Listen to the audio story from Annenberg Radio News:
Years of fraud and mismanagement of the Los Angeles Memorial Coliseum have finally boiled over, resulting in an audit by Los Angeles City Controller Wendy Greuel.
The audit comes in the wake of an investigation of several officers of the Los Angeles Memorial Coliseum Commission, including the former General Manager of the stadium, Patrick Lynch.
“What’s clear is that the management controls over the Coliseum spending were weak, or nonexistent,” Greuel said Thursday morning, “resulting in millions of dollars in wasteful spending, fraudulent activity, and misuse of funds.”
Greuel says the largest example of such fraud occurred when Lynch issued hundreds of thousands of dollars in advanced payments to South American companies to have five Uruguayan all-star soccer teams play at the Coliseum.
“Despite paying more than $870,000 in unreturned deposits, none of these events ever occurred,” said Greuel, “and no contracts were ever formally approved by the commission board.”
So if the games never took place, what happened to all the money?
Controller Greuel explained, “More than $75,000 in bonuses were paid to employees outside of the city’s payroll system that were filed improperly to the IRS.”
Lynch even managed to give himself the maximum bonus of $125,000 from 2007 to 2010, despite the Coliseum’s declining profitability. The Coliseum took a financial hit when it dropped four rave concerts popular among USC students.
“The average rent for the four most prominent raves held at the Coliseum declined significantly while those same events’ gross ticket sales increased significantly. They made a lot of money, those festivals,” said Greuel, “The Coliseum did not.”
With such public mismanagement damaging the commission’s reputation, USC could possibly take advantage and throw its hat in the ring for Coliseum ownership. The university has been trying to own the coliseum for years. Greuel isn’t sold on the notion, but knows that some sort of change is a must.
“I don’t know all the details of the USC deal,” Greuel said. “I think what is clear is that the current structure of the Coliseum Commission doesn’t work and that we need to look at other alternatives. Everything should be on the table.”
Controller Greuel may be unsure of the Coliseum’s future, but there is one thing she is sure of: As long as she is City Controller, a crime like this will never happen again.