-life annuity and probably close to $16 million to purchase one that increases with inflation.
Rizzo at one point justified his salary, claiming he could earn as much in the private sector. How many real people make $800,000 per year and then retire with a mega-million dollar IRA? The people who set up a system allowing this sort of absurd payout were not thinking straight—in fact they, along with the City Council of Bell, may also have suffered from grandiosity and confabulated thinking, which is far more likely a result of longstanding alcoholism than from all other causes combined. Both the alleged crime and its aftermath, then, are likely the financially tragic results of alcoholism for which the residents of Bell and the citizens of California will unjustly pay the consequences for what could be decades.
*The general property tax rate is 1% of value. The average direct and special property tax assessment rate in L.A. County is .16%, while Bell's rate is .55%, or almost 3.5 times greater. However, Bell's overall combined rate of 1.55% is not quite one-third greater than the 1.16% median combined rate for L.A. County.
Thorburn Addiction Report Archives
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