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Louis J. Cella, the Santa Ana physician who was the state’s largest individual political donor in the 1970s and significantly shaped Orange County politics before going to prison for tax and Medicare fraud, has died, the Los Angeles Times is reporting. He was 87.
The Times article states he died Nov. 7 following “a long neurological illness” in Palm Springs, where he lived after he was released from prison.
During his years as a powerbroker, Cella could keep an eye on the collected offices of several of the men he helped elect to county posts from his medical office across the street from the Orange County Civic Center.
The Cella case unfolded during a tumultuous era in Orange County politics in the 1970s, when more than 40 public officials and their aides were indicted. Among them were three county supervisors who were recipients of Cella’s largesse: Robert W. Battin, who was convicted for using his county staff to support an unsuccessful 1974 campaign for lieutenant governor; Ralph A. Diedrich, who was found guilty of bribery and conspiracy to commit bribery; and Philip L. Anthony, who was convicted of laundering campaign funds.
Others owed their political beginnings to Cella. One was former Orange County Treasurer Robert Citron, who in 1994 presided over the county’s bankruptcy, at the time the largest municipal bankruptcy in U.S. history. Another was Paul Carpenter, former state senator and Board of Equalization member.
Carpenter, a Democrat from Cypress, was director of the county health planning organization when Cella began supporting him. In 1993 Carpenter was indicted on federal obstruction of justice and money laundering charges.
More from the Times article:
Cella was the state’s largest political campaign contributor in 1974, when he lent and donated more than $500,000 to 60 candidates and causes in that year’s primary and general elections. The recipients included many top local and state officeholders of the 1970s, including Controller Kenneth Cory, Gov. Jerry Brown, Lt. Gov. Mervyn Dymally and Secretary of State March Fong Eu. Cella mainly supported Democratic candidates even though he was registered as a Republican.
Among Republicans backed by Cella was former county Supervisor Larry Schmidt. He also helped found and run two Orange County hospitals, Mission Community in Mission Viejo and Mercy General in Santa Ana.
But the source of Cella’s supposed wealth was a mystery. A 1975 Los Angeles Times investigation sought to trace its origins.
Former LA Times investigative reporter Richard O’Reilly recounted in an email to Voice of Orange County:The more we dug the more it was clear he didn’t have that kind of money to give. His medical practice was small. He was one among scores of investors in his hospitals, and they were heavily indebted.
Rumors that his wife was heiress to an Italian banking fortune were proved false when a trip to Providence, R.I., to trace the couple’s history revealed that her father had been the elevator operator in the state Capitol for decades.
As each source of wealth evaporated we were left with the real answer: he was essentially stealing it from the taxpayers through Medicare and Medi-Cal fraud in the form of inflated hospital costs to cover his political contributions.
One irony was that he hadn’t filed an income tax return in several years.
Cella and three associates were indicted on 171 federal felony counts of misusing about $2 million in hospital money for political and personal purposes. He was convicted in June 1976 on 22 counts of conspiracy, tax evasion and Medicare fraud and sentenced to five years in prison.
Two years later, he pleaded guilty to 10 state felony charges, was ordered to pay a $50,000 fine and was sentenced to two state prison terms that were concurrent with his federal sentence.
From the Times article:
Political analysts later cited the wave of scandals and convictions of Democratic office-holders as a major factor in the downfall of Orange County’s Democratic Party. Another factor was the loss of Cella as the party’s richest funding source.
— TRACY WOOD
Editor’s note: Tracy Wood, then an investigative reporter for the Los Angeles Times, teamed with Richard O’Reilly to conduct the Times’ investigation of Cella.