"How could this have happened?" The question still lingers among officials and residents of the small southern California town of Bell. Corruption is hardly an isolated challenge to the governance of America's cities. But following decades of benign obscurity, Bell witnessed the emergence of a truly astonishing level of public wrongdoing--a level succinctly described by Los Angeles District Attorney Steve Cooley as "corruption on steroids." Even discounting the enormous sums involved--the top administrator paid himself nearly $800,000 a year in a town with a $35,000 average income--this was...