Former Vernon City Administrator Indicted on Three Felony Counts

By City News Service and EGP News Report

Ex-Vernon city administrator Donal O’Callaghan pleaded not guilty to a grand jury indictment unsealed Tuesday charging him with three felony counts stemming from financial deals involving his wife and the small municipality.

The indictment, handed up Monday, charges O’Callaghan with two counts of conflict of interest and one count of public officer crimes. The District Attorney’s office is alleging that O’Callaghan got a contract for his wife to work as a $40 an hour bookkeeper for the city.

Donal O’Callaghan

Details of the grand jury testimony that are expected to come out ten days after the defense picks it up “will shed more light” on the case, said Deputy District Attorney Max Huntsman.

Public officials are trained in public ethics law, and one of the things that they learn is that it is illegal to have a hand in creating a contract that would be of financial benefit to him or her, Huntsman said.

Los Angeles Superior Court Judge Peter Espinoza set bail at $50,000 and ordered O’Callaghan to return to the downtown courthouse on Dec. 3 for a pretrial hearing.

Huntsman said the charges involve an alleged loss of about $140,000 that was paid out.

“This is a classic case of ‘gotcha’ where the city is accusing Mr. O’Callaghan of conflict of interest,” defense attorney Mark J. Werksman said.

O’Callaghan’s attorney said his client’s wife, Kimberly McBride O’Callaghan, was hired to work as a third-party contractor with the knowledge of city officials and that she was paid a “reasonable salary” for performing “valuable services for the city.”

Werksman said his client was “forced to resign last week,” despite being a “hard-working productive city administrator.”

Vernon officials confirmed O’Callaghan resigned Oct. 14. He had been put on administrative leave on Aug. 26 while City Attorney Larry Wiener conducted an internal investigation.

“Vernon has fully cooperated with the District Attorney’s office in its investigation of Mr. O’Callaghan and will continue to do so,” said Vernon City Administrator Mark Whitworth.

Wiener, an attorney with Richards, Watson & Gershon, has parted ways with the city, but will stay on until Nov. 1 to conclude his internal investigation. He has assisted the District Attorney’s office by informing them of facts related to the case, according to Huntsman.

“I don’t think that there is a surprise that this indictment has taken place,” given the recent news and intense scrutiny surrounding the city in recent months, said Vernon Chamber of Commerce Chairman Thomas Andersen.

He says the negative news is “embarrassing” for Vernon businesses and the association with these events has had an “actual impact on businesses in the city,” with some losing customers because of it.

Business people and property owners, who are seen as the main constituents in Vernon, are “concerned about the apparent corruption occurring in the City of Vernon,” according to Steve Freed, president of the Vernon Property Association.

He said they are concerned about the “outrageous salaries” of some former city officials and pointed out that past officials other than O’Callaghan have been indicted or convicted of wrongdoing.

“We commend the Los Angeles County District Attorneys Office for its continuing investigation into these matters,” he said.

O’Callaghan is the third former Vernon city official to face criminal charges in recent years. Another former city administrator, Bruce Malkenhorst, is awaiting trial on felony charges of misappropriation of public funds.

Leonis Malburg, who had been mayor of Vernon for more than 50 years before resigning last year, was sentenced in January to five years probation and ordered to pay $579,000 in fines and restitution in a voter registration fraud case.

Los Angeles Superior Court Judge Michael Johnson said then that the charges stemmed from “serious crimes involving fraud and dishonesty which merit serious punishment,” but he said he did not give the former mayor jail time because of his age – 80 – and his medical condition.

Malburg’s wife, Dominica, was given three years probation and $36,000 in fines and penalty assessments.

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October 21, 2010  Copyright © 2012 Eastern Group Publications, Inc.

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