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State audit upholds Irvine’s scrutiny of Great Park funds

By Christina Shea

The recent report from the Joint Legislative Audit Committee reminds me of the wonderful Groucho Marx line, “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.”

For eight months, the state auditor poked, prodded, plowed through Irvine’s books looking for misdeeds. They proved Groucho was right.

As hard as the state’s finest accountants looked, the missing $250 million spent by the prior city council on Great Park planning still remains somewhere between Irvine and Seattle in D.B. Cooper’s backpack.

The city’s 2015 audit found some of it, but taxpayers were woefully harmed fiscally and misled.

After nearly a decade of fumbling the Great Park opportunity, Irvine’s voters decided it was time for a change in 2012.

In large part, the old guard that squandered the money was tossed out of office and replaced with fiscally responsible council members committed to building the Great Park. Taxpayers demanded the council find out how the $250 million was spent, since there was so little to show for it.

The City Council initiated an audit review of the prior decade of Great Park spending in January 2013. We retained outside legal counsel from Aleshire and Wynder, the legal team who exposed the fraud in the city of Bell, and retained the HSNO accounting firm, and began peeling back the layers of consulting redundancy and suggested Great Park mismanagement.

The council established a subcommittee of Councilman Jeff Lalloway and me to monitor the process and report to the public in public meetings. Depositions were posted online, for full transparency to the public.

As you can imagine, the beneficiaries of the $250 million were not happy. Consulting firms refused to produce documents, lawyered up and obfuscated at every opportunity. We ultimately were forced to use the city’s subpoena power to secure documents. What we thought would be a straightforward review of expenditures became a battle of lawyers driving up the cost and slowing down the process.

Continue reading at the O.C. Register…

No need to ‘audit the audit’ of the Great Park

By Orange County Register Editorial

Assemblywoman Lorena Gonzalez, D-San Diego, made a formal request to the state Joint Legislative Audit Committee for an audit of the Orange County Great Park audit. Ms. Gonzalez said she acted out of concern for the way the audit had been conducted and that it “could set a troubling precedent for municipal audits in the future.”

While a majority of the committee voted in support of the request, the motion failed procedurally because it did not earn a majority from both houses of the Legislature. Ms. Gonzalez vowed to try again.

But really, Ms. Gonzalez; thanks, but no thanks.

After nearly a decade of mismanagement at the 1,347-acre site, things look to be progressing toward that long promised Great Park. Why now does the San Diego area Democrat care about how business is done over at Irvine’s City Hall?

Ms. Gonzalez insinuated that politics were at play with the outcome of the audit, pushed by the Irvine council’s current Republican majority and which criticized the years of park development by the council’s former Democratic majority. One could ask, however, why neither Ms. Gonzalez nor the Audit Committee expressed any concerns about Great Park audits conducted during the years of Democratic control in Irvine and that found nothing amiss even as more than $200 million was spent with precious little to show for it.

Read more at the Orange County Register…

San Diego Politician Seeks To Undermine OC Great Park Audit

By R. Scott Moxley

In Legally Blonde 2, Elle Woods (Reese Witherspoon) works to pass anti-animal testing legislation. But her sly boss, a congresswoman (Sally Fields), secretly sabotages the effort on behalf of a money-hungry campaign contributor. Though naïve and ditsy, Woods uses her charm to turn once contemptuous politicians into admirers, wins a new law and everybody, including her Chihuahua Bruiser, lives happily ever after.

It’s a feel good Hollywood tale that doesn’t quite mirror reality, at least in Sacramento. On April 22, Assemblywoman Lorena S. Gonzalez tried to play the role of an Elle Woods-type do-gooder by advocating that the state auditor open an investigation into the City of Irvine. Her issue? In a rambling, semi-coherent statement, Gonzalez said the legislature has “a responsibility” to determine if the audit of Orange County Great Park spending was performed “for political reasons.”

The reason for the audit is obvious. Flabbergasted Irvine residents wanted to know how city officials spent about $250 million in park funds without building a single, major, promised feature of the proposed project. And the answer is most definitely political, but not the way Gonzalez is spinning the issue.

Gonzalez is a San Diego Democrat. The crew that wasted the $250 million–in part by giving their own political operatives lucrative, no-bid contracts–are Democrats: Beth Krom, Larry Agran and Sukhee Kang. The folks Gonzalez wants audited are the people who complied with public sentiment and ordered the spending review that documented widespread mismanagement, incompetence and cronyism: Christina Shea, Jeff Lalloway and Steven Choi, all Republicans.

Yesterday, a shameless Gonzalez asked the state’s Joint Legislative Audit Committee (JLAC), a Democrat-controlled panel, to shift at least $250,000 in funds intended to inspect wasteful state agencies and spend it on auditing Irvine’s legally-authorized audit. Her reasoning is breathtaking in its absurdity.

“You could Google ‘Gafcon’ and ‘City of Irvine’ and see some of the things that were done along the way–the releasing of depositions on a website prior to the audit being completed,” she testified.

Sounds horrible like a risque leak to TMZ, doesn’t it? But the website was the city’s public website and, as best I can tell, residents appreciated investigator Anthony R. Taylor’s commitment to public disclosure. The only people who didn’t like the release of the depositions as they were completed were the likes of Agran and Krom because the information revealed the depths of mismanagement at the park.

Continue reading at the OC Weekly.. 

Great Park audit a cautionary tale

By Eric Woolery

While the city of Bell is the poster child for government run amok with taxpayer dollars, the recent revelations in the Great Park audit point to a similar litany of fiscal horror stories. Because of this, last November, 88.7 percent of Irvine voters approved a city charter amendment requiring an annual audit of Great Park funds and other measures to put the brakes on the Great Park money machine.

Too much politics and too little independent oversight of taxpayer dollars unraveled the carefully woven web of self-dealing in both Irvine and Bell. Things had to reach a crisis point for the citizens to finally step in and change the political playing field – but by then the damage was done and hundreds of millions of dollars were wasted.

In the case of Bell, the city manager was able to shuffle money to himself and his supporters by duping, at best (or bribing, at worst), the City Council. In the case of Irvine, the council majority was able to overstep its authority to muzzle staff because there was no independent third party to hold them accountable. The lesson learned in both cases is that politically independent financial oversight would likely have either prevented both disasters or at least brought them to a head years earlier.

This begs the question: Should financial oversight be entrusted only to a city council or to an independent third party that is neither beholden to the council or staff – but has the authority to examine and audit financial records, policies and procedures anytime? An elected treasurer or auditor-controller who reports directly to the people can be both an early warning system, if things start to go off track, and a source of independent analysis to help decision makers by providing unbiased analysis to support policy decisions.

Continue reading at the Orange County Register

Great Park Audit Poll Results

Dear Irvine Neighbor,

Last week I asked Irvine voters for their opinion about the results of the Great Park Audit and if the city should pursue money from those consultants that abused the taxpayers. Almost 400 residents responded, showing once again that Irvine residents care deeply about city issues and our fine community.

QUESTION 1: Should the city council seek recovery of the excessive funds overpaid for the Great Park planning?

  • YES – 80% said the city council should try to recover the excess taxpayer money from consultants.
  • NO – 20% said the former city council made a bad deal and the consultants are entitled to keep the money.

QUESTION 2 – Did the former city council spend $250 million wisely on the Great Park?

  • YES – 12% said we got our money’s worth.
  • NO – 88% said taxpayers got ripped off.

Many respondents took the time to prepare thoughtful comments that I wanted to share with you. The vast majority of comments reflected anger and disappointment in the leadership of Larry Agran and Beth Krom, in some cases respondents demanded their prosecution. Below is a sample of some of the verbatim responses.*

  • “Agran and Krom should be sued and prosecuted for fraud.”
  • “Beth Krom is responsible and should be removed from office. I would sign the recall papers.”
  • “If the audit revealed that significant money was misappropriated by politicians, we must bring the full weight of the law on them as well.”
  • “I worked for the city. The excessive spending was approved by Agran and Krom. No one questioned contracts, not even city manager Joyce, or finance. As a resident of Turtle Rock, the funding for the OCGP and continued disorganization and direct management is horrible.”
  • “Agran should go to jail.”

CLICK HERE TO READ MORE COMMUNITY FEEDBACK…

Our poll results confirm that Irvine voters are in a sour mood over the Great Park – they’re mad that the behavior of past leaders, and they want their money back. Based upon these results its clear the community wants the council to continue to investigate and recover any tax dollars that were misspent on the Great Park.

Sincerely,

Dick Ackerman
Chairman, Irvine Cares
State Senator & Minority Leader (ret.)

P.S. You can read the Great Park Audit here and the companion legal analysis here.

* These comments were received verbatim by members of the public and are being provided herein for news worthy purpose. Irvine Cares has made no independent investigation of any of these comments and makes no representations regarding the veracity of these statements.

Tracking millions misspent at Great Park

By Christina Shea

In January 2013, following my reelection, my top priority focused on auditing the operations of the Great Park. Our Council unanimously agreed with me, and voted to authorize a forensic audit of the project.

A subcommittee of Councilman Jeff Lalloway and myself was authorized to oversee the audit, with the goal of producing a product that would shed light on a decade of questionable expenditures.

We retained a highly qualified law firm, experienced in exposing the mischief in the city of Bell, and retained a reputable accounting firm to scrub the books. We felt the public should know where the $250 million went, and what we got for it.

Continue reading at the Orange County Register

Follow the Money Lost at the Great Park

Most of us would say that $260 million is a lot of money to spend, especially when you have little of substance to show for it. But that’s the price Irvine has paid to develop 88 acres of the proposed 1,347-acre Great Park.

According to an audit compiled by the law firm Aleshire & Wynder, “We believe there are grounds for legal recovery” of some of the money, “including contract claims, claims under the False Claims Act and professional negligence should the [City] Council wish to explore them.”

Now, following the release of that audit and a second report, both on how the millions were spent over a decade, the Irvine council certainly does wish to explore options for recovery and has asked special counsel for ideas on how the city can get some of that money back. But the search for answers likely won’t need to go very far.

After all, the reports are ripe with examples that give an appearance of impropriety. Some contractors seem to have been simply overpaid for what they did, according to the report.

Forde & Mollrich, a public relations firm tasked with promoting the undeveloped park, saw its pay fluctuate wildly. One month, the firm received $50,000 and, another month, $100,000. Investigators say they found “no clear evidence” as to the reasoning.

Ken Smith, landscape architect for the park plan, may have gone months without performing any actual work, despite being paid $10,000 a month.

Continue reading at the Orange County Register…

Secret Battles Cost Great Park Millions

By David Whiting

Despite the financial waste, failed oversight and greed detailed in last week’s Great Park audit, there also is clear evidence the public had a champion who quietly turned that culture around.

At least there is comfort in knowing that – sometimes – people who fight for public trust get their due.

I ride the elevator down to the basement archives in the Richard Nixon Presidential Library and Museum – yes, a basement of all places – to find out who should be pilloried for promising voters an impossible Great Park dream, allowing hundreds of acres of land to lay vacant for years and squandering millions of public dollars.

Perhaps like you, I want justice.

Because of the gross mismanagement Mike Ellzey inherited when he arrived in 2008, the former El Toro Marine base in Irvine today has far more acres of weeds and cracked asphalt than the sports fields and bike paths we were originally promised.

Sitting across from Ellzey, newly appointed head of the Nixon library and former Great Park CEO, I ask for names of the bad guys.

But like many who clean up others’ messes, Ellzey shakes his head, looks at me and makes clear he’s not going to name names. Instead, he even reaches out to heal wounds by saying elected leadership such as former Irvine mayor and Great Park helmsman Larry Agran were “well-intentioned.”

The Great Park audit puts it differently.

The audit – which Agran claims needs its own audit – states Agran early on was told by the architect the project would cost $1 billion (an estimate other experts would later put at “multi-billions of dollars”). But the report then states Agran turned around and told the public the cost would be less than half the architect’s estimate.

So let’s start by allowing the 157-page audit to speak for itself.

“Mr. Ellzey coming in with fresh eyes was willing to look realistically at what was feasible,” the audit concludes. “This was not easy given the political environment Mr. Ellzey described in his deposition.

“It appears that Mr. Ellzey ultimately acted with some courage given the threats which were made against him.”

Yes, threats.

Continue reading at the Orange County Register…

Great Park audit: Auditors tell Irvine council the park ‘got off to the wrong start right from the beginning’

By Sarah de Crescenzo , O.C. Register

IRVINE – A lack of a realistic, detailed budget was among the factors that doomed the Great Park project as it was originally envisioned, auditors and attorneys told the Irvine City Council on Tuesday.

Once slated to be completed by 2011 at a cost of $401 million, as of 2013, more than $250 million had been spent to develop 88 acres of the 1,347-acre former El Toro Marine base. That number has since increased to $260 million.

“The park got off to the wrong start right from the beginning,” said Christopher Money, a partner with Hagen, Streiff, Newton & Oshiro, Accountants, the firm hired by the council in June 2013 to find out where that money went.

Law firm Aleshire & Wynder and a retired judge were brought in last year to assist the company in its investigation.

The team found that $95 million was spent on operations and administration; about $94 million for “soft costs,” such as design fees; and $61.8 million on “hard costs,” such as construction and engineering.

Depositions of more than 23 people and a review of the park’s finances didn’t reveal any criminal activity, but the firms said personal connections between former Councilman Larry Agran and some of the contractors and consultants on the project have raised the appearance of impropriety.

Continue reading at O.C. Register…

State asked to question local park audit

By Steven Greenhut

SACRAMENTO — One of Orange County’s longest-running feuds involves the proposed redevelopment of the old Marine Corps Air Station at El Toro. The decommissioning of the 4,700-acre base sparked a heated battle in the 1990s between proponents of an international airport — and residents who preferred a park-oriented alternative.

Preferred is a nice way of putting it. In 1994, voters OK’d an initiative that zoned this unincorporated area for an airport, triggering a “quality of life” battle that led to three more countywide voter initiatives. The base closed in 1999, and the matter seemingly was settled in 2002 when voters amended the general plan to create the “Orange County Central Park and Nature Preserve.” (It later was annexed by Irvine.)

This barely scratches the surface of the dispute, which became heated in recent weeks after several San Diego-area politicians dragged the Legislature into the matter. Democratic Assemblywoman Lorena Gonzalez and Sens. Ben Hueso and Marty Block were joined by Republican Assemblyman Brian Maienschein and Sen. Joel Anderson in asking for intervention by the state’s Joint Legislative Audit Committee.

It gets weird. The committee doesn’t often meddle in local matters. And San Diego legislators weren’t asking for an audit of public funds spent on a park development that has fallen short of promises. They are asking the state to audit the city’s audit.

Continue reading at the U-T San Diego..