VERNON — The troubled city southeast of downtown Los Angeles survived the efforts of Assembly Speaker John Pérez to disincorporate it Monday when the state Senate voted 17-13 against Assembly Bill 46.
State Sen. Kevin de León, D-Lincoln Heights, who represents Vernon in the Senate, led the fight against Pérez’s measure.

“Today’s vote in the Senate on AB 46 was one step in a process,” de León said in a statement issued by his office. “While I am exceptionally happy that tens of thousands of jobs were spared the ax, the saga of Vernon will not be complete until the city follows through on its commitment to implement the aggressive reforms I [have] proposed. I am seeking permanent and lasting reform in that city, and justice for its long-suffering, neighboring communities. It is now up to Vernon and all eyes are watching.”

The Vernon Chamber of Commerce was pleased with the Senate’s action.

“We are extremely pleased and grateful that the Senate rebuffed Speaker Pérez and his ill-conceived legislation that threatened tens of thousands of California jobs and businesses,” chamber President Marisa Olguin said. “If passed, AB 46 would have resulted in the loss of 11,620 California manufacturing jobs. We applaud and support those senators who took the brave stand against the speaker and his tyrannical methods.

“The Vernon Chamber and its business leaders believe that fixing Vernon through substantive reforms is the answer instead of a disincorporation or annexation.”

Pérez was disappointed in the defeat of his legislation and scolded de León and state Sen. Ron Calderon, D-Montebello, for leading the fight against his bill.

In a statement, Pérez accused the Senate of ignoring “decades of corruption in Vernon.”

“The fact is clear,” his statement continued. “Senators Calderon and de León, along with their colleagues, have given Vernon a free pass to continue doing business as usual, and those senators will own the responsibility for any misdeeds that may occur in the future.”

Calderon defended his vote. While acknowledging the chronic corruption inside Vernon City Hall, Calderon said: “Vernon should not be burned to the ground like some biblical city. The sins of past city officials should not be visited upon the tens of thousands of workers, many of whom are union members, whose jobs were put at risk because of SB 46.

“I stood up for the workers of Vernon and their families and I am proud of it. No amount of pressure will make me turn my back on these hard-working men and women.”

De León also acknowledged Vernon’s troubled past and called for a state audit on the city’s power utility. He sent a letter to the Legislature’s Joint Legislative Audit Committee requesting that it hold an emergency meeting next week to consider the request.

The senator said a recent story in the Los Angeles Times said the Internal Revenue Service is auditing more than $400 million in tax-exempt bonds issued by the city in 2009. The probe probably focuses on whether the city’s use of bond proceeds violated restrictions on tax-exempt debt. If the bonds are deemed taxable, the government could demand millions of dollars in unpaid taxes.

“The city of Vernon’s finances have been called into question and the public is entitled to a thorough and transparent review of those finances. The public is also entitled to more knowledge about the management and compensation of the city’s utility,” de León said. “The era of self-dealing in Vernon is over and this audit will help ensure that happens.”

Vernon has come under fire after several officials have been convicted of corruption in recent years.

The latest was former City Manager Donal O’Callaghan, who pleaded guilty in July to a felony conflict of interest charge for hiring his wife as a city bookkeeper. O’Callaghan was sentenced to probation and community service and later received a $500,000 payment from the city to settle his contract.

City officials also have paid out millions of dollars to private firms with ties to their relatives, paid themselves exorbitant salaries and offered city-owned housing to family and friends at below-market rates.