In Montebello, the first steps are underway after more than a million dollars was discovered missing from previously undisclosed city accounts. The accounts, which were both discovered by accident, once had more than $1.1 million in them. Now, there’s less than a quarter million left.
The city has a history of corruption and scandal, with multiple recall elections in the last five years. And current city officials worry that recent revelations could only be the tip of the iceberg.
But with the city facing a $2 million deficit out of its $45 million operating budget, people are beginning to worry that this corruption could be the start of a spiral to bankruptcy.
From the Los Angeles Times:
Millions in Montebello city funds have been mismanaged or drained from off-the-books accounts, leaving officials scrambling for explanations and prompting fears about the city’s solvency.
Fiscal troubles abound in the city of about 65,000 in southeastern Los Angeles County: Federal officials say Montebello misused $1.3 million in federal housing money and want it back; a city official discovered $5 million in debt a few weeks ago; and the city has been sued by a businessman who alleges it illegally borrowed up to $19 million from its redevelopment agency last fall.
The matter of the unofficial bank accounts came to a head this week, when officials disclosed that about $900,000 from an off-the-books Union Bank investment account could not be immediately accounted for. There’s now $5,000 left in the account, which came to light when an employee in the Montebello finance department discovered a bank statement and alerted the city finance director.
Read the full article here.