Laura Chick chides officials on sweet Housing Authority deal

Earlier today, the current City Controller, Wendy Greuel, announced in a letter that the $1.2 million go-away settlement paid to former City Housing Authority chief Rudolf Montiel was "unfathomable." Now the former Controller, Laura Chick, has sent "an open letter to the people of Los Angeles" that vents her indignation at the deal and wonders where officials, such as Greuel, were before. Both letters are after the jump.

Also: KCET has put its full database of housing authority spending records online, along with the full episode of last week's "SoCal Connected" that turned up the heat on the controversy.

First Greuel:

Today, Los Angeles City Controller Wendy Greuel revealed that Mitch Kamin, the head of the Commission for the Housing Authority of the City of Los Angeles, is supportive of an expeditious top to bottom financial review of the agency.

This follows the announcement of a payout of $1.2 million to recently ousted Housing Authority CEO Rudolf Montiel and the release of preliminary audit findings from Greuel’s office that reveal HACLA officials were involved in wasteful spending, double dipping and irresponsible expenditures.


Greuel sent a letter on Dec. 1 to HACLA officials regarding the need to broaden her investigation. Today’s letter confirms Greuel’s conversation with Kamin about the need for an independent and objective review of the Agency.


Greuel’s audit will help enact swift reforms to prevent fraudulent spending and future sendoff deals for Agency officials.

“Given our City’s budget crunch, and the economic challenges facing all Angelenos, it is unfathomable that an Agency dedicated to creating and maintaining affordable housing for the poorest families in Los Angeles spent taxpayer money on a golden parachute.” said Greuel. “Swift action must be taken immediately to ensure that this never happens again.”

A City council motion is being introduced today supporting Greuel’s efforts to broaden her probe of the Department.

Last week, Greuel uncovered that HACLA officials spent $300,000 per year on travel in 2009 and 2010, a 300% increase since 2006.

“It’s outrageous that travel expenses to this magnitude were allowed during the worst economic downturn the City has faced since the Great Depression,” said Greuel.


“The preliminary results of my audit raise several serious concerns over multiple irregularities and indicate that HACLA appears to have an environment that allows the misuse and abuse of public funds. A comprehensive top to bottom review must be undertaken by my office to ensure that precious public funds are safeguarded,” said Greuel.

Controller Greuel’s letters to HACLA officials from Dec.1 and Dec. 6 can be found by clicking here.

Controller Greuel has conducted more than 40 audits and uncovered nearly $100 million that the City has lost to waste, fraud, and abuse over the last two years.

Now Chick:

Dear Friends:

Just like you, I have been disgusted over the recent news reports on the outrageous spending and settlement decision by the Housing Authority of the City of Los Angeles.

The crisis of ethical judgment at the Housing Authority demands swift action from the elected leaders of Los Angeles and the state of California. The Housing Authority is a state-chartered public agency, with a billion dollar annual budget, governed by a seven member Board of Commissioners appointed by the Mayor of Los Angeles.

According to an article in Saturday’s Los Angeles Times the Board of Commissioners recently approved a shocking $1.2 million dollar settlement to its disgraced former Director Rudolf Montiel.

Friday evening KCET-TV’s So Cal Connected program revealed that Montiel had approved shopping and dining sprees paid for by taxpayers during his reign. The perks listed as “employee incentives” included thousands of dollars in purchases from Bed Bath and Beyond, Target, Edible Arrangements and a whopping $4,500 on Lands’ End sweaters alone.

The lavish dining expenses included tens of thousands of dollars to such swanky establishments as Ruth’s Chris and Flemings.

For this flagrant abuse of public dollars the Housing Authority Board of Commissioners has awarded Montiel with a million dollar payout.

Several top employees who participated in the flagrant spending are still with the Housing Authority.

What is most disturbing regarding these startling revelations is the lack of indignation and action by elected leaders. When asked for comment by KCET, the Mayor’s office declined comment. It is shocking and disappointing but hardly surprising.

Where are the calls for an overhaul of the Board of Commissioners? Where are the hearings to discuss the organization and oversight of the Housing Authority and how it could and should be reformed?

KCET had already exposed questionable spending at the Housing Authority last March yet Los Angeles City officials did not immediately act to push for needed reform at the agency.

City Controller Wendy Greuel, just now, after over 8 months since KCET's first expose, is finally releasing an audit that peeks at the tip of the iceberg already exposed. Shortly before Friday’s latest report by KCET, she issued a letter to the Housing Authority’s Commission President to “strongly suggest” a broader audit.

The time for suggestions has long passed. It is time to knock on the Housing Authority’s door and demand that they open up their books to the full light of day and account for their actions.

Councilmember Dennis Zine certainly had it right when he spoke of the spending at the Housing Authority, “I find that outrageous, and Rudy had his own problems, but the fact of the matter is, people that are adults have a responsible judgment and they get paid to do a job and these people obviously ripped-off the system, they ripped-off the federal government, they ripped-off everybody.”

Bravo! But where is the chorus joining Councilmember Zine?

When I left the City Controller’s Office in April of 2009 I said that the City of Los Angeles reminded me of an old castle with a drawbridge over a moat and that drawbridge was quickly retracting. In retrospect we see that those words are sadly true.

Now it is time for you the people of Los Angeles to be indignant and demand immediate and effective action to reform the Housing Authority of the City of Los Angeles.

In my eight years as City Controller I knew that if the public became outraged over what one of my audits uncovered and demanded action that we had a real chance of getting elected officials to act. Now again it is up to you.

Sincerely,

LAURA N. CHICK


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