March 1, 2004 Mayor, towing company relationship questioned HAWTHORNE: Records show mayor and family along with councilman obtained vehicles from
owner who faces charges. By Ian Gregor, Daily Breeze Hawthorne Mayor Larry Guidi, his family members and a co-worker he helped get elected to the
City Council repeatedly obtained cars and motorcycles -- some apparently at below-market prices -- from the city's police towing company, whose owner faces criminal charges stemming from how he
sold such vehicles, records and interviews show. Guidi, his wife, two of his four daughters, his nephew and Councilman Louis Velez acquired at least
10 vehicles from S&W Towing, according to California Department of Motor Vehicles records, interviews with the parties involved and statements from former S&W employees. Velez works with
Guidi at the Hawthorne School District and has publicly credited the mayor with helping him get elected last fall. Three former S&W workers told the Daily Breeze
that Guidi visited the company yard regularly -- up to three or four times a week -- and often was accompanied by Velez. One of the workers,
Jasmine Arias, said she told Hawthorne police investigators that S&W operations manager Ernest Jenkins used the term "hookup" to describe the transfer of one of the cars to Guidi.
"I said, 'Why does (Guidi) get hooked up?' " said Arias, 23, who worked as a dispatcher for S&W from January to June 2002. "Ernest said, 'Because he votes on our contracts.' "
Arias said police warned her before she gave her statement that she could face criminal charges if she lied to them. Guidi voted on an S&W issue twice in recent years, according to City Council
meeting records. In February 1997, he voted to award the company a new, five-year contract. And in June 2000, he voted for an amendment that increased S&W's towing and storage fees and extended the contract to 2010.
Penalties spelled out Under the California Government Code, elected officials who vote on issues in which they have a
financial interest can face penalties ranging from fines to felony prosecution. Benefits to a spouse constitute financial interest, according to California case law, but it's unclear how the statute applies to children.
California lawmakers who fail to report gifts or financial interests on their annual economic disclosure forms face fines of up to $5,000 for each violation under the California Political Reform
Act of 1974. The fines are levied by the Fair Political Practices Commission. Guidi did not report any gifts or benefits from S&W on economic disclosure forms he filed from
1997 to 2003 with the Hawthorne City Clerk's Office. Arias also said she told Hawthorne police during her interview that on one occasion Guidi and a man she later identified to the Daily Breeze
as Velez arrived at S&W in an older model white pickup truck and, with the help of a company worker, loaded the truck bed with goods that had been
removed from impounded vehicles and drove away. She said she did not know what happened to the goods, which included car speaker boxes and stereos.
Guidi, who is in his sixth two-year term as mayor, refused repeated requests to comment for this article. Velez joined the council in November 2003 and has not voted on an issue affecting S&W. He
denied Arias' statements about him, Guidi and the white pickup truck. "That's an absolute lie," Velez said. "Whether Larry did it or not, you have to ask him."
Velez also said he visited S&W only about once a month and rarely with Guidi. He said he doesn't believe his relationship with Guidi helped him acquire cars from S&W, saying he first met company
owner John Germain at a Kiwanis Club meeting that he attended with the mayor. He disputed suggestions that he bought at least one of the vehicles at below-market price, saying
they all needed mechanical work when he got them. "I didn't buy anything from there where you'd say, 'Whoa, what a great deal he got,' " Velez said.
Guidi's nephew, John Dragone, is not a public official. He did not return a telephone call seeking comment for this article.
Numerous law enforcement and regulatory agencies raided S&W's Kornblum Avenue yard on Nov. 4 as part of a lengthy and wide-ranging fraud investigation. Germain, whose company has served as
Hawthorne's exclusive towing company for more than two decades, was arrested two months later and charged with 53 felony counts, including embezzlement of public funds, auto theft, grand theft
of personal property, extortion and subornation of perjury. The legal case against Germain focuses partly on his failure to conduct required public auctions of vehicles with impound liens on them, court records show. Germain, who donates thousands of dollars a year to community organizations and youth sports in Hawthorne, pleaded not guilty to all charges and steadfastly denied the allegations against him in
interviews with the Daily Breeze before his arrest. He said his attorney advised him not to comment for this article. "We've done nothing wrong and we expect total vindication," Germain said.
The day after the raid on S&W, then-interim City Manager Charles D. Herbertson issued a memo barring all city employees and their immediate families from contacting or doing business with the tow company.
"The appearance of a conflict (of interest) is oftentimes as harmful as the conflict itself in terms of adversely impacting public confidence," Herbertson wrote.
He stated in his memo that he anticipated that the City Attorney's Office would draft a new municipal law banning dealings between Hawthorne employees and the city's towing company. Four
months later, no such ordinance has been drafted, according to the City Attorney's Office. Unlike many other city businesses, S&W officials made miniscule campaign contributions to Guidi --
a total of just $400 -- during the past seven years, the mayor's campaign finance reports show. But records and interviews suggest a close relationship existed among Guidi, his family and friends, and S&W.
Public records show that: Guidi's nephew, Dragone, bought a 1993 four-door Honda from Germain in April 1999, and
transferred title to Guidi's wife, Marilyn, in November 2000. The car also is registered to Guidi's daughter, Gabriela.
The Guidis paid $1,800 for the car, which had 100,536 miles on it. Such a vehicle was worth $6,025 wholesale, or $10,100 retail, assuming it was clean and in reasonably good condition, according to the 2000
Kelley Blue Book , a widely recognized car value guide. Another of Guidi's daughters, Michelle, paid S&W $5,000 in December 1999 for a 1991 four-door
Honda Accord with 139,467 miles on it. A car of that make and mileage that was in reasonably good condition was worth $4,596 wholesale, or $8,075 retail, in 1999, according to the Blue Book .
Dragone bought a 1991 Suzuki Katana motorcycle in March 1999 from former Guidi co-worker Craig Courtney, who had acquired the bike two years earlier from S&W and registered it as
"nonoperable." Courtney worked with Guidi in the 1990s at a Carson freight-shipping business called Keihan America.
Dragone paid $250 for the motorcycle, which Courtney also had bought for $250. The motorcycle had a wholesale Blue Book value of $1,950 or $2,740, depending on the engine size, and a retail
value of $2,595 or $3,645. DMV records did not show the engine size. Velez bought a 1979 Ford Bronco from S&W in January 2002 for $350. The 2002 Blue Book
states that a 1979 Bronco in poor condition is worth $1,475. Such a vehicle in fair condition is worth $3,600, and one in excellent shape, $6,650.
The exact market value of these vehicles is impossible to determine because their condition at the time of purchase is unknown.
Velez said he spent $7,000 restoring the Bronco and that it was inoperable when he bought it. He referred a reporter to a Web site, www.projectbronco.com , to view his restored vehicle.
"To say I got something under market, that's a little inaccurate," Velez said. The Web site write-up on Velez's Bronco suggests otherwise.
It says he got the car from a "friend" who owns a tow yard, and describes the Bronco as "a little
rough around the edges." It further states that the $350 purchase price was something Velez "just couldn't beat."
"Man, what a steal!" the posting says of Velez's purchase. "You know how it goes, he bought a carb & intake and got a free Bronco to go with it!" Purchases acknowledged
Velez acknowledged that he bought three other vehicles from S&W -- a 1989 Kawasaki ES500 motorcycle, a 1991 Yamaha Seca motorcycle, and a 1989 Honda Accord.
Velez said he paid somebody to restore the Kawasaki and ended up selling it for about the original $300 purchase price. The Yamaha had broken fairings when he bought it, and he fixed the
motorcycle himself, he said. He had the Accord painted, and the car also needed a valve job, he said, adding that he used the car himself.
Two former S&W employees said they had firsthand knowledge of Guidi acquiring cars other than those that turned up on Daily Breeze DMV searches.
Arias, the former S&W dispatcher, said she remembers transferring to Guidi the title of a white, mid-1980s Chevrolet Camaro -- the car that she said Jenkins, the S&W operations manager,
described as a "hookup." Jenkins told her that one of Guidi's daughters liked the car and wanted to put chrome wheel rims on
it, Arias said. She said she remembers joking with Jenkins that the rims were popular among gang members. "I joked that she was trying to keep it gangster," Arias said.
Guidi sat in Germain's office directly behind her while she processed the title transfer in a computer, Arias said. "I never saw or heard money change hands," Arias said.
She said she recalled Guidi on a different occasion getting another car-- an older-model Honda Accord. Arias said that following the transfer of that car to Guidi, she overheard Jenkins tell another
employee, "You know how it goes -- he votes on our contract." Arias said she quit S&W after she was improperly accused of stealing. She subsequently was hired
at Torrance-based Van Lingen Towing. Robert Van Lingen, the company's vice president and general manager, said he would not hire anybody he believed had been fired for theft. The
background check his company conducted on Arias during the hiring process came back clean, he said. Another former S&W employee, who worked for the towing company for several years and asked
not to be identified, said she, too, recalled transferring to Guidi a car that did not turn up on a Daily Breeze DMV records search.
The woman said that sometime in 2001 she sold Guidi a gold, two-door 1999 or 2000 Dodge Intrepid. She said she didn't remember the sale price but remembered the sale because she wanted to buy the Intrepid herself.
"It was pre-set up for (Guidi) to have it," the woman said. "A family member of mine wanted to get it and it was gone. That was a nice one."
Jenkins told her Guidi bought it for one of his daughters, she said. Arias said she recalled the woman telling her that she wanted to buy the Intrepid for herself. Although DMV records obtained by the
Daily Breeze do not show a Camaro or Intrepid registered to Guidi or his relatives, state law limits news media to obtaining information on specific vehicles
registered to specific people at specific addresses. News outlets cannot access information on cars that somebody owned but later sold, or on vehicles that somebody registered at an address unknown to the news agency.
Such information, however, is available to law enforcement agencies. Like Arias, the other former S&W employee said she told Hawthorne police investigators everything
she knows about the transactions between S&W and Guidi, his relatives and Velez. Hawthorne police declined to say whether they are investigating any city officials in connection with
S&W, referring all questions to the City Attorney's Office. Assistant City Attorney Russell Miyahira said his office is not involved in the S&W investigation.
Dave Demerjian, head of the District Attorney's Public Integrity Division, which investigates corruption by public officials, said his office has a policy of not confirming or commenting on investigations.
Visits reportedly frequent Former S&W employees said Guidi came to the tow yard at least once a week to look at cars, often accompanied by Velez.
"I would see him, I would see Louis," said the former female employee who asked not to be identified and described Velez as "Guidi's right-hand man."
"(Guidi) was just a regular visitor. You opened the door, you let him straight in. When he called you didn't put him on hold. When he was put on hold he got very angry."
Arias and a man who until recently worked for S&W for several years also said Guidi and Velez were frequent visitors to the tow yard.
The man, who asked not to be identified, said Guidi sometimes showed up three or four times a week to look at cars and talk with Germain, typically staying for 30 minutes to two hours.
"They were up there all the time," he said. Arias and the two other former S&W employees said the mayor's visits and telephone calls were not to be announced over the company loudspeaker.
"We were told never to say his name over the loudspeaker, just say it was an important phone call," said the female ex-employee, who requested anonymity.
Publish Date:March 1, 2004 |
