LADWP Under Fire After City Controller Releases Scathing Audit Of Its Finances

LOS ANGELES (CBSLA.com) — A newly released audit of the Los Angeles Department of Water and Power found that ratepayers footed the bill for thousands of dollars in free gas for employees and expensive steak dinners, as well as millions in contracts without competitive bids.

The audit is the result of a year-long battle between the city of L.A. and the DWP union looking into how more than $40 million of ratepayer money was being spent.

The two DWP nonprofit safety and training trust funds, jointly administered by the DWP and IBEW Local 18, received more than $40 million by ratepayers over the years. Now a hard-fought audit by the City Controller concludes some of the spending practices raise serious concerns.

City auditors uncovered hundreds of thousands of dollars in ratepayer money being misspent. They found top employees charged $421,000 worth of conference expenses, including trips to Hawaii, Las Vegas and other cities. They also spent ratepayer money on expensive steak dinners and $86,000 worth of expenses for personal cars.

In fact, one administrator purchased $30,000 in gas for his own car during the five years studied - "That's a lot of driving," said L.A. City Controller Ron Galperin, who pushed for the probe.

Galperin added, "Now, there's also been a lot of steak restaurants. Clearly, they're eating a lot of meat."

Despite all the findings and the money spent, the auditors didn't find any evidence of criminal wrongdoing.

"We're recommending that certain kind of expenditures that are happening now should not go in the future," Galperin said.

Brian D'Arcy, the business manager of the LADWP workers union, says in a letter to Galperin that the audit vindicated the authenticity of the trust funds and their spending. But he also added, "We are concerned, however, that the audit report is littered with accusatory innuendo and peppered with contradictory statements, many of which are outside the scope of your office's charge."

Mayor Eric Garcetti says the findings justify the calls for the audit: "These findings validate our demand for audits. DWP customers deserve transparency and accountability for how their money is being spent, and these audits have now opened the books so we can follow the ratepayers' money."