- Associated Press - Thursday, May 7, 2015

INDUSTRY, Calif. (AP) - California’s top bookkeeper said Thursday she will audit the finances of the city of Industry, which an initial report says paid about $326 million to companies owned by a former mayor and his family.

State Controller Betty Yee said her office will scrutinize payments made just before and after Dave Perez stepped down in 2012 as mayor.

A review by the commercial firm KPMG, released in April, suggested massive overpayments to Perez, his brother and their company, saying invoices justifying the payments were vague or inflated. That review covered a longer period than Yee’s office plans to check, at least initially.

The review said Industry paid Zerep - Perez spelled backward - nearly seven times more for street sweeping and parking lot maintenance than it now pays after canceling the contract.

For the amount Zerep billed for vehicle and equipment rental, the city “could have purchased and owned a fleet of the same or similar vehicle and equipment several times over,” the KPMG report said.

Attorney Stephen Larson, who represents Zerep, said Thursday the KPMG report was unfair because the company was not contacted. Zerep is preparing a response to the review, he said.

The company “is very proud of its service over the years and is confident when all of the facts are known, the issues raised will be put to rest,” Larson said.

Located about 20 miles east of Los Angeles, Industry has around 400 residents but due to its business tax base collects $140 million in annual revenue. The Perez family has owned companies with contracts to provide city services for decades.

The city manager said Thursday that his office has a May 18 meeting scheduled with Yee’s staff.

“We will provide the information that they need so they can complete their report,” City Manager Kevin Radecki said.

The city canceled the maintenance and street sweeping contract with Zerep in September for unspecified “wrongdoing,” Radecki said, but it still has a contract with a company Perez partly owns for trash collection. That contract, which runs through 2025, is worth $13 million annually, Radecki said.


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