Opinion: Time for Garcetti to shut off the cash flow to secretive DWP nonprofits

The fight over transparency at the Los Angeles Department of Water and Power is only escalating, with yet another lawsuit filed this week over two secretive nonprofits that have received $40 million in ratepayer money.

For the last six months, Mayor Eric Garcetti and City Controller Ron Galperin have made it their mission to audit how the money was spent. They argue that the public has a right to know how public money is used. And last month a Los Angeles County Superior Court judge agreed, saying Galperin has the authority to audit the nonprofit institutes.

That should have been the end of the story. But no.

The training and safety institutes were created and are jointly run by management of the DWP and the International Brotherhood of Electrical Workers Local 18, which represents most of the utility’s workers. All institute decisions are supposed to be made by the trustees — two from the DWP and two from the IBEW.

Yet, the DWP trustees have proven to be utterly powerless in this arrangement. Trustee Brian D’Arcy, who is the business manager of IBEW, has been able to block the release of the nonprofits’ financial records. He’s threatened to sue the DWP trustees if they turn over the documents. He tried to block Galperin’s subpoena of the records, and, after he lost in Superior Court, he’s planning to appeal.

Now, D’Arcy is refusing to even acknowledge the DWP’s new trustees, who replace former General Manager Ron Nichols and another manager who was demoted. The DWP has appointed Garcetti’s lawyer, Richard Llewellyn, and Board of Water and Power Commissioner Michael Fleming. But D’Arcy won’t recognize the new appointees, saying they are unqualified, and he’s refused to schedule a trustee meeting. In the meantime, the institutes keep spending ratepayer money, and the city is required to cut a check to the institutes for another $4 million on July 1.

This week, Llewellyn sued D’Arcy and the other union trustees for failing to uphold the terms of the contract that created the nonprofit institutes. While Garcetti’s lawyers are at it, they should look at voiding the original contracts. There is not enough transparency built in to the structure of these nonprofits, which were supposed to improve labor-management relations. And if D’Arcy won’t even recognize the DWP’s trustees, it’s clear that the institute are not going to be able to function effectively. The city should cut off the cash flow.

Must-read headlines from L.A. to CA:

$40,000 fines upheld against Sen. Tom Berryhill for laundering money, Los Angeles Times

A commission finds state Sen. Tom Berryhill and two GOP committees violated state finance laws in funneling money into his brother’s campaign.

The real House candidates of Beverly Hills, New York Times

News of Rep. Henry Waxman’s departure unleashed a kind of political anarchy on the Botox Belt…. Even so, the existing field reflects the vibrant collection of humanity that resides in California 33. Some are serious candidates, some not — three Republicans, three independents, one Green, one Libertarian, the rest Democrats.

Local govt tax competitions, Fox & Hounds

As reported in the Los Angeles Times, a battle is brewing between Los Angeles City authorities and county transportation leaders, both of whom want a shot at dipping into the taxpayers’ pocket for transportation needs. This battle could portend future clashes of multiple agencies reaching for tax dollars at the same time, especially if state law is changed making it easier to raise local taxes.

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Follow Kerry Cavanaugh on Twitter @kerrycavan and Google+