Compton Considers Trash Deal With Bribery Figure

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Compton Considers Trash Deal With Bribery Figure

Finances: Four members of council favor a pact with the man who gave payoffs to two ex-officials in the early 1990s. One backer cites his expertise.

 

 

By JOE MATHEWS, Times Staff Writer

 

Five years ago, Michael V. Aloyan caused the Compton City Council no small amount of embarrassment. In federal court, the businessman admitted passing bribes to two council members on behalf of the trash and casino corporations for which he worked.

Now the City Council--minus the two bribe-taking members, who went to prison--is on the verge of awarding Aloyan a no-bid contract to collect Compton's trash, worth about $25,000 a month. Four of five council members have said they support Aloyan.

With their support as a backdrop, a public hearing tonightpromises a bitter look back at Aloyan's past and a messy period that many in Compton would rather forget. Opponents are expected to raise concerns about future rate hikes and criticize the council's traditional willingness to grant second chances.

The resulting debate could create headaches for Aloyan's strongest supporters: Mayor Omar Bradley and his probable challenger in next year's election, City Councilwoman Marcine Shaw.

"This deal is an example of how nothing ever changes in Compton," said former Councilman Fred Cressel, who will run for mayor next year. "In this, we're seeing the same people and the same sort of dealing that created trouble before."

Aloyan, 40, was never charged with any crime. He testified against former Councilwoman Patricia Moore and former Mayor Walter Tucker III in exchange for immunity from prosecution.

Reached Friday by telephone, Aloyan said the trash deal was good for the city. When questions turned to his past, he hung up. Aloyan has said that any talk about his past testimony is unfair.

"Mike is a good man, and that trial was a few years ago," said Shaw. "If I waited for contractors to come along that didn't have controversy or a past attached to them, I probably wouldn't vote for a damn thing."

Earlier this year, the city ended its contract with a private waste hauler and issued $6 million in bonds to build a municipal trash operation.

But Compton officials said Aloyan's newly formed Hub City Solid Waste Services Inc. has made an offer too generous to refuse. According to a proposed contract obtained by The Times, Aloyan would pay a $2-million fee to initiate the contract. In 2003, Aloyan would begin monthly payments starting at $20,834. He would have to cover debt service on the city's $6 million in trash bonds.

In exchange, Aloyan would have exclusive rights to collect the city's residential, commercial and industrial waste for the next 15 years. He would use the city's trash equipment under a lease arrangement. Aloyan anticipated making "no less than $25,000 a month" on the trash business, according to his filings earlier this year in his slander suit against a community activist.

City spokesman Frank Wheaton defended Aloyan. "When you look at the real facts of his past, you'll see he was an intermediary at best. In fact, he was a victim."

In 1987, Aloyan emigrated from Armenia, and a year later landed a job at Murcole Inc., a trash firm with a contract in Compton.

By 1991, Aloyan had become Murcole's general manager. The company was seeking a rate increase from the Compton City Council. According to his court testimony, Aloyan, through an intermediary, passed a $5,000 check from Murcole to then-Mayor Tucker in exchange for his vote in favor of the rate hike. Aloyan also testified that he arranged for a $2,500 contribution to Tucker's congressional campaign in return for a vote in favor of extending Murcole's contract.

In 1992, Aloyan joined another trash company owner in a bid to open a casino in Compton. To soften the opposition of City Councilwoman Patricia Moore, Aloyan passed checks from the gambling corporation, Compton Entertainment Inc., to Moore's campaign manager, Basil Kimbrew, according to court testimony. (Kimbrew is another likely candidate for mayor next year.)

The bribes were uncovered during a broader federal investigation of Compton.

Prosecutors granted Aloyan immunity in exchange for his testimony. Tucker was convicted of bribery and tax evasion in 1995 and sentenced to 27 months in federal prison. In 1996, Moore was convicted of extorting bribes and was sentenced to 33 months.

Aloyan's admissions hardly hurt his prospects in Compton.

He remained close to Compton politicians. Bradley, who has defended Aloyan, supported the businessman's failed effort to get back into the casino business in 1997. Aloyan donated $2,000 to Councilman Amen Rahh's campaign in 1999, and a lawyer who set up his current trash company, Hub City, gave $500 to Councilwoman Delores Zurita's 1999 election effort.

Shaw said she has traveled to China three times in the past five years, meeting on occasion with business contacts of Aloyan, who has investments in the Hubei province.

Given his experience, Shaw said, it made sense for the city to turn to Aloyan for its trash needs. For the last few months, Aloyan had been supervising the creation of a municipal trash operation under a $25,000-a-month contract, city records show. From that arrangement, it was only a short hop to the council's decision to turn over all trash collection to Aloyan, she said.

"I'm a little bit perplexed by the whole thing," said Councilwoman Yvonne Arceneaux, the contract's lone opponent on the five-member council. "With his history, we'll have to go through all that stuff again. And since we have not solicited other bids, we don't know if this is the best deal for the city."

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Figure From Past Compton Scandal Objects to Contract

Hearing: Ex-Councilwoman Moore, once imprisoned in bribe case involving the man now seeking a no-bid deal for the city's trash business, warns of corruption.

 

 

By JOE MATHEWS, Times Staff Writer

 

Like a ghost of scandal past, former Compton City Councilwoman Patricia Moore appeared before the Compton City Council on Tuesday for the first time since completing a 28-month federal prison sentence and criticized a controversial no-bid trash contract as corrupt.

During a public hearing that lasted more than three hours, Moore blasted the proposed awarding of the contract to a man who admitted to bribing her eight years ago.

The object of her scorn, Michael V. Aloyan, 40, sat 15 feet away, his eyes glued to the floor.

The council made no decision on the contract Tuesday, but four of the five members have expressed support for it. The council will take up the matter again early next year.

Under the proposed contract, Aloyan would receive an exclusive license to use city equipment to collect Compton's residential, commercial and industrial trash for the next 15 years. In return, Aloyan would pay an upfront fee of $2 million, pay monthly franchise and administrative fees, and cover all service on $6 million in bonds issued to finance the equipment.

"I am amazed at even the possibility of this venture between Mike Aloyan and the city," Moore said. "I grieve for Compton and will do everything within my power to repair the damage I have done, which includes ensuring that what happened to me will not happen to you or anyone else in Compton."

The hearing made for a night of high political theater in Compton, as longtime political figures and neighborhood activists relived some of the darker moments in the city's recent history: the trials of Moore and former Mayor Walter Tucker III.

In addition to the appearance of Moore, who was convicted of extortion and income tax fraud, former Congressman Mervin Dymally arrived to denounce the deal. Dymally accused Aloyan of being an FBI informer who had tried unsuccessfully to entice him into illegal acts.

Opponents of the deal, including ministers, neighborhood presidents and candidates in next year's city election, added to the harsh talk. Several demanded that the council seek other bids, and one hearing witness, Sam Perdomo of the Florida-based waste conglomerate Republic, said he could submit a bid within 48 hours.

Eric Perrodin, an assistant district attorney who is running for mayor of Compton, said the deal provided too little protection in the event that Aloyan's company, Hub City Solid Waste, goes bankrupt.

But Mayor Omar Bradley said the deal offers 27% more than any private waste hauler had provided the city in earlier contracts. He also said the city would save by having a private firm employ its trash workers.

"This is unprecedented," Bradley said.

Aloyan has been a fixture in Compton since shortly after he moved from his native Armenia to the U.S. in 1987. For seven years, he worked for a private company that collected Compton's trash. He also was involved in an effort to bring a casino to Compton. A major donor to churches and supporter of charities, he once was called Santa Claus by a Compton weekly newspaper.

In 1995 and 1996, he testified in the extortion trials of Tucker and Moore. In each case, Aloyan, using intermediaries, passed several thousand dollars in bribes from his companies to the politicians. In return, they cleared the path for his gambling and trash interests.

Aloyan and his attorney, Milton Grimes, now maintain that the payments were not bribes bribe because Aloyan had no choice but to pass it along.

"It was extortion," Grimes said. "We'd hope people would give him the benefit of the doubt."