Los Angeles news reports revealed recently that the Los Angeles Department of Water and Power has transferred more than $40 million of ratepayer money to two private trust funds over the past 13 years but has failed to make detailed financial records available. The new DWP Commissioners recently made it clear that they want the facts and more transparency.
Two tax-exempt trusts were formed by DWP and its employees’ union more than 10 years ago. The Joint Training Institute and the Joint Safety Institute spend more than $3 million every year, but it’s not clear on what. DWP management and labor representatives sit on the board of these trusts. Officials said the organizations have carried out safety training which has reduced DWP on-the-job injuries significantly.
At the October 1st Commission meeting, new President Mel Levine put it to DWP General Manager Ron Nichols that he wants to see expenditures linked with activities and results from the two trusts. Nichols sits on the Trust Board. Levine said that an article in the Los Angeles Times “suggested many millions of dollars could not be tracked – where it went and how it was spent.” Levine wanted to know why all of this is not transparent.
Nichols said the trusts are part of the employee MOU and were voted in by the City Council. Release of financial information, he said, requires a vote of the Trust Board. That Board was scheduled to meet Tuesday. Levine suggested that the Trust Board come up with a “detailed accounting of how more than $40 million was spent since the year 2000.” He said the City Controller is concerned with the “lack of specificity and documents.”
Levine quoted from the tax returns of the two trusts. In five or so broad categories, the two trusts spent a total of nearly $3 million last year. The categories are administrative reimbursement, travel, training workshops and other. Commission President Levine said, “That’s close to $3 million with almost no detail at all. In light of the fact that it’s ratepayers’ money, we are entitled to know how it was spent.”
Four new LADWP Commissioners, appointed by Mayor Eric Garcetti, will clearly push aggressively for the facts. Mayor Garcetti was also recently quoted as saying he will fight for the information to go public. A news report from KFI radio in LA says the Public Integrity Division of the LA County District Attorney’s Office has “taken an interest” in recent reports that trust managers have not detailed how the more than $40 million has been spent.