Former City Controller Criticizes L.A. Leadership Over Housing Debacle

Reacting to recent news about extravagant spending at the Los Angeles Housing Authority, a former city controller Tuesday sent an open letter to the people of Los Angeles expressing her disgust.

"The crisis of ethical judgment at the Housing Authority demands swift action from the elected leaders of Los Angeles and the state of California," wrote Laura Chick, also the former Inspector General for California.

SoCal Connected's seven-month investigation into HACLA broke last Friday. It exposed lavish spending on meals and gifts under the leadership of Rudolf "Rudy" Montiel, who was fired in the spring after an earlier SoCal Connected investigation. The Los Angeles Times on Saturday reported that Montiel was paid $1.2 million in a settlement over the action.

City Controller Wendy Greuel on Tuesday announced that HACLA Commission President Mitch Kamin is supportive of her office quickly auditing the agency from top to bottom. "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," she said in a press release. "Swift action must be taken immediately to ensure that this never happens again."

Greuel revealed to a SoCal Connected producer that HACLA officials' expenditures on travel had increased by 300 percent since 2006 — $300,000 was spent each year in 2009 and 2010.

But in her letter Chick questioned why such a development took so long. "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," Chick wrote. "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."

On the other hand, Chick praised Councilman Dennis Zine, who is running for City Controller and has been outspoken since he learned about the expenses at HACLA. "This is beyond problems and scandals," he told SoCal Connected. "This is outright theft of public funds..."

On Tuesday Zine introduced a motion calling the current HACLA chief to account for the expenditures. Simmons is expected to appear at next Tuesday's city council meeting for questioning.

"HACLA's actions show a total disregard, not only for the taxpayers and the current economic climate, but for the communities that they supposedly serve, Los Angeles' most vulnerable residents," said Zine, chair of the city's audits committee.

"As revealed in the [media] reports, this agency has breached the public trust and the need for oversight is glaring. They should be ashamed to call themselves public servants," Zine said in a statement released by his office.

Full Text of Laura Chick's Letter:

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

The image associated with this story appears courtesy of Flickr user Kansas Sebastian under a Creative Commons License.