Los Angeles Controller Ron Galperin announced Wednesday his office is preparing to issue subpoenas for the DWP's union boss in an effort to figure out how more than $40 million in taxpayer money was spent over a decade-long period.
At issue are two nonprofit trusts, the Joint Safety Institute and Joint Training Institute. The two groups are jointly run by the Department of Water and Power's top management and the leadership of the International Brotherhood of Electrical Workers, Local 18. The trusts, which share office space on the site of a DWP plant in Sun Valley, receive millions of dollars a year as part of the utility's contract with the union.
For months, the controller has requested financial documents, invoices and checks that would shed light on just how and where the money has been spent.
"If you receive and spend public money, then it's a simple principle of transparency," said Galperin at an afternoon news conference with Mayor Eric Garcetti and City Attorney Mike Feuer. "We need to know how that money has been spent. We also need to know whether we're getting a good return on that investment."
But IBEW's Brian D'Arcy and attorneys for the trusts disagree. Rather than show up for a Wednesday morning meeting called by Galperin to discuss the trusts' finances, an attorney sent the controller a letter stating the entities are not public and therefore do not have to make their financial records available. The letter cites an opinion from the state Attorney General that determined the trusts are not subject to the open meeting requirements of the Brown Act.
The city's administrative code "does not provide the controller the authority to audit JSI and JTI because the trusts are not, by any stretch of the imagination, 'charged' with 'safe-keeping or disbursement of public money or securities,'" according to the letter.
The subpoenas for D'Arcy and whoever keeps financial records and minutes for the trusts are expected to be served by LAPD in this week. The deadline to comply with the order will be Jan. 23, according to the controller's office. A spokesman for D'Arcy was not immediately available to comment on the pending subpoenas.
In the meantime, money is still flowing to the trusts because the payments are a contractual obligation between the DWP and IBEW, Garcetti said.
The political arm of IBEW Local 18 spent $3.6 million last year to defeat Garcetti in his mayoral race against Wendy Greuel.