An AR Exclusive: PACHECO MADE ILLEGAL $10,000 LOAN TO PHONE BANK=
by Joe Shea
American Reporter Correspondent
LOS ANGELES, May 24, 2001 10:21am PDT -- Using campaign funds, Los Angel= es City Councilman Nick Pacheco made an illegal, interest-free, short-term = $10,000 loan with no due date in February 2000 to La Colectiva, the politic= al phone bank operation that later made controversial phone calls attacking=
mayoral candidate Antonio Villaraigosa on behalf of Rep. Xavier Becerra's = unsuccessful campaign, the American Reporter has learned.
La Colectiva leased a computer and phone lines from Cal, Inc., a non-pr= ofit political advocacy corporation that Pacheco also set up but which had = no staff, to make a variety of political calls.
In an interview, Pacheco = denied any wrongdoing, saying that Cal, Inc. is an advocacy group, not a ch= arity, and that no taxpayer funds were involved in the use of what he calle= d "a hammer" abused by the Becerra campaign.
"Cal, Inc. bought a hammer, and Becerra abused the hammer. The D.A.'s r= eport clearly outlines that the Becerra campaign abused this hammer," he to= ld the American Reporter.
"Those aren't city funds. They're not taxpayer funds, they're mycampai= gn funds. [The Ethics Commission] called it an expenditure, and wecalled i= t a loan."
The $10,000 loan was part of a 12-page stipulation entered intolast year= between the Los Angeles Ethics Commission and Lauro "Nick" Pacheco, the fi= rst-term City Councilman for District 14 elected in 1999, who is a former m= ember of the State Assembly.
Pacheco told the American Reporter that neit= her he nor La Colectiva's owner, Alonzo Villareal, are members of Cal, Inc.= , although Pacheco says he took the lead in creating the entity to advocate= for Neighborhood Councils.
After Cal, Inc., was created it initially had no staff but had a new p= hone bank that was not in use, he said.
"Somebody else said, 'We can use your computer while [Cal, Inc.] is staf= fing up.' Through that use, the computer got paid for," Pacheco said. The p= hone lines used by La Colectiva are connected to the Cal, Inc. computer.
Illustrating the bitterness that the Becerra phone calls have engendere= d in the Los Angeles political scene, Pacheco charged that Gloria Molina's = political supporters were behind charges that there was a conflict of inter= est involved.
La Colectiva, Pacheco explained, "was the company hired in 1999 to run = my campaign. We beat Gloria Molina's candidate, Victor Griego. ... I beli= eve this is payback because we beat her candidate." However, no one from th= e Molina organization has contacted The American Reporter.
"It just seems odd to me that people would be concerned about an advocac= y group that was organized to help neighborhood councils. It's not a chari= ty," Pacheco said.
The appearance of a conflict of interest in the matter of the calls, in= which a woman impersonating Los Angeles County Supervisor Gloria Molina at= tacked former State Assembly Speaker Antonio Villaraigosa, was heightened b= y the loan, which may have been prohibited by city campaign laws.
There is no evidence that the proceeds of the loan were connected in an= y way to the phone calls allegedly ordered by Becerra campaign manager Paig= e Richardson.
The Ethics Commission stipulation is available online from = the campaign database maintained by ther Ethics Commission.
"On February 1, 2000, the (Pacheco) Officeholder Account made a short-te= rm, interest-free loan to La Colectiva, Inc., a for-profit corporation, for= work performed by La Colectiva unsder a city contract for which La Colecti= va had not been paid.
This loan was prohibited either because it did not fall into any of th= e enumerated categories set forth in LAMC Section 49.7.12A, or if it was pe= rmitted because it related to an expenditure similar to one of the enumerat= ed categories, the Councilman did not seek the permission of the Ethics Com= mission before making theloan.
The Councilman and Treasurer admit that they violated the MunicipalCod= e by making this loan from the Officeholder Account to La Colectiva, Inc., = without first seeking the permission of the City Ethics Commission.The Coun= cilman and Treasurer [Stephen J.] Kaufman state that theirviolation of the = Muncipal Code was inadvertent, unintentional, and without any intent to con= ceal, deceive or mislead," the stipulation agreement said. It was signed by= Pacheco and Kaufman last year.
A report first published in the Los Angeles Times today said the = phone lines used to make the controversial attack call against Villaragosa = were leased from Cal, Inc., the corporation set up by Pacheco, but didn't m= ention the illegal $10,000 loan. [Editor's note: Earlier editions incorr= ectly reported that the Times had not mentioned Cal, Inc. by name.= i>]
According to Los Angeles County Records, the Fictional Business Name,= or DBA, for La Colectiva Comunity Phone Bank was filed in late March and e= arly April, 2001. State records list the owner of La Colectiva as Alonzo Vi= llareal of 2438 Stevens Ave., Rosemead. The firm's mailing address in state= records is 2541 Whitney Drive, Alhambra.
La Colectiva was established, according to state records, in 1994. It wa= s listed at 314 Isabel Drive, Los Angeles, in Pacheco's March 2000 quarterl= y Officeholder Account disclosure to the Ethics Commission. The campaign di= sclosure saysthe due date for the loan was "unreported."
Villareal was not a contributor to his 1999 campaign, Pacheco said.