VERNON, Calif. — Vernon is a bleak, 5.2-square-mile sprawl of warehouses, factories, toxic chemical plants and meat processors that looks like the backdrop for “Eraserhead,” the David Lynch movie set in an industrial wasteland. It has a population of 95 — and 1,800 businesses, drawn by low taxes, lax regulations and cheap municipal power.

It also has a history of corruption and public malfeasance going back nearly 50 years.

But now, this industrial city two miles southeast of downtown Los Angeles is fighting for its very survival.

Vernon has become the center of a vast and costly power struggle, as state officials have embarked on an extraordinary campaign to legally abolish the city and make it part of Los Angeles County. John A. Pérez, the Democratic speaker of the State Assembly, is the chief sponsor of legislation to disincorporate Vernon. He described it as a shell city created to enrich municipal officials and businesses at the expense of the struggling, lower-middle-class communities that surround it.

“I have been frustrated with Vernon for a long time,” Mr. Pérez said, while driving the streets of this city, which is in his district. “How bad a neighbor it’s been. How shady its practices have been. And the more I looked at it, the more I realized this was really the center of tremendous corruption.”