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Blog: Los Angeles Quietly Declares a 'Fiscal Emergency,' Warranting Review of Widespread Criticism of City Controller

A climate of discontent developed early in the Controller's term and continued throughout her tenure, climaxing in L.A.'s near bankruptcy.

Kevin James is a candidate for mayor of Los Angeles.

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.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Peter Choi June 28, 2012 at 10:45 PM
@John Fallingleaf I expect candidates to do what they promise. Mr. James promised details - and then delivered l-o-n-g diatribes that contained ... no details. This does not bode well for future promises from Mr. James. You get one chance to make a good impression and he is not living up to his promise to deliver detailed plans. As for Ms. Greuel, I would have to read a more nuanced and balanced report on her work as City Controller before I offer an opinion. Certainly I would and could not make one based on Mr. James attack blog.
John Fallingleaf June 28, 2012 at 11:58 PM
so your only gunna give him one week to provide you with a detailed plan to fix LA from the mess that greuel and the insiders created?? he gave you an intro with many many good ideas and said theres more to come. he didnt say hey peter, I'll have that whole mess solved in a week and make sure to turn it in to you on time. now a week has passed, and the next thing he does is prove to everyone the incompetence of his opponent.and your mad because you want numbers and you want them now! he's probably working on it as we speak! why do I believe this? "He regularly puts out statements and has released more detailed plans and position papers than his established competitors, City Council members Jan Perry and Eric Garcetti and City Controller Wendy Greuel." - Jon Regardie, downtown news http://www.ladowntownnews.com/news/kevin-james-is-the-man-who-would-be-king/article_ca4742b8-b73a-11e1-98fe-001a4bcf887a.html Peter read the links im sending you and you'll quickly learn James is our only hope to save LA from bankruptcy and the culture of corruption, if you disagree i'd like to know why and who else can do better?
John Fallingleaf June 29, 2012 at 12:15 AM
also, You SHOULD use this blog to form your opinion of greuel fyi....its not an attack blog from James. The entire paper is a research paper not opinion, cited with links to their original articles, where "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" can be found. Kevin James isnt included in that list he just put it together for you and the public to see so they can vote accordingly. these are cold hard facts...sucks to hear if your a greuel supporter....
Brian Aherne June 30, 2012 at 08:46 PM
Quick, name three competent current city officials, elected or major department heads. OK, out of those three, if you could name any at all, name just one who was not or is not a part of the union coalition that controls Los Angeles. Please post the name or names if any. This, the city of my birth almost 70 years ago, will continue down hill until the basic problems are corrected. City bankruptcy will occur unless there is a national and state turnaround, the latter improbable, and either way there is no sign that a solution, human or organizational to the problems of our city is on anyone's horizon. Sad.
Kenneth Lowndes July 19, 2012 at 03:39 AM
We have a much LARGER problem to deal with. The "petro dollar" system is the Last and Final Pillar that remains propping up the alledged USD. And it is presently, being dismantled. It is the system that requires european nations to make their Midle East crude purchases in USDs. WHEN that pillar is removed, we will see a 40% DROP in purchase power, literally overnight. Afterwards, we will also see the "USD" undergo additional devaluations of 40% or MORE, many times, through out each day. Thank God this is a pre-election season. But what happens when WW III - beginning against Iran is launced? Your grocery stores will suddenly not continue to contain that abundance of food. Then what? There are NO truck companies that can afford to continue their regular deliveries to your local stores, after fuel spikes up to $7.00 per. We are in dire straights, very soon. The DoD says the (non)Federal AND (no)Reserve economy is the greatest national security threat we face. They also say we are never more than 9 missed meals from Revolution, (3 days), And then guess what they say follows that, and how soon? It will look and feel like a real Zombie Apocalypse. Off the screen an din your face. But, despite this Doom and Gloom being forecasted, visit the Proposed Solution, - While you still can: http://www.ivamu.com/ Honest money equals much more honest government.

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