A WEEK AFTER LOS ANGELES CITY ATTORNEY Rocky Delgadillo filed criminal charges against downtown developer Meruelo Maddux Properties Inc. for illegally dumping asbestos-tainted material, key questions remain.
Why charge the president of the company, John Charles Maddux, and not CEO Richard Meruelo, whose Merco Group is listed on documents filed with the county as the site owner of the property at 1060 North Vignes Street, where Meruelo’s company, Meruelo Maddux Properties, illegally demolished seven industrial structures last year?
Where did Meruelo Maddux haul the highly regulated toxic debris?
And, finally, why is Mayor Antonio Villaraigosa refusing to acknowledge what appears to be a troubling pattern of behavior by Meruelo, downtown’s largest landowner — and Villaraigosa’s largest campaign contributor — who recently was charged in a separate case involving building- and health-code violations, including rat infestation, at the Seventh Street Produce Market?
“You already wrote a story, so we’re not going to comment,” complained Villaraigosa press deputy Matt Szabo, a former spokesman for Delgadillo. “The mayor is not going to comment on a prosecution.”
When asked about the mayor’s perception of Meruelo and his business practices, Szabo replied, “We’re not going to comment about that.”
Last week, Delgadillo charged company president Maddux and project managers John Durham and John Horrigan with 16 criminal counts of disposing of hazardous waste, failing to notify the South Coast Air Quality Management District of asbestos demolition, and failing to provide documentation of the removal of toxic waste at 1060 North Vignes Street.
In his September 2006 public stock offering, on file with the Securities and Exchange Commission, Meruelo proposed building “workforce housing” on the site, as part of what he characterizes as his “socially responsible” investment strategy. The site owner listed on documents Meruelo has filed with the Los Angeles County Fire Department is Merco Group, which he owns.
When the L.A. Weekly called the number listed on those documents, a person answered “Meruelo Maddux Properties.” When asked, “Isn’t this Merco Group?” the person replied, “Same thing.”
Yet Delgadillo did not charge Meruelo with the dumping crime. Delgadillo spokesman Frank Mateljan said the City Attorney’s Office filed charges against Maddux based on the investigation conducted by the smog-control district, and because Maddux allegedly appeared to play a more hands-on role in day-to-day operations.
“If other facts emerge, then we’ll amend the filing,” Mateljan said, insisting, “Politics is not a consideration.”
Asked for a reaction to the mayor’s refusal to comment on the matter or on Meruelo’s business practices, Mateljan said Delgadillo’s office is focused more on locating the toxic debris, which has mysteriously disappeared. “South Coast did its job, we’re doing ours. Others will have to speak for themselves.”
Little is known about the vanished toxic debris, except that it was substantial and it was hauled away by successive truckloads over several days in November 2005. To date, the City Attorney’s Office has not directly contacted Meruelo Maddux or its officers.
Asked to explain its efforts so far, Mateljan said, “We want to know where it is,” pointing to the company’s failure to disclose that information. “That’s why we charged them.”
This week, Meruelo spokesman Michael Bustamante refused to say where the materials got dumped and added, “Our only contact with the City Attorney’s Office is from reading their press release.”
Meruelo’s company lacked the required permits when it tore down the structures as part of his plan to build “350 mid-rise condominium units with 21,000 square feet of retail” on the tainted site. Environmental consultants have detected lead, heavy oil, diesel fuel and benzene compounds in the soil, according to a proposed cleanup plan on file with the L.A. County Fire Department.
The charges come on the heels of separate criminal charges Delgadillo has filed against Meruelo and another of his companies, Alameda Produce Market, for building- and health-code violations at the Seventh Street Produce Market, which NBC Channel 4 recently caught red-handed allowing rat infestation and other disturbing health-code violations, such as employee urination near boxes of produce destined for stores and restaurants throughout the region.
Meruelo’s “socially responsible” investment strategy has benefited from public money: He purchased the produce market with the help of an $8 million loan from the Los Angeles Community Development Bank, and has received a $150 million line of credit from the California Public Employees Retirement System board, which he has tapped in part to buy land that the Los Angeles Unified School District targeted for acquisition.
Villaraigosa’s campaign for mayor benefited from more than $197,000 of Meruelo’s money. Moreover, Meruelo is purportedly developing the residential and commercial sector downtown that is at the core of Villaraigosa’s vision for the city. Delgadillo’s office emphasizes that its investigation is ongoing.