A longtime Del Rey neighborhood leader is asking the Los Angeles city department that supervises the 90 advisory councils and the city controller’s office to conduct an audit of the local council’s finances a week after its ability to appropriate funds was suspended.
“There is no doubt in my mind that the city of Los Angeles, through DONE (Department of Neighborhood Empowerment), should initiate an audit of the Del Rey Neighborhood Council,” said Mark Redick, ex-president of the Del Rey council. “I think that audit should happen right now.
“As past president for almost two terms, I would welcome it. I would like to see our current treasurer held accountable.”
The Argonaut reported Thursday, July 8 that the local council’s funding had been put on hold temporarily due to a failure to submit bank statements for petty cash statements and other financial information.
City Councilman Bill Rosendahl, who represents Del Rey, attended the July 8 council meeting to swear in some of the new board members but also segued into the frozen assets controversy.
“Whatever that paperwork is that needs to be turned in and that is verifiable and is legitimate, board action on different actions and different issues, turn that in,” the councilman told the board.
Ivan Spiegel, the parliamentarian of the Venice Neighborhood Council, also spoke to the board regarding the council’s funding situation and how it could reflect on other Westside councils.
“What I read in the paper was very upsetting,” Spiegel told the council.
While he took pains to indicate that he was not implying any wrongdoing had occurred, Spiegel did reference a paragraph in the story about other neighborhood councils that are being investigated for alleged misappropriation of funds.
“Those indictments put a black eye on every neighborhood council in the city, even though people might think, ‘it’s not on the Westside, so it’s okay,’” he stated.
Brett Flater, the treasurer of the Del Rey council, said the suspension of the board’s financial assets has been resolved.
“As of today, that’s been corrected,” Flater told his colleagues. “All of the documents have been completed and I’m verifying that with the city.
“I do appreciate everyone’s comments on that, and we are committed as a board to make sure that everyone follows through on that. That’s all been resolved, it’s been fixed, and everything has been taken care of.”
The Del Rey treasurer attributed the delay in turning over the necessary documentation to an election challenge by a former board member. But DONE General Manager BongHwan Kim told The Argonaut the following day that the decision to freeze the local council’s funding was not due to the election dispute.
“It was not related (to the election challenge) at all,” he said.
In addition, Kim could not confirm that his department had received the council’s financial statements.
“When we do receive them, it could take at least a week before we could restore the funding,” he added.
Redick said the suspension of the local council’s funding was very troubling.
“I feel that the current board has a darkening cloud over it,” he said. “One of the reasons that the previous boards of the Del Rey Neighborhood Council were successful is we acted in an era of transparency. Our previous treasurer, Jeriannne Newmann, would answer questions right away.
“In this case, not only do we have a lack of disclosure, but when (the last board) asked questions, they were met with a volatile response from the current treasurer,” Redick continued. “If the treasurer can’t be accountable to the people of Del Rey, then he should be accountable to someone.”
Kim said anyone could request an audit, but he feels it is unlikely that the city controller’s office would do so.
“They recently did an audit of the neighborhood council system, so I’m not sure that they would do one for a single neighborhood council,” said the DONE general manager.
Kim was referring to an audit that he requested earlier this year that showed that DONE had been lax in its fiscal oversight of the local advisory boards.
“Anyone, including any member of the public, can request an audit of any neighborhood council,” Ben Golombek, deputy to City Controller Wendy Greuel, told The Argonaut.
Flater said that he would welcome an audit of the council’s finances.
Stephen Donell, a former treasurer of the Neighborhood Council of Westchester-Playa who has also been a court-appointed receiver, said there is an established framework for pursuing a financial probe.
“With respect to the concept of an audit, DONE and the city of Los Angeles have specific guidelines and policies in place to deal with this very issue,” said Donell, who is a member of the board of directors of the Los Angeles/Orange County Chapter of the California Receiver’s Forum. “All treasurers are aware of those guidelines, or they should be.”
Redick said a lot of civic pride has been created in Del Rey in recent years. The creation of neighborhood events such as Del Rey Day, a higher profile with Los Angeles leaders due to past councils’ involvement in city budget matters and signage that now identifies the neighborhood boundaries are a few of the changes that he named.
But Redick also thinks the revelations of a lack of financial disclosure on the part of the new council could erode the community’s spirit.
“I think the goodwill that has been created could evaporate because there would be a level of distrust,” the former council president said. “When you have someone who operates under a cloak of secrecy rather than in an open era of transparency, how can you expect the people of Del Rey to trust anyone that won’t be open with them?”
Donell said it was important to remember that neighborhood councils are working with taxpayer funds.
“The money does not belong to the Del Rey Neighborhood Council, it belongs to Los Angeles, and each neighborhood council is allocated funding subject to those guidelines and policies,” he explained. “If a (neighborhood council) fails to comply with such guidelines and policies they absolutely should expect an audit and the Del Rey board, in my opinion, should welcome the opportunity to determine the source of the problem.
“The rest of the board should welcome the scrutiny, as it casts a shadow over all board members.”
Redick mentioned an Argonaut investigation last year that found that less than 30 percent of area neighborhood councils had passed city-mandated ethics training. Last August, he presented a motion to the council that would have prevented board members who did not compete conflict of interest training from voting on agendized topics of discussion.
Redick remembered two members of the Del Rey council, Flater and former board member Fred Waltman, vociferously opposed the motion. Waltman claimed the proposed sanction would violate the board’s bylaws.
“I agree 100 percent with Fred,” said the treasurer, who himself had taken the ethics course that day. “I think that it’s a clear violation of the bylaws.”
A month earlier, the Venice Neighborhood Council passed a similar resolution, barring members in non-compliance from voting on financial matters until they had passed conflict of interest training, which DONE representatives said was legal.
Redick thinks Flater’s earlier opposition to sanctions against those who did not adhere to conflict of interest policy and DONE’s recent action is part of a pattern.
“It’s ironic that when we sought to impose an ethical standard last year, that standard was opposed by the treasurer,” he noted.
Redick reiterated that he would push for an investigation of the management of the council’s assets.
“I’m not just requesting an audit,” he asserted. “I’m insisting upon one.”
Spiegel suggested that the local council address the matter of the frozen funding as soon as possible.
“Whatever it takes, fix it. Please,” he implored the board. “Fix it immediately Ö all of you. It’s not just your treasurer. You all have to get it fixed.”