An appeals court Thursday sided with Controller Ron Galperin’s efforts to audit the financial records of two Department of Water and Power worker safety and training trusts that receive about $4 million a year from the utility.
Brian D’Arcy, the chief of the International Brotherhood of Electrical Workers, Local 18, has challenged subpoenas issued by Galperin’s office to gain access to the trusts’ financial records, saying the controller does not have the right to examine those documents.
A Superior Court judge earlier denied D’Arcy’s request to quash the subpoenas, and a state appeals court Thursday affirmed that decision, ruling that the Joint Safety Institute and Joint Training Institute agreements actually do allow Galperin to conduct his audits.
Mayor Eric Garcetti joined the city controller and attorney Thursday in celebrating what they said is a legal victory that gives the utility’s customers the power to scrutinize the use of millions of dollars in public funds given annually to a pair of trusts.
Garcetti said the decision “removes any shadow of a doubt” about the city’s ability to scrutinize the funds, which comes from DWP customers, Los Angeles residents and businesses who share ownership of the utility.
Feuer said “residents, our ratepayers demand transparency,” and with this ruling “they got it …”
Galperin said he is “gratified that the appeals court granted our position and acted as it did, affirming my authority as controller to audit these two DWP trusts and to bring transparency to the people of Los Angeles.”
According to the ruling, the documents creating the trusts “empowered the controller to conduct the audit at the DWP’s request, notwithstanding Local 18’s election to have” a firm picked by the union to audit the trusts for the years 2013 and 2014.
“For that reason, appellant has established no basis for relief by writ of mandate,” according to the ruling.
According to the ruling, D’Arcy’s attorneys had argued that because an audit had already been proposed — namely one to be done by the union-chosen firm — the agreements do not allow a second audit by the controller to be conducted in that same year.
D’Arcy’s representatives did not immediately respond to a request for comment.
The two trusts, set up in 2000 and 2002, are governed by boards made up of both Department of Water and Power and Local 18 officials. They are tasked with providing safety and training programs for utility workers.
While union officials have resisted Galperin’s attempts to subpoena documents for his audits, they did eventually agree to hand over financial documents to Galperin and other city officials in exchange for the release of the annual $4 million payment, under a mutual agreement with city leaders.
Galperin has since conducted an audit based on the documents released under the agreement, finding that the trusts “operate in an environment that has lax oversight and inadequate financial controls” over purchasing contracts and travel expenditure.
The audit found that an IBEW official and seven other trust administrators each received $222,000 annual salaries. The administrators also received a $500 per month vehicle allowance.
Another audit performed by City Administrative Officer Miguel Santana resulted in recommendations for improving the trusts’ purchasing and travel expense policies, and other methods to improve their governing structure.
Garcetti said that while the two sides fought over the issue in court, city officials were only able to conduct the two audits through a “hard-fought battle.”
“Clearly those audits proved that there was money misspent at those trusts,” Garcetti said.
Galperin applied pressure on the trusts Thursday to adopt the suggested reforms, which would put controls on spending, save money and ensure funds are indeed going to programs benefiting DWP workers.
He said officials must consider “the real question about the very existence of these trusts,” that is, “have these trusts been living up to their stated purposes and is it time to bring them to a conclusion?”
“As DWP ratepayers we expect that our tax dollars will be put to the best and most efficient use possible,” Galperin said. “Toward that end we will be unwavering in bringing the necessary reforms to DWP … to make sure that DWP is really efficient, cost-effective, customer service-oriented and truly responsive.”
— Wire reports