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Los Angeles Quietly Declares a "Fiscal Emergency," Warranting Review of Wide-Spread Criticism of City Controller

Posted: 06/21/2012 3:20 pm

America's second largest city is in crisis. The city's Chief Administrative Officer has warned that Los Angeles is near bankruptcy. Adding credibility to the CAO's warning is the fact that the City Council very recently -- and very quietly -- passed a resolution "Declaring a Fiscal Emergency."


City officials have mismanaged the taxpayer's money. Chief among them is the City Controller. According to the City Charter, the Controller is the chief auditor and general accountant of the city. It is the Controller's responsibility to supervise the accounts of all offices, departments, boards and employees of the city who collect or disburse the city's money.

Because of the recent Declaration of Fiscal Emergency, questions surrounding the work performance of the Controller are warranted.

In exercising her duties, Wendy Greuel's work has created a steady stream of criticism and resulted in questions of competency from community leaders, department heads, the Mayor, City Council, the former Controller, the Chief Administrative Officer, a County Supervisor, a Deputy Mayor and the media. Research reveals that a climate of discontent developed early in the Controller's term and continued throughout her tenure. Now the city is nearly bankrupt.

Proof of the Controller's parade of errors is easy to find. Below are just a few examples, starting with the most recent.

In April 2012, after indictments of Coliseum Commissioners, Greuel audited the Coliseum Commission. In response to Greuel's audit, County Supervisor Don Knabe pointed out in a letter to Greuel that "failures have existed in the Office of the Controller" and that financial abuses could have been avoided if she had used her authority to audit the Coliseum earlier.


In April 2012, Council members questioned Greuel's ability to conduct her own audit of Fire Department response times by voting to commission an outside audit of the response times, and stated that "there is a limit to fire and emergency services expertise in the controller's office."


In March 2012, City Hall blogger and former Los Angeles Daily News editor Ron Kaye accused Greuel of doing little more than a rewrite of an old Laura Chick audit of fuel usage in the city. Kaye stated that "some might call it plagiarism since Greuel doesn't mention or cite Chick's audit on the same subject three years earlier."


In February 2012, the Los Angeles Times called out Greuel, along with other officials, for doing a "poor job" at "recouping about a half a billion dollars that [the City] is owed," pointing out that these same officials ignored the recommendations of their own Commission on Revenue Efficiency they created to find ways to improve debt collection.


In December 2011, CBS2 News reported that Greuels' predecessor, Controller Laura Chick, "blasted Greuel for not taking stronger action after 'SoCal Connected' first reported on questionable spending at HACLA in March."


In December 2011, in response to Greuel's audit of the L.A. Housing Authority, LA Weekly reporter Simone Wilson pointed out that Greuel was "late to the party" adding that "it's been almost a year since local station KCET first revealed rampant credit-card misuse by former HACLA CEO Rudy Montiel. And it's almost two weeks since KCET dropped the second half of its two-part HACLA investigation on similar overspending by his underlings, again scooping the vast majority of Greuel's work." LA Weekly adds that "it's a little pathetic for her to equate her powerlessness with that of a brushed-off L.A. reporter -- when in the end, it's the City Controller's job to duck under the media tape and kick some executive ass."


In November 2011, in response to Greuel's audit of funds transferred to the city by the Community Redevelopment Agency for upcoming projects, a CRA spokesman said that the agency "strongly disagree[d] with the characterizations in the audit."


In May 2011, Controller Greuel released an audit on the city's "Gold Card Desk" where city politicians and their staffs improperly obtained dismissals of over 1,000 parking tickets. Greuel claimed she was unaware of the Gold Card Desk. Within hours, Mayor Villaraigosa's office released documents indicating that Greuel, who had chaired the council's Transportation Committee, voted to renew the contract of the company that maintains the program and had been briefed on its operations. "As chair of the City Council's Transportation Committee then-Councilmember Greuel was briefed on all aspects of the department's operations and was fully aware of the Gold Card Desk," according to the Mayor's spokesperson.


In September 2010, results from Greuel's audit of hundreds of millions of dollars of American Reinvestment and Recovery Act job creation funds were "sharply different" from Chief Administrative Officer Miguel Santana's numbers on the same ARRA funds.


In June 2010, there was a highly publicized dispute surrounding Greuel's audit of the DWP in which she examined a fight in April 2010 between the DWP and the City Council over a rate hike and a transfer of funds from the DWP to the City's general fund. The interim chief of the DWP at the time cited errors from an early reading of Greuel's audit.


In May 2010, Sanitation Department head Enrique Zaldivar pointed out to KABC Channel 7 that two sophisticated, expensive pieces of equipment that Greuel's audit claimed were missing were "right where they were supposed to be." KABC confirmed that major equipment that Greuel claimed was missing wasn't missing at all.


And now Controller Greuel, the city's chief auditor and general accountant, wants to be Mayor. Los Angeles voters, who now live under the cloud of a declared fiscal emergency which threatens critical city services, should take the Controller's record into account in making their decision in March 2013.

 
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