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SHYLOCK 2000

Photo by Christine Pelisek
As a single mother raising a disabled child, Kathy C. just couldn’t make it on the money she received from supplemental Social Security and welfare. So, she visited her first payday-advance store, one of the storefront lenders that have cropped up all over L.A. in recent years, handing out small, short-term loans (up to $300) at astronomical interest rates (as much as 900 percent). Within the year, Kathy had borrowed $1,600 from eight different payday-lending stores, racking up more than $2,000 in fees. Recently, she filed for bankruptcy.

What’s astonishing about this story is that, 400 years after Shakespeare created the avaricious lender Shylock, such usury may be perfectly legal, according to consumer activists. Exploiting a legal gray area, the 1,600 advance-lending stores of California exact enough “juice” to wow even a Mafia loan shark, by rolling consumers’ loans into new packages each month, over and over again.

The California Financial Service Providers Association (CFSP), a state trade group for the advance-loan industry, says payday loans can be cheaper than bounced-check fees or late-payment penalties. “Consumers Union has had a hard time finding people that claim they have been abused by the product,” said CFSP president Jim Ball.

Tell that to Peter Rhodes of Los Angeles. Rhodes filed suit last October, claiming that he had paid $956.16 over six months on a $255 loan from Goldx Financial Services in downtown L.A.

California Public Interest Research Group is calling for new laws to curb payday lending. State Senator Don Perata (D-Oakland) has proposed legislation extending how long a borrower would have to repay payday loans. But industry lobbyists have managed to stall the bill.

“These businesses are aimed at people who don’t have access to traditional lines of credit and for those who live paycheck to paycheck,” said Robyn Smith, directing attorney of the consumer-law project of Public Counsel. “There are a lot of those type of people in L.A.”

—Christine Pelisek

ZEV’S PRIVATIZATION JONES

Supervisor Zev Yaroslavsky enjoys a liberal, labor-lovin’ reputation. So why does he continue to be the point man in the fight to privatize a pivotal piece of L.A. County’s welfare-to-work program? Is it a vendetta by a pol with a known vindictive streak against the county agency charged with administering welfare-to-work? A desire by a possible mayoral candidate to make political hay with the companies who would profit from the plan?

The question arose again last week when Zev helped resuscitate an all-but-dead initiative to contract out management of a quarter of the county’s welfare-to work cases. Front-runner for the lucrative contracts: Maximus, a company that, despite committing colossal blunders in administering welfare-to-work, has worn a path to the public trough in 25 states since welfare law was changed in 1996. The other top contender is Lockheed Martin IMS (yes, the one that sold the Pentagon $640 toilet seats).

The county Department of Social Services last year rejected bids from the two companies and others as too expensive. But Zev kept the privatization ball in play with his enthusiastic backing for a demand that the county auditor-controller revisit the issue. When the auditor’s report showed that government workers could do the job cheaper, Zev insisted that a private-sector firm review the numbers. The resulting report by Orion Consulting — ironically, a firm with its own portfolio of public-management contracts — also found government workers to be more cost-effective.

Undeterred, Supervisor Mike Antonovich carried the water on last week’s sudden motion to reopen and fast-track a new welfare-to-work privatization bidding process. Zev, who voted with Antonovich, was predictably vocal.

“He does not accept the numbers that have been put forward so far that it’s better and cheaper to do it in-house,” says Yaroslavsky spokesman Joel Bellman. “That may ultimately prove to be the case, but it’s far from proven today.”

Tanya Akel, a researcher with the union representing county workers, doesn’t buy Zev’s rationale. “It seemed like [Zev] was giving a clear message that it had better turn out differently this time, that the contractors better be found cost-effective.” Akel says that the union is at a loss to explain Zev’s tenacity on the issue. “He has gotten some money from Lockheed, but we weren’t able to find anything significant,” adding that she thinks what he really wants is the political capital he can amass by championing privatization.

Community organizer Anthony Thigpenn of South L.A.’s AGENDA isn’t puzzled. “Zev, during the last three years we have been working on this issue, has postured himself as a fiscal conservative. It really is about money, about how you reduce the number of county workers.”

What’s been lost in the privatization debate is the moral issue: Should the fate of the county’s poorest people be left to the none-too-tender ministrations of corporate nabobs?

“The whole debate should be based on how to provide training and a career track to lift people out of poverty, not what’s most cost-effective,” says Thigpenn.

—Bobbi Murray

THE PRICE IS WRONG

There were frat boys urging a line of rain-soaked hopefuls to do the Wave. There was a couple from Salt Lake City, groggy from a two-day drive. And then, just when we thought we had seen and heard enough, there were the interviews. That was the scene at CBS Studios on Beverly Boulevard last Thursday when OffBeat and her Canadian family stumbled in to compete for contestant slots on the daytime game show The Price Is Right. Arriving at 8 a.m., OffBeat overheard a spunky 77-year-old woman say she had tried out for the show on her birthday every year for the last 15. She never made it. Six hours and several rain showers later, we were told we’d be let into the studio. But first, we had to show producers we were lively and animated enough to be contestants. The OffBeat crew never even came close. We listened to the chanting and cheering inside erupt into full-blown hysteria when the selections were made. And the winners, please: two perky frat kids, a couple of housewives, an airline steward and a middle-aged guy from the Midwest. OffBeat begrudgingly cheered on her chirpier betters. We wonder if Brad Pitt felt the same stage fright we did when he auditioned for Seven.

—Christine Pelisek

Fanfare for the Common Guv

The drill at last weekend’s state Democratic convention was clear and unvarying: Speakers, when introduced, toddled straight to the podium and began speaking. The only exceptions were Al Gore and Bill Bradley, who entered on the convention floor, made their way to the stage through a sea of delegates, pumping hands as they went while music blared throughout the hall. The standard entrance, that is, for presidential candidates.

Except, it wasn’t just presidential aspirants who did the Big Dude Walk. Governor Gray Davis entered that way, too, to the pompous strains of John William’s “Olympic Fanfare,” suitable music for Groucho’s presidential inaugural in Duck Soup. Gray took his time, shaking the hands of standing delegates, sitting delegates, sleeping delegates — taking so much time that the “Fanfare” finished with Davis not even on the stage yet. And abruptly, the room was filled with . . . silence. What had been visually apparent during the “Fanfare” was now aurally apparent: Nobody was clapping. It was a ghastly moment, yet not a single delegate thought to stop the silence by applauding. Undaunted, Gray shook in silence until the convention techs restarted the “Fanfare.”

Davis has a thing for fanfares. When he signed the state budget last summer, he did it under a broiling Sacramento sun, so that a troop of trumpeters could toot him on. But trumpeters or no, the dirty little secret of California politics is that Democrats — at least, the activists and insiders — don’t really like Davis. On the basic Dem- ocratic causes — expanding health insurance, investing serious money in schools and such — Davis has to be hauled along kicking and screaming. Not that the delegates were hostile to their governor. They just saw no reason to applaud.

So the Weekly is prepared to step into this breach and make you an offer, Governor Gray. You bring California’s per pupil spending up to the national average, build three more UCs, six more CSUs and 20 more community colleges, create a universal health program so that California is no longer home to 7 million residents with no health insurance, sign legislation mandating the licensing of handgun owners and the registration of their guns, and build a bullet train that traverses the state. And, if you live up to your end of the bargain, the Weekly will pay the L.A. Philharmonic to serenade you with the complete Beethoven’s Ninth every time you so much as step outside your office door.

Deal?

—Harold Meyerson