Oxnard’s Ed Sotelo: Too big to fail?
By Shane Cohn 01/17/2013
Taxpayers should hope that Oxnard City Manager Edmund Sotelo is no different than AIG Inc.
In 2008 the United States government rescued the mega-insurance company American International Group with a $182 billion bailout. A little more than a week ago, AIG was toying with the idea of suing the U.S. government because the interest rates on the bailout were too high.
At about the same time, it was reported that Sotelo was considering suing the city of Oxnard. Sotelo has been on an unexplained paid leave of absence for nearly a year, collecting his entire annual payout of more than $400,000. His contract with the city expires Feb. 28 and the City Council voted last week not to renew it; and his attorney, Bill Seki, said he is going to explore all legal avenues available to his client because they are still in the dark about why he was placed on a leave of absence.
More on this in a minute.
Now, prior to its bailout, AIG was gambling big on mortgage investments that crapped out so badly the company was on the verge of capsizing. The company came to be the poster child for excessive risk. The federal government decided to bail out the company because, as one of the world’s largest insurers, if AIG went bankrupt, the damage it could pose to the financial system was atomic. As the spotlight shone on AIG, it was discovered that the company paid millions of dollars in bonuses to top executives and spent lavishly on spa treatments, among other things, while the American public was bailing it out of its perceived trouble.
Back to Sotelo and his possibly suing the city for more taxpayer money because he doesn’t know why he is out of a job.
One could argue that perhaps Sotelo, employed by the city for 14 years, was bailed out by Ventura County District Attorney Greg Totten’s office because the nearly two-year investigation into the city of Oxnard during Sotelo’s reign resulted in no arrests, since the statute of limitations of crimes committed had expired. But the “bailout” did highlight some reasons why Sotelo may not be fit to lead the county’s largest city, why he, like AIG, is an excessive risk and why the City Council probably didn’t want him around this past year.
• He authorized a $300-a-month for life retirement perk for top managers, known as the “supplemental post-retirement benefit checks,” without the Council’s knowledge.
• He gave himself a $10,000 loan of public funds without the Council’s knowledge, which then went unpaid years after it was intended to be paid in full.
• He instructed city staff to “dilly, dally and delay” when doing city work, according to the DA report.
• The city’s top officials, during Sotelo’s leadership, were using public funds to pay credit card balances for expensive meals, bar tabs, adult films in hotels and travel expenses.
This comparison between a man who headed Ventura County’s largest city and one of the world’s largest insurers is loose, at best. But it does show that both seem to think they are too big to fail. Sotelo even wrote a letter, dated Dec. 18, stating that he would like to continue his employment with the city.
AIG announced last week that it would not, in fact, sue America, as the public seethed in anger about the potential suit. As the Wall Street Journal put it, the decision spared AIG from looking like a “world-class ingrate.” Ed Sotelo, here’s looking at you, kid.
Slapshot is a monthly column/op-ed piece on various issues around Ventura County.