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O.C. REGISTER: Sacramento Riding to Rescue of Irvine Democrats

Orange County Register Editorial

Only now, when long-awaited progress is being made at the Orange County Great Park, the result of a political shift at Irvine’s City Hall, do concerns over an audit of park finances, and the park’s role as a political tool, warrant intervention from Sacramento.

Despite two failed attempts to prod the state’s Joint Legislative Audit Committee to sign off on a state audit of the city’s Great Park audit, Assemblywoman Lorena Gonzalez, D-San Diego, prevailed Tuesday when the Democratic-controlled panel finally concurred.

Ms. Gonzalez insinuated that politics determined the conclusions of the audit, pushed by the officially nonpartisan Irvine council’s current Republican majority, which criticized the years of park development managed by the council’s former Democratic majority.

The Democratic-controlled Legislature was nowhere in evidence while $200 million in development funds was spent, as the Register recently noted, to complete less than one-sixth of the project to convert the closed El Toro Marine Corps air base into a huge regional park. Neither was the Legislature’s interest piqued by Great Park audits conducted during the years of Democratic control, which found nothing amiss.

But if Ms. Gonzalez’s goal really was to determine whether politics played a hand in wasteful spending on the Great Park – by comparison, the current council has spent about $1.5 million on its audit – the examination’s findings made the answer abundantly clear.

Recall the testimony of Mike Ellzey, former Great Park CEO and current director of the Nixon Presidential Library and Museum, about when he questioned a $100,000-per-month public relations contract for the undeveloped park with Newport Beach-based firm Forde & Mollrich.

“We’ve got to reduce that. I mean, that’s way too much. We’ve got to reduce that,” Mr. Ellzey recalled telling two Great Park staffers in a sworn deposition to city-hired auditors last year.

“They literally laughed,” he recalled. “I asked them, ‘Why are you laughing?’”

Their reply? “Good luck on that.”

Continue reading at the Orange County Register…

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

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…

O.C. REGISTER: Irvine to Take Former Councilman Larry Agran to Court over Great Park

By Sarah de Crescenzo, Orange County Register

The Irvine City Council will ask a Superior Court judge to force former Councilman Larry Agran to give a deposition in the city’s investigation into spending on the Orange County Great Park.

The council says the testimony is essential to the completion of the audit.

At least 20 people have been deposed so far during the financial review of the spending of more than $200 million on the development of the park, which started in June 2013.

The council at a special meeting Monday afternoon voted 4-1 in favor of a recommendation from special counsel Anthony Taylor, the attorney overseeing the park review, to seek a court order compelling Agran’s testimony. Officials also authorized Taylor to recover the money spent for a deposition that Agran skipped.

“I think it’s very important to note that no other witness in this audit has failed to appear at their deposition in violation of the subpoena,” Taylor said.

The deposition conflict has developed in recent months in the wake of a records subpoena sent Dec. 23 from the city to Agran. He turned over some of the documents requested, but also sent 10 pages of objections.

Continue reading at the Orange County Register…

Irvine asks judge to open firm’s books

By Jill Cowan

At a special meeting Wednesday, the Irvine City Council unanimously voted to ask for a court order compelling a powerful consulting firm to open its books for an ongoing forensic audit of the effort to transform a retired military base into a grand municipal park.

“I don’t care how great someone may be,” said Councilwoman Christina Shea. “They need to follow our laws.”

The move came after a top executive at Forde and Mollrich — a firm accused of wielding undue influence over the planning of the Orange County Great Park — refused to hand over information that auditors said was necessary to gauge whether the $7.2 million in fees paid to the firm for their work on the project were properly earned.

The audit is examining how the city spent more than $200 million on plans for the park, with what the project’s critics say is little developed ground to show for it.

When he was deposed for the audit, Forde and Mollrich partner Stu Mollrich declined to provide detailed information about the firm’s overhead costs and payroll, saying that it was beyond the scope of the probe.

Audit attorneys, meanwhile, argued that the records were key to understanding the firm’s specific responsibilities under its $100,000-per-month fixed-fee strategy and public relations contract.

Furthermore, they said, the firm agreed to make internal financial records available when it signed on to work for the city.

When Forde and Mollrich’s attorneys declined written requests for the records earlier this month, the auditors issued an ultimatum: Turn over the documents by 5 p.m. Aug. 18 or get ready to appear before a judge.

The deadline passed without the records changing hands, although audit attorney Anthony Taylor told the council Wednesday that the firm offered to go to mediation earlier in the week.

Still, Taylor said, Mollrich hadn’t expressed a willingness to comply with auditors’ requests, and urged the council to move forward with the resolution.

“We’re here in large part because of Forde and Mollrich,” he said. “They are absolutely driving up the cost of the audit.”

In January, the council authorized the use of subpoenas for the audit.

Over the last several weeks, testimony from a slew of former park officials has been made public — many of whom described the park’s design process as directionless and beset by cronyism.

Those claims have been strongly rejected by the park’s most ardent champions, including Irvine Councilman Larry Agran, who say the audit is a political witch hunt.

Continue reading at the Daily Pilot…

Great Park Insider: Larry Agran’s Corruption, Incompetence Worse Than Previously Known

By R. Scott Moxley

In January 2008, Larry Agran–the leader of a three-council-member, Democratic alliance that then controlled the city of Irvine for more than half a decade–desperately needed to enlist outside professional help to manage what had spiraled out of control: plans to build the Orange County Great Park, then one of California’s largest public-works projects.
But there was a problem.

Agran, a career politician who had no clue how to build a massive public park despite his promises otherwise, didn’t just crave a competent CEO for the $1.6 billion project. The county’s living liberal icon with frightening Nixonian tendencies hoped the park would be an unbreakable monument to his legacy, so he needed someone who would obey his wishes, no matter how ridiculous or shady.

Excluding the four other elected representatives on the council, as well as the other eight members of the Great Park’s Board of Directors, Agran–a losing Democratic Party presidential-primary candidate in 1992–met Mike Ellzey at an Irvine Denny’s off I-5 on Sand Canyon Avenue.

Ellzey’s background with private corporations, at a university and as CEO of the Golden Gate Park Concourse Authority made him a suitable candidate for the Great Park job. Demonstrating his dictatorial sensibilities that allowed him to dismiss notions of government transparency and the participation of his colleagues, Agran unilaterally offered Ellzey a taxpayer-funded job worth more than $175,000 annually.

Of course, there was a catch.

The CEO job would remain vacant. Ellzey was invited take a government post that Agran–a Chicago native–conjured up on the spot: deputy CEO. Agan wanted to see how far he could trust Irvine’s newest public employee.

As I’d reported in detail for years before this secret Denny’s powwow, Agran’s public pronouncements about alleged strides in developing the Great Park had been a sham masking brazen corruption. Paranoid of the public learning more about his shenanigans, he nervously watched Ellzey and–apparently satisfied he could control him after about six months–elevated the outsider to the CEO post.

Yet, given this was Agran’s world–a theater of endless, conniving plots that would impress Shakespeare–Ellzey quietly learned he’d become CEO of nothing. He didn’t answer to the Great Park board or the City Council. He answered to Agran and two Great Park subcontractors: Arnold Forde (of Forde and Mollrich) and Yehudi Gaffen (of Gafcon Inc.), two of the Democrat’s pals who’ve taken millions of dollars in diverted park funds for no-bid, consulting contracts.

In a sworn, June 18 deposition made public this afternoon as a result of an ongoing audit of Great Park finances and the reasons why Agran and his political allies spent $200 million with very little to show, Ellzey talks about his first realization that something was terribly wrong in Irvine.

Scanning budget items when he took the job in 2008, he saw that Forde, Agran’s chief political consultant based in Newport Beach, was receiving $100,000 per month to do public relations for a park that didn’t exist. Perhaps worse, the contract required nothing of Forde and Mollich. It was merely a retainer won without a single bid. The private consultants enjoyed a remarkable deal: They could stay in bed all day and still collect the public funds.

“I remember as though it was yesterday,” he told Anthony R. Taylor, the private attorney representing the city in its probe of the Great Park. Shocked, Ellzey approached two veteran Great Park managers and asked, “‘What is this $100,000 a month for Forde and Mollrich?’ And they told me it was for public relations. And I said, ‘We’ve got to reduce that. I mean, that’s way too much. We’ve got to reduce that.'”

The response was memorable.

“And they literally laughed,” said Ellzey. “I asked them, ‘Why are you laughing?’ [They replied], ‘Good luck on that.'”

Continue reading at the OC Weekly…

Irvine Great Park plan gets planners’ OK

By Kimberly Pierceall

IRVINE – Developer FivePoint Communities’ earlier approved plan for sports fields, a golf course and trails for 688 acres at the Great Park was given the technical go-ahead Thursday with a 3-2 vote by Irvine’s Planning Commission.

The developer’s plan, approved late last year by the Irvine City Council, required the Great Park’s original master plan designed by New York landscape architect Ken Smith to be modified before the company could seek permits to start construction.

The approval prompted the usual devisive discussion of the Great Park’s development history and merits of Smith’s original master plan (or lack thereof).

Planning Commissioner Harvey Liss called the process of approving the master plan modification after the City Council’s approval of the plan late last year, a “sham” and FivePoint’s plan itself a “complete overthrow and destruction” of the original plan.

Commission Chair Anthony Kuo disagreed with the characterization.

“Frankly, what I call a sham, is calling what’s out there right now a Great Park,” Kuo said.

Planning Commissioner Mary Ann Gaido said Thursday’s approval was another example of helping developer FivePoint boost its home values at the expense of the public. Liss said it was tragic to see a public resource turned over to the needs and desires of a private developer.

Continue reading at the Orange County Register…