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  • ISSUE: Audits are out … DWP Nonprofits Spent Freely with Little Oversight

    Jack Dolan

    DWP trusts paid millions to vendors without competitive bids and let managers use trust-issued credit cards. 

    Trusts have received more than $40 million from ratepayers. 

    A controversial pair of nonprofit trusts, created by the Los Angeles Department of Water and Power and financed with more than $40 million from ratepayers, doled out millions to vendors without competitive bids and let managers use trust-issued credit cards to buy gas for their personal vehicles and travel without filing expense reports, according to a city audit released on Thursday.

    The nonprofits, which were created in the early 2000s to promote safety and training at the massive city-owned utility, have also failed to provide any "real information on the outcomes or effectiveness" of their efforts, according to the audit by City Administrative Officer Miguel Santana. (Here’s the rest of the Times story.) 

    ● Here is Controller Ron Galperin’s audit.   




Ouch! Jon Stewart skewers NY Times’ Judith Miller

Whoa! Leaked report on Freddie Gray’s death blames Freddie

 

 

 

 

  

 

 


Passing the Buck

The Buck Stops Here

Most men in the early west carried a jack knife made by the Buck Knife Company.  When playing poker, it was common to place one of these Buck Knives in front of the dealer so that everyone knew who he was.  When it was time for a new dealer, the deck of cards and the knife were given to the new dealer.  If this person didn't want to deal, he would "Pass the Buck" to the next player.  If that player accepted, then "the Buck stops here".

 


 

 

Asia on $30,000 a Day

LA WATCHDOG - Our peripatetic mayor is now on an 11 day, $295,000 junket to China, Japan, and South Korea designed to build and nourish important relationships with the movers and shakers so as to “increase investment, trade, and tourism” in the City of Los Angeles.  This “trade mission” is being financed by the Port of Los Angeles and the Los Angeles World Airways (“LAWA”), two of the City’s three proprietary departments. While there is no doubt that the commercial relationships with these Pacific rim countries are very important to the well being of Los Angeles and its economy, is this an appropriate use of the resources of the Port and LAWA?  Are they the sole beneficiaries of this expedition?  Are first class travel, luxury suites, and sumptuous dinners appropriate given the dire conditions of the City’s finances?  And are these type of expenditures even permitted under the travel policies of these two proprietary departments?

But the inappropriate use of LAWA funds by the City is nothing new.  In the past, LAWA funds have been diverted to help balance the City’s budget and fund the City’s marketing efforts.  On Sunday, the Los Angeles Times revealed that the Federal Aviation Administration is reviewing a complaint filed by the Los Angeles Airport Peace Officers Association that the Los Angeles Police Department is seriously overcharging LAWA for police services, a clear violation of federal law and Proposition 26. (Link)

The utter disregard for the appropriate use of government funds appears to be rampant.  Just this weekend, KCET’s award winning show, SoCal Connected, revealed that massive expense account abuse is still rampant at the Housing Authority of the City of Los Angeles (“HACLA”). (Link) This included over $14,000 spent at Harold & Belle’s Creole Restaurant, one of Herb Wesson’s favorite watering holes, and the beneficiary of a highly questionable $2.6 million loan to finance the son’s leveraged buyout of his family’s business.

And while the City was digesting this fraud, the Los Angeles Times disclosed that HACLA’s politically appointed Board of Commissioners quietly approved a $1.2 million severance package for Rudy Montiel, the former head of HACLA who was sacked back in March.  This agreement also has a clause that neither party will disparage the other.  However, that might be very difficult since HACLA may be under criminal investigation.  

Of course, the real sin is that these abuses are surely an indication of a mismanaged and corrupt organization that is failing to serve those that are least able to help themselves.

But there is another good reason why the Mayor Who Broke LA left for Asia.  

On December 2, the City Administrative Officer released the Second Financial Status Report which revealed that the City is projecting a $72 million deficit for the current fiscal year that ends on June 30, 2012.  Underlying this projected deficit is higher than budgeted personnel expenses related to the Fire Department, Workers Compensation, and retiree healthcare, issues which should have been addressed through the development of a long term operational and financial plan that is standard operating procedure for any $7 billion organization.

This report also stated that the Four Year Outlook has not changed, meaning that next year’s budget gap will be in the range of $250 million and that the four year cumulative deficit will be in the range of $1 billion as personnel costs will increase by $750 million.

No doubt a smiling Mayor Villaraigosa will return from Seoul, the last stop on his trip, with plenty of great news on how this trade mission will benefit Los Angeles and its economy and create numerous jobs.  

But while the Mayor is gallivanting around the world and no doubt indulging in the world’s finest wines, he and the City Council have failed to address the ever increasing corruption in our City, its inefficient operations and out of control personnel expenses, its deteriorating infrastructure, its underfunded pension plans, its bureaucracy that is trashing local businesses, and its impending financial crisis.

We are in for one horrible hangover.

(Jack Humphreville writes LA Watchdog for CityWatch He is the President of the DWP Advocacy Committee and the Ratepayer Advocate for the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler -- www.recycler.com. He can be reached at:  lajack@gmail.com) –cw

Tags: Asia, Asia trip, Mayor’s Asia trip, Mayor Villaraigosa, Herb Wesson, LAWA, Port of LA, Rudy Montiel, Jack Humphreville, HACLA, Los Angeles Airport Peace Officers Association







CityWatch
Vol 9 Issue 97
Pub: Dec 6, 2011



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