Audit: City of Industry Paid Millions to Former Mayor’s Companies

The City of Industry doled out more than $326 million to companies owned by former Mayor Dave Perez and his family over the past 20 years, according to a recent audit ordered by city officials. The review has also cast doubt on the validity of invoices which suggest steep overpayments for a number of services rendered by their companies.

One of the companies, Zerep Management Corporation, was receiving seven times more for citywide street sweeping and parking lot maintenance than the city currently pays its providers ($133,000 vs. $20,000 per month). The amount Industry paid to the company each year is equivalent to the hiring of 50 full-time city employees.

In addition, the audit suggests that the company overcharged for vehicle and equipment rentals, though City Manager Kevin Radecki and Mayor Tim Spohn would not confirm whether that was the case. A sexual harassment suit and a fine from state water regulators added another $7 million in costs picked up by the city.

The latest audit, conducted by KPMG, was ordered after Perez stepped down in 2012, citing health issues. Last year, the city sued the former mayor and his companies for $10 million, but later entered into a lucrative contract with Zerep for general maintenance of city facilities.

The review comes six years after an inquiry conducted by the district attorney’s office. That investigation closed in 2011 with no charges filed.

Read more about the audit’s findings here.


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