Owen Harris has a reputation within the Los Angeles County Assessor's Office for being a stickler. Middle-aged, balding, with close-cropped gray hair, he's a supervising appraiser — one whom tax agents bitch about when they get together.
They call him a "defender of the roll." It's not a compliment. Tax agents are private consultants hired by property owners to lobby for lower property taxes. They believe Harris will defend a high appraisal, whether or not the facts back it up. As much as they hate him, though, they respect his intelligence.
On Jan. 4, 2011, Harris was going over a case that was headed to the Assessment Appeals Board when he spotted something unusual.
The property was a five-bedroom mansion on Evelyn Place in Beverly Hills. Originally valued at $3.7 million, the appraiser had cut it to $2.8 million.
Harris tried to double-check the appraiser's work but found he couldn't. The appraiser hadn't done any work. He had just submitted a number, with nothing to back it up. More troubling, he had submitted it to the clerk without getting Harris' approval. It appeared he was trying to hide the appraisal.
Harris dug into the paperwork and found that the appraiser had submitted several more appraisals in the same way. This was a serious problem. He alerted his supervisors: They were dealing with a rogue appraiser.
The next day, the appraiser, Scott Schenter, was called into a meeting in the assessor's Culver City office with Harris and two other supervisors.
Confronted with the evidence, Schenter admitted that he had changed the values without approval. He acknowledged that it was wrong. But he had an excuse. The "third floor" — the Assessor's executive office downtown — had asked him to look into the properties.
Who specifically on the third floor? John Noguez, he said.
Noguez had just been sworn in as the county assessor, the elected head of the entire 1,500-employee department.
Schenter knew he was in trouble, and he might have grasped at anything to save his job. But if what he said was true, then he was not a rogue. He was a scapegoat.
Schenter's allegations set off a firestorm that has both the media and the district attorney's investigators circling the assessor's office. Some have speculated that Schenter was angling for kickbacks. But L.A. Weekly's investigation indicates that his true motivation was likely politics. According to a source familiar with Schenter's account, he slashed roll values by more than $100 million in hopes that the beneficiaries would contribute to Noguez's campaign for assessor. Noguez directed him to do it, Schenter has alleged, and he went along with it because he wanted a promotion.
Records show that some beneficiaries of Schenter's actions did, in fact, donate to Noguez's campaign. And the Weekly has learned that the chief beneficiary of Schenter's reductions, a tax agent named Ramin Salari, helped Noguez get his start in politics with a $15,000 donation.
Over his long career in the assessor's office, Noguez received political contributions from many property owners whose buildings he personally appraised. And politics continued to play a significant role in the office after Noguez was sworn into the top job. Appraisers complained about the access given to tax agents, including Salari.
In fact, Salari continued to get his way. In one memo, a Noguez deputy explained why: Salari was a "known donor."
The assessor's office usually is a sleepy place. The work of assembling a trillion-dollar tax roll is dull enough to ward off outside attention. But beneath the drudgery is a story of ambition, greed and vicious internal disputes about the fundamental role of the office.
John Noguez represents the decades-long progression away from "defending the roll" and toward a more "taxpayer-friendly" approach. It sounds nice, but in practice it has meant befriending powerful brokers and their wealthy clients, all of whom want tax breaks in return for their friendship.
The key to understanding property taxes is that appraisals are not carved in stone. As professionals like to say, it is the only form of tax based on an opinion. Those opinions can be influenced — often by consultants known as "tax agents." Their job is to persuade appraisers to lower their property valuations. If they succeed, they get a cut of the savings.
If tax agents can't convince the appraisers, they can go to the Assessment Appeals Board. The board's job is to listen to both sides and make a ruling. But caseloads are heavy and, in reality, assessor's representatives often hash out bargains with tax agents in the cafeteria across the hall, outside the public eye.
Campaigns offer another lever of influence. Tax agents commonly contribute to assessor's races and encourage clients to donate as well. Tax agents also sit on a citizens' advisory committee, where they have access to top-level assessor executives. They are not shy about offering opinions about which appraisers are easy to work with — and which ones need to be dealt with.