State Panel Debates Audit

A former special investigator for the Los Angeles city controller questioned Wednesday whether the office is too close to the city attorney to fairly determine whether Los Angeles is spending too much on outside law firms.

As the state’s Joint Legislative Audit Committee debated whether to launch an audit of city payments to law firms, Daniel Carvin, who has sued the city claiming he was fired after questioning law-firm billings, told the panel that the controller’s staff has been “reluctant in the past to look at any kind of billing by any attorneys.”

Carvin and his attorney, Louis Cohen, said in an interview that City Controller Laura Chick is too close to City Atty. Rocky Delgadillo, whose office approves the hiring of all contract attorneys and oversees their work. Carvin also said Chick’s office is not independent enough to do an audit, because Delgadillo provides the controller’s legal counsel.

State Sen. Richard Alarcon (D-Sun Valley), who is running for mayor of Los Angeles, asked for the state audit after The Times reported that the city paid $18.9 million last year to 71 law firms for outside legal assistance, twice the amount spent five years ago.

The increase came as 50 of the law firms involved and their attorneys contributed hundreds of thousands of dollars to Hahn and Delgadillo.

In a major show of force, five high-level city officials, including Deputy Mayor Carmel Sella, flew to Sacramento to oppose state audits of city contracts with outside attorneys and the finances of the Department of Water and Power, noting that Chick plans audits of both matters.

“A state audit of the city attorney is duplicative and a waste of taxpayer dollars,” Sella said.

Faced with the conflicting testimony and the departure of some members to another meeting, the panel failed to muster enough votes to approve the state audits Wednesday and put off a final vote until today.

“We must have touched a nerve to have so many people come up,” said state Sen. Dean Florez (D-Shafter).

Florez joined Alarcon in asking for a state audit to determine whether the DWP’s transfer of $300 million in surplus funds to the city general fund is legal.

The city delegation included Chief Deputy Controller Marcus Allen, Chief Deputy City Atty. Terree A. Bowers, acting DWP General Manager Henry Martinez and DWP Assistant Chief Financial Officer Robert Rozanski.

Allen told the legislators that Chick is auditing the DWP and plans to audit the city attorney’s spending sometime after Jan. 1.

To keep the pressure on, Alarcon amended his proposal to have the state drop any audit if Chick completes her audit by Jan. 1, something Chick has said is not planned.

State Sen. Tom McClintock (R-Thousand Oaks) said the state audits are not justified.

“Mismanagement of L.A. city government is the responsibility of the city, not the rest of the state,” McClintock said. “It’s not the problem of anybody outside Los Angeles.”

Alarcon said he is continuing to press for a state audit, in part, because of the testimony of Carvin, who worked for the Metropolitan Transportation Authority inspector general for six years before becoming a special investigator for the city controller in March 2002.

Carvin alleged he was fired in June 2002 after he raised questions about whether private attorneys were overbilling the city for work on a false claims case against a construction contractor on the Hyperion Treatment Plant expansion.

Alarcon said Chick’s promise to audit attorney spending is contradicted by a deposition in the Carvin case in which auditing supervisor Farid Saffar said, “ ... I had specifically cautioned Mr. Carvin that I would not approve any audit or investigation into possible overbilling by outside attorneys because of the special skills needed to do so.”

Carvin also released an e-mail from one employee of the city attorney’s office to another indicating that “Laura would call Rocky” in the event she decided to look at the handling of a case by outside attorneys.

Chick disputed that she is too cozy with Delgadillo politically, noting she endorsed his opponent, Mike Feuer, in the last election.

Chick said that her office never ruled out an audit of attorney contracts and she will not pull punches in determining whether outside law firms are worth the cost.

The controller called Carvin a “disgruntled former employee” who had overstepped his authority.