The Guss Report — A week ago, the Los Angeles Times followed up on a story I broke a week earlier in CityWatch regarding the severe personal financial troubles of Los Angeles City Council President Herb Wesson.
David Zahniser, the Times’ veteran City Hall reporter, indicated in his article that Mr. Wesson refused to be interviewed but instead submitted a prepared statement via his media flack, who wrote, “Wesson attributed the problems to the home he and his wife bought for $759,000 …”
The home he refers to was purchased by Mr. Wesson and his wife, Fabian, in 2007. It is l on Virginia Road in the City of Los Angeles’s Council District 10 that Mr. Wesson has represented since his 2005 election. For clarity, let’s refer to that property as “Virginia Road/L.A. City.”
While Mr. Wesson may attribute his current multiple mortgage defaults and other financial problems to that purchase, his money troubles go back not years, but decades, even though he earned a consistent and generous government paycheck in various managerial and elected positions:
- In 1993, the Wessons defaulted on a mortgage for their house on Roberts Avenue in Culver City (“Roberts Ave./Culver City.”) The loan was from Avco Financial Services, a high risk, high interest rate lender that since has become a leader in the payday loan industry.
Coincidentally, a senior Avco executive described the company to me as, at that time, a “lender of last resort for people who cannot get a loan elsewhere,” meaning that by borrowing from Avco, Mr. Wesson’s money problems are traceable to at least the 1980s.
Mr. Wesson had bought Roberts Ave/Culver City for $153,000 in 1988, but took a huge loss in 1993 when it sold for just $60,000. A year and a half later it got flipped for $168,000. Today it is valued at nearly $850,000. What does that tell you?
And that isn’t the biggest red flag here.
The default that triggered Mr. Wesson’s costly loss took place on the same day as its sale, Nov. 24, 1993, which is also the day that he purchased a much pricier ($425,000) home on Bedford Avenue in Ladera Heights, an unincorporated area of L.A. County. Let’s call that property “Bedford Avenue /L.A. County” so it is understood that it, like the property on Roberts Avenue, is not within the City of Los Angeles.
- In 1995, the Wessons defaulted on Bedford Avenue /L.A. County, but narrowly avoided a scheduled foreclosure sale. Their overdue $21,086.06 indicates that payments were rarely, if ever, made to that point.
During the years of these first two defaults, Mr. Wesson earned a comfortable living as the chief-of-staff for Los Angeles City Councilmember Nate Holden and as chief-of-staff for Los Angeles County Supervisor Yvonne Burke. This is according to Mr. Wesson’s unreliable Wikipedia page which, in one section, incorrectly says he was elected to L.A. City Council on July 1, 2005, while in another section it correctly says he was elected on Nov. 8, 2005 in a special election to replace future felon Councilmember Martin Ludlow who suddenly resigned after only two years in office.
- In 2002, the Wessons defaulted once more on Bedford Avenue/ L.A. County, but again avoided a foreclosure sale for being in arrears to the tune of $34,619.45. This is while serving as an elected member of the state Assembly, where he later became its powerful Speaker, holding great sway over the state’s budget and economic health.
None of these earlier defaults was mentioned in Mr. Zahniser’s article, which focused exclusively on the Wessons’ defaults that took place after their late-2007 purchase of Virginia Road /L.A. City.
Also missing from his Times article are the massive federal and state tax liens that hit the Wessons after their purchase of Virginia Road /L.A. City in 2008-2009 and 2011-2012 totaling nearly $100,000 in taxes, interest and penalties for income earned during Mr. Wesson’s first four years (2005-2008) on City Council, either from salaries or other sources of income.
Still, Mr. Wesson is a deft politician. He now rakes in a combined annual household income in the hundreds of thousands of dollars, while sidestepping mortgage foreclosures that continue to hound him as recently as a few weeks ago, as detailed in Mr. Zahniser’s and my articles. Last year, he finagled a 17-month extension of his final term on City Council (and those of some of his colleagues) which also pads their public pensions by thousands of dollars, with a voter-turnout maneuver described by his former Council rival and fiscal hawk Bernie Parks as “a gimmick.”
And here the story takes an odd, possibly perjurious turn.
(To be continued)
Mr. Guss, MBA, is a writer who contributes to CityWatchla.com, Huffington Post, KFI-AM 640 and elsewhere. He blogs on humane issues at http://ericgarcetti.blogspot.com/.
