California Court of Appeals, Second District, Third Division
FOR PARTIAL PUBLICATION[*]
from a judgment of the Superior Court of Los Angeles County
Nos. BA382701 & BA376026, Kathleen A. Kennedy, Judge.
Affirmed in part, reversed in part, with directions.
Kim and John P. Dwyer, under appointment by the Court of
Appeal, for Defendant and Appellant.
D. Harris, Attorney General, Gerald A. Engler, Chief
Assistant Attorney General, Lance E. Winters, Senior
Assistant Attorney General, Victoria B. Wilson, Supervising
Deputy Attorney General, and Idan Ivri, Deputy Attorney
General, for Plaintiff and Respondent.
case arises out of the highly publicized corruption scandal
in the City of Bell (Bell). The scandal erupted in 2010,
after it was discovered that the city manager, assistant city
manager, and five city council members were receiving
astronomical salaries and fringe benefits, which they had
taken care to conceal from their constituents. The subsequent
investigation focused in large part on the actions of the
longtime city manager, Robert Rizzo, and the assistant city
manager, defendant and appellant Pier'Angela Spaccia.
pertinent here, a jury convicted Spaccia of 11 counts
relating to the corruption scandal, including five counts of
misappropriation of public funds (Pen. Code, § 424), one
count of conspiracy to misappropriate public funds (Pen.
Code, § 182, subd. (a)(1)), four counts of conflict of
interest by a public official (Gov. Code, §§ 1090,
1097) and one count of secreting an official record (Gov.
Code, § 6200). Spaccia challenges the judgment of
conviction on several grounds.
respect to the five counts of misappropriation of public
funds, Spaccia asserts we must reverse the two convictions
related to unauthorized loans she received from Bell due to
insufficient evidence. We reject this contention because the
jury could reasonably have concluded she was criminally
negligent by failing to take steps to determine whether those
loans were authorized. Spaccia also asserts that the
instructions given here for all of the misappropriation
counts incorrectly allowed the jury to convict her based upon
her status as a city officer alone, without also requiring
the jury to find that she exercised some material degree of
control over public funds. We agree the instructions were
erroneous in light of People v. Hubbard (2016) 63
Cal.4th 378 (Hubbard), a decision issued after
Spaccia's trial, clarifying the scope of Penal Code
section 424. Furthermore, we cannot say the error was
harmless beyond a reasonable doubt. Accordingly, we reverse
the five convictions for misappropriation of public funds in
counts 3, 4, 10, 12 and 13.
Spaccia contends the conflict of interest conviction based on
her involvement in changing Bell's pension plan must be
reversed because the plan is not a contract within the
meaning of Government Code section 1090. Instead, she argues
the pension plan is a form of deferred compensation incident
to her employment with Bell, and because she was convicted of
conflicts of interest in relation to her employment contracts
in counts 4, 5, and 6, she cannot be convicted in count 2 for
making the same employment contracts. We affirm the
conviction on count 2 because amendments to the pension plan
effectively modified the terms of Spaccia's employment
with Bell, and therefore constituted the making of a contract
within the meaning of Government Code section 1090.
with respect to sentencing, Spaccia contends the abstract of
judgment erroneously states she is required to serve her
sentence in state prison due to a current or prior conviction
for a serious or violent felony (Pen. Code, § 1170,
subd. (h)(3)). The People concede the point, and we direct
the court to correct the abstract of judgment.
information dated October 3, 2013,  the People charged
Spaccia with 13 counts related to the Bell public corruption
scandal: one count of conspiracy to misappropriate public
funds, in violation of Penal Code section 182, subdivision
(a)(1) (count 1); four counts of conflict of
interest, in violation of Government Code sections 1090 and
1097 (counts 2, 5, 6 and 7); six counts of misappropriation
of public funds in violation of section 424, subdivision (a)
(counts 3, 4, 10, 11, 12 and 13); and two counts of unlawful
secretion of an official record in violation of Government
Code section 6200 (counts 8 and 9). The information alleged
that the losses for counts 3 through 7, and 11 through 13,
exceeded $1, 300, 000 (§ 12022.6, subd. (a)(3)), and
involved theft of more than $100, 000 (§ 1203.045, subd.
acquitted Spaccia on count 8 and the court declared a
mistrial as to count 11, after finding the jury was
hopelessly deadlocked on that count; the court later
dismissed count 11. The jury found Spaccia guilty of the
remaining counts and found all allegations true.
court sentenced Spaccia to an aggregate determinate term of
11 years and eight months. The court selected count 4 as the
base term and imposed the upper term of four years. (§
424, subd. (a).) For counts 3, 10, 12, and 13, the court
imposed a total of four years-one-third the midterm of three
years for each count-to run consecutive. (§ 424, subd.
(a).) The court imposed eight months for count 2-one-third
the midterm of two years-to run consecutive. (Gov. Code,
§§ 1090, 1097.) For counts 5, 6, and 7, the court
imposed the midterm of two years, to run concurrent. (Gov.
Code, §§ 1090, 1097.) For counts 1 and 9, the court
imposed the midterm of three years, to run concurrent.
(§ 182, subd. (a)(1); Gov. Code, § 6200.) Finally,
the court imposed an additional three years for the high
value property enhancement, to run consecutive. (§
12022.6, subd. (a).) Spaccia was ordered to serve her
sentence in state prison pursuant to section 1170,
subdivision (h)(3), due to a current or prior serious or
addition to a restitution fine ($2, 200), a court assessment
($440), and a conviction assessment ($330), the court imposed
a victim restitution order under section 1202.4, subdivision
(f), in the amount of $8, 254, 776.
City of Bell is a small city in Los Angeles County. In 2006,
Bell became a charter city; prior to that time, it was a
general law city. Robert Rizzo was Bell's Chief
Administrative Officer during the entire period relevant
2002, Spaccia began working for Bell as a consultant. In
2003, Rizzo invited her to take a full-time employee position
as Assistant to the Chief Administrative Officer. Initially,
Spaccia was Bell's fiscal officer. Rizzo assigned Spaccia
to mentor Lourdes Garcia so that she would eventually take
over that position. Garcia had a long history with Bell; she
started as an account clerk and worked her way up to director
of administrative services. Due to a personality
clash between Garcia and Spaccia, Rizzo reassigned Spaccia in
2005 to handle special projects, including budgeting, audits,
and Bell's annual financial reports. In 2007,
Spaccia's title changed from Assistant to the Chief
Administrative Officer to Assistant Chief Administrative
Officer, but her job responsibilities did not change. In
2010, Rizzo removed Spaccia from Bell entirely and assigned
her to work in the City of Maywood. The city council
terminated Spaccia's employment in July 2010.
her employment at Bell, Spaccia took several extended leaves
of absence to care for family members and to recover from
surgeries she underwent for back problems. Spaccia was fully
paid during her absences, and was not required to take sick
or vacation leave.
Spaccia's first assignments at Bell was to create a new,
supplemental pension plan. Spaccia worked with Alan
Pennington, an actuary and pension fund specialist at a
subsidiary of Wells Fargo. Although he dealt almost
exclusively with Spaccia, Pennington understood Rizzo was the
decision maker, and Spaccia was the messenger, regarding the
new pension plan.
time, non-safety employees of Bell were eligible for a
pension benefit through CalPERS, which provided 2 percent of
salary per year of service, starting at age 55. Rizzo wanted
the new plan to provide an additional 1 percent benefit, for
a total retirement benefit of 3 percent of salary per year of
trial, Pennington explained that certain pension plans are
subject to an income cap pursuant to ERISA. The amount of
the income cap is set by the Internal Revenue Service (IRS)
on an annual basis, and employers must observe the cap so
that their contributions to the plan qualify for favorable
tax treatment. The income cap is changed annually, and ranged
between $200, 000 and $260, 000 during the time Pennington
worked with Bell. The effect of the income cap is to limit
the amount of benefit an employee can receive to a maximum,
calculated with reference to the income cap. In other words,
an employee would receive a retirement benefit equal to 2
percent of his or her salary per year of service, based
either upon a percentage of the employee's actual salary
at the time of retirement or a percentage of the income cap
amount, whichever is lower. As a result of the income cap,
the pension benefit received by high income employees could
be less than the targeted percentage of their
2003, when Spaccia and Pennington were creating the new
pension plan, the only person impacted by the income cap was
Rizzo. However, Rizzo was adamant that he receive a full 1
percent pension benefit from the new pension plan. In order
to provide that benefit, Pennington proposed the creation of
two sub-plans within Bell's new pension plan. The first,
to be called the supplemental plan, was a qualified plan
subject to the income cap, which provided a 1 percent
benefit. Employees whose income did not exceed the cap would
receive the targeted benefit of an additional 1 percent of
their salary. The second plan, to be called the replacement
plan, was a non-qualified plan, designed to provide only high
income employees with an additional benefit that would bring
their total additional pension benefit to 1 percent-i.e., it
would replace that portion of the 1 percent benefit
eliminated by the supplemental plan's income cap. The
city council adopted the supplemental and replacement pension
plans on June 30, 2003.
both the income cap and Rizzo's salary changed annually,
it was necessary to adjust the formula used to calculate the
replacement benefit periodically to guarantee Rizzo a total
benefit equal to 1 percent of his salary. Over the years,
Spaccia and Pennington communicated regularly about these
calculations. Changes to the pension plan were presented to
and adopted by the city council by resolution.
Spaccia's salary also exceeded the IRS income cap, and
she too was eligible for the replacement plan. Her 2008
employment contract explicitly noted her eligibility for the
replacement pension plan. Spaccia's communications with
Pennington show she was well aware she would receive the
replacement pension plan benefit.
2004, Spaccia told Pennington that Rizzo wanted to limit the
number of participants potentially eligible for benefits
under the replacement plan. She instructed Pennington to
develop some limitations to the plan so that only she and
Rizzo could receive the benefit. The proposed amendments
closing the replacement plan to new participants and
requiring participants to have certain dates and years of
service were later approved and adopted by the city council
estimated that Bell would need to contribute more than $15
million to fund the replacement plan.
contracts for Rizzo and Spaccia Compensation
Spaccia first began working at Bell, employment contracts
were prepared by Bell's outside counsel, Edward Lee. In
2005, however, Rizzo directed Spaccia to prepare employment
agreements for all executive and administrative management
employees. She understood that Rizzo planned to submit the
2005 agreements to the city council for approval, together
with the five-year budget she was preparing for their review.
Rizzo told Spaccia, as well as Garcia, that the 2005
agreements had been approved by the city council.
employment contracts and subsequent amendments Spaccia
prepared provided her, as well as Rizzo, with substantial
Spaccia was initially hired as a full-time employee on July
1, 2003, her contract provided a base salary of $3, 935 per
two week pay period, or $102, 310 annually. Pursuant to the
agreements and amendments she prepared, Spaccia's salary
rose steadily each year. At the time her employment was
terminated in 2010, Spaccia earned a base salary of $13, 192
per two week pay period-more than $340, 000 annually. At
trial, Spaccia acknowledged her salary and benefits were
salary also increased substantially during this period,
rising from $9, 615 per two week period in 2002
(approximately $250, 000 annually) to $27, 048 per two week
period in 2010-more than $700, 000 annually.
said Rizzo and Spaccia had the highest government salaries he
had ever seen.
virtue of their employment contracts and amendments, as well
as resolutions adopted by the city council, Spaccia and Rizzo
also received significant fringe benefits which, like their
salaries, increased substantially over time.
example, in 2006, the third amendment to Spaccia's
employment contract provided that Bell would fund
Spaccia's retirement savings plan in the maximum
allowable amount. The City paid between $33, 000 and $44, 000
per year to provide this benefit to Spaccia. Rizzo received
the same benefit.
respect to leave accruals, Bell also provided a substantial
benefit. When Spaccia was originally hired, she accrued
vacation and sick leave commensurate with her years of
employment at Bell, i.e., as a new employee. In 2005,
however, the second amendment to her contract provided she
would accrue vacation leave commensurate with her years of
PERS service credit. As a result, she accrued vacation based
upon 15 years of service rather than two years of service-a
significant increase. Over time, the city council also
approved resolutions that substantially increased vacation
and sick leave accruals for Spaccia and Rizzo. At times,
Rizzo and Spaccia each received two paychecks-one for their
base salary and the other for the cash value of accrued
vacation and sick leave. By 2008, Spaccia and Rizzo were
earning 33 hours of vacation leave every two weeks.
City also provided increased benefits by purchasing five year
PERS service credits for Spaccia, Rizzo, and other senior
Bell managers. The purchase of an additional five years of
service credit provided employees with increased retirement
and leave benefits, to the extent those benefits were
calculated using years of service.
2008 contract also provided that Bell would pay her portion
of FICA and Medicare withholding. Eventually, Bell also paid
Spaccia's share of the required CalPERS contributions.
Rizzo received similar increases and benefits.
2002, the city council authorized an $80, 000 loan from Bell
to Rizzo. As discussed in greater detail post, Rizzo
took several additional loans from Bell (without approval
from the city council), which he opted to repay using the
cash value of his accrued sick and vacation leave. He later
expanded this “loan program” to include other
employees as well as city council members. Spaccia received
six purported loans from Bell, including $77, 500 in 2003,
$100, 000 in 2009, and $130, 000 in 2010.
contract for Randy Adams
2009, Rizzo decided to hire a new police chief to improve
Bell's police department. Spaccia knew Randy Adams
because they worked together for approximately 10 years in
the City of Ventura. Adams had a long career in law
enforcement and was both well established and well regarded.
He had been the Chief of Police in Simi Valley and Glendale.
Rizzo asked Spaccia to contact Adams to see if he would be
interested in moving to Bell. Adams met with Rizzo and
several council members to discuss the possibility, and he
eventually agreed to work for Bell.
the course of several months, Spaccia met and corresponded
with Adams about his salary and benefits package. Adams
demanded a high salary because he had planned to retire; to
make it worthwhile to work instead of retiring, he asked Bell
to pay him the amount of the pension he would have received
if he retired in addition to a salary commensurate with his
experience. The City ...