Firm Gave Him Loan, Alatorre Acknowledges

Los Angeles City Councilman Richard Alatorre acknowledged Friday that a firm with substantial government business financed a $12,000 tile roof on his Eagle Rock home, a transaction that figures in a federal corruption probe.

The councilman, testifying in a bitter guardianship hearing, described what appeared to be a favorable loan by the East Los Angeles Community Union, known as TELACU, which came weeks after Alatorre helped one of the firm’s partnerships obtain a crucial $2-million city development loan.

Alatorre told Superior Court Judge Henry W. Shatford that his loan had no payment plan and that he had partially repaid the obligation with cash he had around his house.

The description of the loan came during continuing testimony in a guardianship battle that is delving into allegations of financial impropriety and drug abuse by the lawmaker. Alatorre has denied using drugs in the last decade or engaging in any financial wrongdoing.

Shatford is hearing evidence on whether Alatorre and his wife should retain guardianship of their niece, who has lived with them full time for the last two years. The 10-year-old’s father, a longtime political rival of Alatorre, is seeking to prove that the couple are unfit caretakers.

The Alatorres contend that the girl’s father, Henry Lozano, has provided no support for his daughter and shown little interest in her well-being.

The details of the roof transaction are one of several areas under investigation in a wide-ranging criminal probe by the FBI, the Internal Revenue Service and the Metropolitan Transportation Authority’s inspector general, working with the U.S. attorney in Los Angeles. In addition to being the powerful chairman of the City Council’s Budget Committee, Alatorre has been an influential MTA board member.

The Times reported in April that federal agents were investigating TELACU’s financing of Alatorre’s roof. The financing coincided with the lawmaker’s support of a city loan on a TELACU shopping center in his district and his aggressive backing of a TELACU team seeking a $65-million MTA subway contract. At the time, the councilman’s office released a statement saying that the Alatorres did not “have time to deal with fairy tales in the paper” and that they were paying the roof bill.

Until Friday, however, the couple had declined to say whom they were paying for the roof or the terms of their loan agreement. Alatorre did not disclose any loan or other financial obligation to TELACU on his public statements of economic interests. State and local laws normally require disclosure of loans not received from commercial lenders and made on terms not available to the public.

Under questioning from attorney Ricardo A. Torres, who is representing Lozano, the councilman said he still owes TELACU $10,000 for the roof work.

He said he could not remember when he began repaying the loan. Nor did he have banking records documenting the $2,000 he said he has paid thus far.

Torres asked if he made the payments from his checking account.

“No, I paid them from money I had,” Alatorre said, adding that he used cash that he kept in his home.

Torres asked how much the payments were.

“I don’t have a payment schedule,” Alatorre answered.

Raising his voice on the witness stand, Alatorre angrily insisted that he had not engaged in any financial mismanagement. “For you to infer that there was something illegal done by my wife or myself is insulting,” he told Torres.

Torres focused on why the lawmaker failed to list his financial obligation to TELACU on a separate real estate loan application the couple took out earlier this year.

Alatorre repeatedly said he could not recall the details in those loan documents, adding that his wife, Angie, had a better grasp of the family’s finances.

Torres said after the hearing that there is “good reason to believe” that assets intended for the councilman’s niece have been used improperly, in part to pay the TELACU roof bill. Alatorre emphatically denied the accusation Friday.

The councilman’s attorney, Neil Papiano, repeatedly objected to Torres’ detailed grilling on the roof loan and other household finances, saying they were irrelevant to the issue of whether the Alatorres should retain guardianship of their niece. He also accused Torres of playing to the media and engaging in a “ridiculous” airing of the couple’s private financial matters.

Friday marked the second time this week in the guardianship hearing that Alatorre testified to dealing in cash on transactions that figure in the federal investigation. On Monday he said that he used $2,800 he had at home to repay a lease agreement with an associate of a real estate investor who had business before the City Council.

Also on Friday, Alatorre filed public documents showing that his debts continue to grow, largely because of the various investigations. The councilman’s office committee, which serves as his legal defense fund, listed outstanding debts of more than $60,000, much of it attorneys’ fees, according to records at the city Ethics Commission.