David Perez, ex-Mayor of the City of Industry, and his four sons have been accused of corruption in a lawsuit filed Tuesday by the City of Industry. The lawsuit alleges that the ex-Mayor “enriched himself and the companies he controlled at the expense of the city and its citizens to whom he assumed an obligation to faithfully serve.” (quote from lawsuit via CBS)
The city claims Perez, who held elected office (including as a councilman) for over 10 years, made millions of dollars in profit by allocating city funds into family-run businesses. An audit of the city conducted after Perez left office in 2012 revealed that Perez and his family earned an average of $16 million a year over the past 20 years. The City of Industry began doing business with one of the companies named in the suit, Zerep (Perez spelled backward) in 1980, before Perez held office. The contract with Zerep was renewed and renegotiated several times, and the city estimates that the company made $219 million in profit between 1995 and 2014 from city contracts. Perez, his family, and their businesses had a strong hold on the small municipality– Perez-run companies received contracts for street cleaning, trash hauling, and other maintenance services for the city of 400.
In addition to his family’s earnings, the audit reveals that the family-held businesses often charged their services at dramatically inflated prices. Zerep, for example, charged approximately $133 million per month for street cleaning. The city switched to a different company after Perez left office and now pays $22 thousand per month for the same service.
The city’s D.A. conducted an investigation into possible conflicts of interest in the mayor’s office but ultimately closed the investigation without pressing charges after discovering that Perez abstained from voting on various boards while in elected office. After the recent audit was originally published this past April, the D.A. decided to reopen the investigation against Perez. The lawsuit filed this week will likely go to trial in June of 2016. Perez retired in 2012, claiming that he wanted to spend more time with his family.