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I have made a tradition of posting a song suitable for the Holidays.

I try to select one that is less than well-known and by artists who may have been forgotten.

This year’s music is by the Chad Mitchell Trio. Although this song was also recorded by Peter, Paul and Mary, the Chad Mitchell Trio was the first marquee folk group to introduce it. Few people recall that the trio also beat Peter, Paul and Mary to Blowing in the Wind and Leaving on a Jet Plane. No surprise that some of their key material overlapped since both groups shared the same producer – Milt Okun.

After Chad left, he was replaced by John Denver and the group was renamed the Mithcell Trio. As before, biting political satire was their trademark, along with crisp harmony. Look them up on You Tube.

Enjoy.

Earthquakes seem to be on the minds of many these days.

Mayor Garcetti floated a long-term plan to retrofit older multi-story and concrete buildings to withstand major quakes.  There will be a price to pay: a modest two-story structure could require around $100,000 to strengthen.  The overall cost will likely be in the low billions of dollars.

A new movie about a 9.0 earthquake on the San Andreas fault is due to be released in May 2015.  It depicts the total destruction of California.

But who needs natural disasters when the LAUSD provides a non-stop stream of catastrophes that burn through piles of money faster than the recent fire took down the massive apartment project in downtown?

Let’s look at the history.

In 2007, the LAUSD launched a new payroll system which cost $90 million.  Chaos erupted as some teachers were overpaid and others underpaid.  The system fix cost $37 million, half of which was recouped from the contractor.  Thousands of teachers had their lives turned upside down; some are still being pursued for overpayments whether or not there is support for the claims.

An audit by LAUSD’s Inspector General disclosed another payroll disaster.  The report, which was issued in January 2010, stated there had been $200 million in payments to temporary staff filling positions for which the funding had expired.  It was also unclear what services were being performed by these employees.

More recently, we have seen a string of costly failures.

There was the mismanaged rollout of IPads, a project that dipped into school construction bond money – funds that should have been dedicated to brick and mortar improvements, never mind what attracted the FBI to conduct its own investigation. Only the nuanced interpretation by the LAUSD’s internal legal minds claimed it was a legitimate use.

Maybe LAUSD was doing us a favor by diverting the construction funds considering the costly excesses attributable to the construction of the Belmont Learning Center as well as the Robert F. Kennedy complex, located on the site of the old Ambassador Hotel. The latter is the most expensive facility in the system’s history.  It was approaching $600 million as of 2010.

MiSiS (My Integrated Student Information System) is a trainwreck in process. The failure of this system is preventing some students from scheduling courses required for graduation and making it difficult, if not impossible, to release accurate academic transcripts.

The cost to fix the system could easily exceed $100 million.  It has already resulted in a hiring freeze.

To make matters worse, MiSiS was the replacement for ISIS (not related to the Syrian gang, but that’s the only good news). ISIS was considered unsatisfactory. Its sticker price was $43 million, but I am unsure how much of that was actually paid.  There was a $12 million dollar payment the LAUSD claims it made in error to Harris Education Consulting due to a contract snafu (what other type of contracting is there at LAUSD?).

What all of these failures have in common is the absence of competent management.  The ultimate responsibility rests with the Board, the members of which approve the budgets and directly or indirectly approve the hiring of executives charged with the administration of the system.

These are past and present Board Members who were around for almost all of the meltdowns (year shows when elected). If a member is not shown, he/she was elected only recently:

Monica Garcia  2006 (Still in office)
Steve Zimmer 2009 (Still in office)
Tamar Galatzan  2007 (Still in office)
Marlene Canter  2001
Yolie Flores Aguilar  2007
Julie Korenstein  1987
Richard Vladovic  2007 (Still in office)
Bennett Kaysar 2011 (Still in office)

If members are incapable of managing and controlling the performance of the highest ranking executives in the system, if they lack the ability to understand or question big-ticket project progress reports, then it is time to send them packing before they bankrupt the school system.

Everyone knows I like to write.

But only those who are personally acquainted with me know I like to talk.

And I can talk with the best of them, which is why I have always desired to have a radio show of my own.

So when I read that KABC’s Larry Elder was leaving, my spirits picked up.

KABC is one of the few stations that focuses on local issues as much as it does on national events. For the record, I haven’t listened to Mr. Elder in a very long time, and tended to disagree with him more than not when I did.

My broadcast media experience is thin, but I handled myself well when appearing on NPR, KABC and Fox. Of the three, NPR offers the best format to make a point. Unfortunately, it doesn’t fit the model of commercial media very well. That’s not to say a hybrid approach can’t be developed that minimizes talkover by the host and discourages guests from going off on tangents.

I could also serve as a voice of moderation for the station. I am A Blue Dog Democrat and proud of it. My philosophy is simple: we can have anything we want as long as we are willing and able to pay for it. If there is a consensus to increase social spending at the expense of funding defense, so be it. But we have to pay for it, especially when our national debt is nearly equal to 100% of GDP.

Outside of fiscal issues, I support gun control, gay rights, separation of church and state, and believe that applying the brakes to population growth will be the only way to arrest climate change.

Partisan politics is the worst enemy of democracy. I refuse to watch MSNBC and Fox and annoyed when people post mindless memes on Facebook that are nothing but partisan talking points or slogans.

My favorite broadcast news source is Aljazeera America and newspapers are still my primary source for information.

As a talk show host, I would invite more Neighborhood Council activists on the show, along with other local leaders from the general public.

I have been deeply interested in international relations since fourth grade when the good Irish Christian Brothers made Time Magazine’s world section required reading. Looking back, it must have been startling for adults to listen to a bunch of nine-year-olds discuss NATO, the Soviet Union, Cuba, DeGaulle and Nasser. We probably made more sense than some of the talking heads you hear today.

If anyone from KABC is listening, please consider me. If not Elder’s time slot, another could do.

Just to be safe, I am not quitting my day job.

It’s the start of the Holiday season and Controller Ron Galperin is going to check his list to see who has been naughty or nice in the city.

In the case of Brian D’Arcy, the head of the influential IBEW Local 18, the union representing most of the DWP’s workers, it will be an audit checklist which determines if he finds coal in his stocking. Not from the Navajo generating station either.

The very first city audit of the controversial nonprofit trusts, which will start in early December, has already been saddled with a handicap in the form of a restriction as to how far Galperin can look back. Only data from the most recent five years will be open for examination. That’s a limitation almost any CPA would find unacceptable, but Ron lives in the world of politics. With hardly any support from the City Council, several of whom depend on support from the union, he will have to make the best of it.

In reviewing a sample of transactions from the data provided, Galperin will need to consider two benchmarks to determine whether any are inappropriate: those that are permissible under the by-laws and internal policies of the trusts, and those that are in the best interests of the ratepayers.

Do not assume for a moment that the benchmarks overlap.

What may seem perfectly reasonable to the union could amount to poor value for the money to the ratepayers, especially considering the DWP corporate safety program (the trusts ostensibly exist to improve safety) is funded by over $100 million from the utility’s annual operating budget. By contrast, the safety programs managed by the trusts are fully funded by the city’s contribution of $4 million per year – $1 million of which goes to salaries! How many of you would donate to a nonprofit organization that takes 25% off the top for payroll before adding other administrative costs?

To get a sense of how the trusts have been managed and operated, it will be important for Galperin to review the bylaws and minutes from board meetings – including how the trustees voted on important matters, such as determining delegations of authority, key hiring decisions, budgets, approval of financial statements…..

Ron and his auditors should interview past and present members of the boards, the staff, the external auditors and any other contacts of the trusts to gain insight into what are arguably the most covert bodies in the city. Subpoenas may be required and the City Attorney may have to step in.

It will be important to review individual transactions in the context of the entire history – ideally that would amount to all years, but the five-year limitation will make that difficult. The risk is that a one-off event may seem inconsequential by itself, but when combined with others could disclose a questionable trend. I would be particularly interested in events and transactions that occurred in the formative years of the trusts, but that period is blacked out, and it may take another court battle to get access – that’s assuming the City Council would even press the issue. Given that the City Council approved this substandard audit settlement, one must question the resolve of the members.

Galperin must demand an answer as to why the trusts have $12 million in cash squirreled away as of June 2013, probably $13 million by now. That represents more than three times the annual operating expenses. The trusts are organized under IRC 501c(6) and can support political causes and attempt to influence legislation. $12 million can go a long way in that regard.

I am less than optimistic we will learn enough from the audit, but it may be enough to provide political cover for the City Council. It will provide the appearance of progress, enough to sell to the ratepayers, many of whom may not be informed enough to question the judgment of their council members.

For those who are concerned about transparency and are following this conflict, let’s support Ron by using every opportunity to corner your council member and insist on complete, unfettered access to all records and persons associated with the trusts.

It is the holiday season and the networks will be rolling out Christmas classics soon.

Miracle on 34th Street is usually among the first to show up on our home screens. The film juxtaposes commercialism with sentimentalism, not unlike the contrasting approaches of the opposing candidates in the 39th AD.

Well, Thanksgiving and Christmas arrived a little early for the good people of the 39th Assembly District.

Almost an unknown and virtually unfunded LAUSD parent volunteer, Patty Lopez, holds what might be a safe lead with another tally of provisional and mail-in ballots scheduled for Monday. The race was one of the tightest in memory.

Her opponent, Raul Bocanegra, the incumbent for the Assembly seat, had cash to spare, even playing Santa Claus for his friends running in other races deemed to be competitive.

How Lopez put herself in a position to snatch the seat right from under him will be debated for a long time.

In my view, her victory – if it holds up – will not be a template others can easily apply successfully.

It may have been a confluence of factors – a perfect storm in an electoral sense.

Party affiliation was not a factor; both are Democrats.

Could it have been affinity?

Lopez projects a much friendlier and trusting persona. Her cultural roots probably helped – she was born in Mexico and her Spanish dialect may have been comforting to the voters in the district, which counts many immigrants from Mexico in the registration rolls.

By contrast, Bocanegra looks like he was cut in the mold of a hand-picked PRI candidate. I am not implying he follows the PRI’s lackadaisical approach to dealing with corruption, but were the voters of the 39th wary of anyone who comes across as an apparatchik of a party machine?

Bocanegra made his work on enacting credits for film production a focal point of his campaign. All well and good for the industry, but no measurable impact on the district.

Bocanegra may have been a victim of his own success in the primary where he finished 40 points ahead of Lopez. Arrogance can be a politician’s worst enemy and the incumbent most likely thought he was bulletproof as a result. Even Bob Hertzberg did not take his State Senate campaign against a financially strapped unknown lightly. Mailers, neighborhood council and HOA appearances were a staple of Big Bob’s strategy right to the end. He threw in more than a few hugs, too.

Assuming a victory is confirmed, how will Ms. Lopez be received by the Assembly’s leadership, not to mention Bocanegra’s colleagues? Will they toss her a bone, assign her to an obscure committee or one where the chair suppresses her input? After all, Lopez knocked off one of their own.

If so, the Democrats do so at their own risk. Lopez is now a very public figure in light of the publicity she has received for her improbable showing. They cannot afford to disrespect her without accusations of gender and even ethnic discrimination.

More importantly, how will Lopez deal with success?

I certainly do not see her even nudging the ideological mix of the Assembly. Will she fall prey to money from lobbyists?

Ms. Lopez would be starting off with a clean slate if the current results hold up. That’s her ace in the hole. She owes nothing to anyone except her constituents. Let’s see how she plays her hand.

My interview with KABC

It was a pleasure to talk to KABC’s Doug McIntyre about the scandalous settlement between the city and the union representing DWP workers – IBEW Local 18 – over the City Controller’s right to audit two controversial and secretive trusts controlled by the union and fully funded by the ratepayers.

You may want to read my latest article on the subject.

http://www.citywatchla.com/lead-stories-hidden/7883-settlement-between-city-and-dwp-union-flawed-but-important-first-step

The settlement will enable us to learn something, but no where near enough about the operations of these trusts.

Here’s the link to the broadcast.

A deal with the devil

The settlement between the City and the IBEW Local 18 regarding the City Controller’s right to audit the controversial nonprofit trusts represents an important step forward – but only a baby step.

Regardless, we owe Controller Ron Galperin our full support as he continues to press for further access to the trusts’ records through the courts. God knows he is not receiving much, if any, backing from the City Council. Mayor Garcetti and City Attorney Feuer appear to be the only public voices standing behind him.

The agreement allows an audit of the records for the last five years. It’s an important start in as much as time is against the City. The longer the process is delayed, the more likely key data and documentation could be misplaced or altered. It might already be too late in some instances.

It would ordinarily be spurious to suspect fraud before conducting an audit, assuming the absence of any red flags. However, the stonewalling by union boss Brian D’Arcy represents a bright crimson banner.

After reading through the agreement, I have the following concerns:

The city’s representatives to the Trust Boards will be limited to the General Manager of the DWP and other managers of the utility appointed at the discretion of the GM (Section II.1).

With all due respect to Marcie Edwards, the current GM, she is in a position where she must deal with D’Arcey on a regular basis. In a sense, both of them are in a symbiotic relationship when it comes to directing the personnel and resources of the giant utility – hardly the degree of independence you would want in a board member. Therefore, it is important that Mayor Garcetti have full discretion to appoint people who can cast a fresh set of eyes on the activities related to the trusts, free of the daily pressure D’Arcy is capable of applying.

After the completion of this audit, the five-year period will be off limits for further testing, especially any substantive audit work (Section II.5.11). The agreement states: “..the Controller agrees that he shall not conduct any further audit of the Trusts solely for the five fiscal years covered by this Agreement and shall not cause to be issued or seek to enforce any subpoenas in support of an audit, or otherwise attempt to gain possession, custody or control of any TRUST Documents, for those fiscal years.”

In other words, Galperin gets one shot at it. So, if the City is eventually allowed to audit other years, and a suspicious transaction is uncovered in the course of that audit reflecting on activity in the closed periods, it will be tough luck for Ron. It would make it difficult to connect the dots for a pattern of abuse spread over a long period.

It is also conceivable that D’Arcy could block the city from using data from a closed period to look backward. For example, a single transaction in a recent year that appeared to be reasonable as a one-off event might take on a new meaning if considered in light of an older one.
Although the agreement uses the term “unfettered access,” nothing is unfettered unless it can be viewed in the full context of events.

Denying the issuance of subpoenas related to the activities of the closed years bestows the same client confidentiality advantages enjoyed by attorneys on the CPAs employed by the trusts. In other words, D’Arcy can claim the equivalent of attorney-client privilege, essentially securing any relevant evidence from the public’s view.

Notwithstanding the above limitations, Ron is capable of making the best from a weak hand. But let’s not put him in a position where he is trying to win at solitaire with only 51 cards.

As I stated earlier, it is important we support him and, equally important we put pressure on our City Council representatives to back Ron publicly – because D’Arcy has proven to be a master at dividing and conquering.

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