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Bankruptcy Filings By Gilroy Candidates Concern Some Voters

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(Clockwise from left) Gilroy mayoral candidates Peter Arellano and Dion Bracco, City Council candidate Rebeca Armendariz, and Gavilan College Trustee candidate Rochelle Arellano. (CBS)

(Clockwise from left) Gilroy mayoral candidates Peter Arellano and Dion Bracco, City Council candidate Rebeca Armendariz, and Gavilan College Trustee candidate Rochelle Arellano. (CBS)

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GILROY (CBS 5) — Four candidates who are running for political office in the city of Gilroy this November have filed for bankruptcies in the past, according to a published report.

The bankruptcy filings have left some residents wondering how the candidates would be able to manage the city’s financial affairs if elected.

“I find that terribly distressing,” said voter and antique shopkeeper Gracie Garcia. “It says to me that they are not really good managers with their money.”

“I think the community wants someone that they can trust responsibly and financially,” said Cirilo Lopez, also a Gilroy voter.

According to the Gilroy Dispatch newspaper, City Councilmember and mayoral candidate Peter Arellano filed for Chapter 7 bankruptcy in 2004, listing debts to 22 creditors. His ex-wife Rochelle Arellano, who was also listed in the bankruptcy filing, is now running for Gavilan College Board of Trustees.

Peter Arellano did not respond to CBS 5’s request for comment. But Arellano, who is also a Kaiser Permanente physician, told the Dispatch, “there are many people who are American heroes or respected individuals who filed for bankruptcy in the past…” He cited as examples Mark Twain, Olympian Dorothy Hamill, and businessman Donald Trump.

Councilmember Dion Bracco, also a candidate for Gilroy mayor, filed for Chapter 7 bankruptcy more than 20 years ago. Because the bankruptcy happened so long ago, the records have been purged. Bracco has said he learned his lesson about finances and that he will “try to spend the city’s money as if it were my own.”

Bracco said in a statement, “My bankruptcy was in 1988, 25 years ago. Since then, I have built a successfully business, was elected to council seven years ago. So judge me on what I have done while on council, not on what happened 25 years ago.”

City Council candidate Rebeca Armendariz is about to clear a ten year old bankruptcy from her credit history. Armandariz, a union organizer for SEIU, filed for Chapter 7 bankruptcy in 2003 listing debts to eight creditors.

Armendariz told CBS 5 she was in her 20s at the time and ran into financial difficulties. The candidate said the experience left her a better money manager. Armendariz said she now has only one credit card to her name.

Armendariz doesn’t believe the filing will affect how she performs in office if elected. In fact, Armendariz said the lessons learned will help in her public service.

“I think I can still represent Gilroyans well. I think they can relate to me better,” Armendariz said. “I’ve learned things the hard way, like some of us do.”

Mayoral candidate Don Gage, who has not had a bankruptcy, told CBS 5 timing is everything. “If it something that happened a year ago, I would have a great deal of concern. And I think the voters would too,” Gage said.

Gage said he won’t condemn his competitors for something that happened in the distant past that had been corrected.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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