L.A. City Controller Subpoenas 3 Cell Phone Companies

Wendy Greuel in 2009. | Photo: David Markland/Flickr/Creative Commons License

City Controller Wendy Greuel said today she subpoenaed three cell phone companies and accused them of failing to comply with repeated requests to turn over five years of city cell phone bills.

Greuel said she employed the rarely used power after AT&T Mobility, T- Mobile, and Sprint Nextel Corp. declined her requests or asked for extensions over a period of several months. Verizon handed over the requested bills last week, the controller said.

Press Conference Sparks Political Attack
In reaction to Greuel's press conference, a representative for Councilmember Eric Garcetti's mayoral campaign sent out a zinger of a statement."It shouldn't take an election for Ms. Greuel to finally get serious about finishing her incomplete audit from May 2011," said Jeff Millman. "We've had four years of a press release Controller, and L.A. cannot afford a press release Mayor."It didn't take long for Greuel's campaign to respond, calling it a "baseless attack.""Eric Garcetti's attack is factually incorrect and an example of political opportunism at its worst. Today's audit was a critical follow up to a 2011 audit which was already completed. Unfortunately, under Eric Garcetti's presidency, the City Council was asleep at the wheel while millions of dollars were wasted," said John Shallman. "It's always convenient for those in power to try to kill the messenger when there's been abuse of taxpayer money."~ Zach Behrens, KCET-TV

Greuel, who is running for mayor, said copies of the bills are necessary to complete a larger investigation into whether the companies performed contractual duties to analyze the city's phone bills for ways to save money.

"Today, I am sending a clear message that stall tactics will not be tolerated," Greuel said during a morning news conference. "It's absurd that businesses doing business with the city of Los Angeles want to deny the city's access to cell phone bills. I urge AT&T, T-Mobile, and Sprint Nextel to hand over the those bills and stop acting as though they have something to hide.

"These are our bills. There should be no reason that we would not receive them," Greuel added.

Sprint spokeswoman Stephanie Vinge Walsh said the company has been providing Greuel's office with information since an initial request in September. "In light of our extensive research, effort, and cooperation with the L.A. City Controller's office over the past months, we're disappointed that they have decided to file a subpoena," Vinge Walsh said. "We are also disappointed that their press release suggests that we have not provided them information."

An AT&T spokesman said the company does not comment on active legal matters. A letter from AT&T to the Greuel's office dated Dec. 21 suggested the company was willing to provide the requested bills as long as the controller's office obtained written permission from the relevant city agencies with contracts, due to regulatory obligations.

"I would like to suggest that we arrange a meeting after the first of the year to discuss the breadth of the request and the information which can be reasonably produced," AT&T Government Segment Sales Manager Kevin Strom wrote in the letter to Greuel's office. A May 2011 audit by the controller found that decentralized oversight of contracts by individual city departments caused the city to pay more for cell phone service than necessary -- to the tune of $375,000 to $1 million a year.

In a previous audit, Greuel called for a 60 percent reduction in the almost 12,000 cell phones used by city employees. The city could save $1.2 million a year by providing stipends to certain employees who use their own cell phones for city business, instead of contracting with wireless phone companies.

Greuel said the companies have until Jan. 14 to hand over the requested documents. Under city law, failing to comply with the subpoenas is a misdemeanor offense punishable by a fine of up to $1,000 or six months in a county jail.

Chief Deputy City Attorney Bill Carter applauded Greuel's action. The City Attorney's Office in late 2010 alerted Greuel to suspicions that cell phone companies were not optimizing the department's bills, Carter said. Greuel's first audit of city cell phones followed in March 2011.

City Attorney Carmen Trutanich's office is also investigating several cell phone companies, including Verizon, for potential unfair business practice violations and could seek millions of dollars in damages and fines, Carter said.

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