Controller Greuel’s Coliseum audit reveals fraud and mismanagement

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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.

Greuel addresses government waste at Urban Issues Forum

imageLos Angeles City Controller and mayoral candidate Wendy Greuel was the guest speaker of the first Urban Issues Breakfast Forum of 2012 held this morning, hosted by Dr. Anthony Asadullah Samad. Titled “Moving toward accountable Government. Who are the real watchdogs,” Greuel was invited to address issues of wasteful spending in the L.A. City government.

Speaking in front of a full house at the West Angeles Church on Crenshaw Blvd., Greuel, who has been City Controller since July of 2009, said she found several instances of waste after conducting audits.

“For example, I found out the City owns 12,000 cell phones and no one knew where they all were,” she told the crowd. “I found that LAPD had 500 cell phones in a cabinet that were not being used and we were paying for them… I identified over $1 million dollars that were being wasted.”

imageGreuel listened attentively as community members lined up to ask her a variety of questions. When one woman told her she had seen a parking lot full of unused police cars collecting dust, the controller promised to look into it. Among the questions askes: what has shocked her most as controller, why she was running for mayor, what she would do about the Crenshaw metro line if she were elected, and if she thought the City Council should have more members to adequately represent constituents.

“What has shocked me the most is that a majority of elected officials didn’t understand the financial side of running a city,” Greuel told the crowd, particularly referring to her 2010 audit of L.A. Department of Water & Power, the municipal utility that tried to hold the City Council hostage by threatening to not transfer millions of dollars to the City if it didn’t approve controversial rate hikes.

imageAs to why she’s running for mayor, she replied: “Nothing comes easy and if you believe, it’s worth taking a risk…. I’m doing it because I think I have the experience to get the job done. In the meantime, I’m going to be the best controller ever.”

Damien Goodmon, of the Crenshaw Subway Coalition, asked Greuel how she would deal with people’s concerns over the impact of an above ground light-rail line on South LA businesses. “We can’t negatively impact businesses…. As mayor, I will work with the community to address the issue and resolve it to best fit the community’s needs,” she assured.

With regards to adding more people to the City Council, she pointed out it was tough enough governing with the current number of members and didn’t think adding more would help better represent constituents. “What you need is a strong mayor that can effectively lead,” she said. “I can be that mayor.”

Controller will launch audit of L.A. Coliseum

Allegations of conflict of interest, poor oversight and requests for questionable pay raises, has prompted L.A. City Controller Wendy Greuel to call for a comprehensive audit of the Los Angeles Memorial Coliseum.

The stadium, home to USC football, is jointly operated by the state, Los Angeles County and the city of Los Angeles.

A press release from Greuel’s office says “The audit assesses internal and management controls regarding financial decision making and reviews the Coliseum’s financial operations from 2009 to present.”

Greuel decided to start the audit after getting a request from an “office manager” to increase the salary of 20 of the department’s 32 employees, including a $25,000 pay hike for the Coliseum’s finance director.

“This request raises many red flags,” stated Greuel. “Given the allegations of conflicts of interest and misuse of public funds, I find it hard to believe that officials at the Coliseum think this would be an appropriate request. It begs for us to review the Coliseum’s books with greater scrutiny.”

According to the L.A. Times, Coliseum Commission President David Israel said he rescinded the $25,000 salary boost for finance director Ronald Lederkramer (who made about $195,000 last fiscal year), after Greuel raised questions about it last week.

LADOT misses out on $15 million in revenue

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image There are significant issues of waste, and there are financially irresponsible decisions made by the Los Angeles Department of Transportation — at least that’s what City Controller Wendy Greuel found in a recent investigation of the department.

Greuel found that the city missed out on nearly $15 million in revenue this past year. The report that Greuel’s office issued shows the Department of Transportation failed to impound or put boots on three-quarters of vehicles with five or more unpaid parking tickets. The city calls these particular offenders “scofflaws.”

“We believe just slapping another ticket on someone who has 20 tickets, and saying they might pay the ticket now because it’s the 21st ticket, is not a way to do things efficiently,” Greuel said.

The controller’s office said the Department of Transportation didn’t use its License Plate Recognition equipment, which could have caught repeated ticket offenders.

The department’s Interim General Manager Amir Sedadi said they didn’t use it because management decided to shift staff away from enforcing these particular laws. But now, he says that will change.

“I assure you our traffic officers at LADOT will be out there every day, every month, every year using the latest technologies in the fight against scofflaws,” Sedadi said.

Greuel said it was a “goof” not to aggressively punish these offenders.

Report claims gang-related crime has dropped

The mayor’s office received some good news today: it looks like anti-gang strategies like the Summer Night Lights program are working. City Controller Wendy Greuel shared the results of a report that indicated a reduction in gang-related crime in the areas designated to be hubs of gang activity.

The lengthily-titled report, Semi-Annual Follow-up of the Controller’s Blueprint for a Comprehensive Citywide Anti-Gang Strategy, states that gang-related crime has dropped 10.7 percent in the two years since the Gang Reduction and Youth Development program started.

“Controller Greuel’s findings show significant progress on one of our most important initiatives,” said Mayor Antonio Villaraigosa as quoted in a press release. “Now is the time to take that next step in evaluating exactly what programs and what services are causing the drop in gang violence.”

According to the mayor’s office, the Urban Institute has been monitoring the city’s anti-gang efforts for over a year, and will release their findings in a series of reports beginning next month. Greuel, however, has expressed criticism over the amount of tax-payer money dedicated to the Urban Institute and their yet-to-be-published reports. A total of $525,000 has been spent on the evaluation of the GRYD program.

“Our goal is to keep our children out of gangs and onto the right path to a bright future,” said Villaraigosa. “Our GRYD programs are reducing gang violence, radically changing the culture and bureaucracy at City Hall, preventing more people from joining gangs and providing an exit strategy for those already involved. We’re working together to stop the cycle of gang violence that has plagued our city for too long.”

View the designated zones of the GRYD program: