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Archive for February, 2014

If you followed NBC’s coverage of the Sochi Olympic Games, you would have barely realized there was a popular uprising against tyranny in neighboring Ukraine.

Had Bob “Pink Eye” Costas and crew been around for the 1936 Berlin Games, they would have presented them as “Springtime for Hitler and Germany.”

I could forgive NBC for barely mentioning the murder of protesting civilians in Kiev if the Games had been staged in Norway, but the slushy $50 billion spectacle in Sochi was being hosted by Vladimir Putin.

Bob Costas managed to make an indirect, passing reference to the bloodshed on the next to last night of coverage. A classic case of too little, too late.

Putin was the architect of the unrest in Ukraine. Since he assumed power in Russia, Putin has been bullying and extorting the nation that emerged in 1991 after 70 years of Soviet oppression. The last straw was interfering with Ukraine’s desire to align with the EU instead of a Russian-controlled economic bloc, an hegemony that would virtually set the calendar back to the Soviet era.

His lap dog in Ukraine, Viktor Yanukovitch, condoned – if not ordered – the slaughter of demonstrators in Kiev by cowardly sniper fire. He has since taken refuge in the city of Kharkiv, on the border of Russia in eastern Ukraine, a section of the country sympathetic to Moscow.

Putin never showed an ounce of concern for the violence he helped foster as he made the rounds at Sochi. It was Mother Russia uber alles. Ukraine’s unwillingness to play along with Russia’s economic and strategic game plan was making him look weak at a time when instability in that part of the world, and even in the heartland of his own country, could undo his influence.

Dictators never like to appear weak. Although Putin is not a Joe Stalin, he is at least a mini-me version of Uncle Joe.

Russian allies Syria and Iran would probably feel a little uneasy, too, if average, everyday people were not afraid to challenge their benefactor.

NBC’s whitewash of the Ukrainian Revolution during the Games is the testament of the power of money. Were the suits afraid Putin would pull the plug if their broadcast team sought opinions from the spectators or athletes? Or was it fear that the IOC would blacklist the network?

This much I am sure of – the old Jim McKay-led ABC team would have at least made some fuss about the crisis and Putin’s hand in it.

McKay was the ABC anchor for the tragic 1972 Munich Games. He did not flinch from his responsibility as a journalist. He reported the murder of the Israeli athletes and the failed attempt to rescue them like a news professional in the tradition of Walter Cronkite and Ted Koppel.

But the 1972 slaughter occurred at Munich, not hundreds of miles away, so how can one compare the coverage of the two Olympiads?

While not a drop of blood was spilled at Sochi, save some cuts and bruises suffered by members of Pussy Riot, the man pulling Yanukovitch’s strings was ever-present for NBC’s cameras.

Matt and Bob pretended it was just another Today show.

Remember that the next time you tune into an NBC broadcast.

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Imagine if your bimonthly DWP bill included a line that stated “reserved for political activity.”

Would you be upset?

Well, $11.8 million of your ratepayer money is sitting in the accounts of the DWP’s Joint Training and Safety Institutes. The two nonprofits fall under 501(c)(6) of the Internal Revenue Code.

Unlike a 501(c)(3), where campaign spending and lobbying are forbidden, a (6) is free to spend on political activity.

This stash of cash is over three times the annual operating expenses, so its purpose must be more than a rainy day fund.

Then what is it for?

It is time to put that question to all present and past members of the boards of the two nonprofits. I certainly do not expect IBEW boss D’Arcy and his crew to provide an answer. But do you think we might be able to squeeze some information out of the boards’ DWP management representatives?

I really do not know, but I suspect no one is trying very hard.

Sure, everyone is waiting for the courts to rule on whether D’Arcy must hand over financial records, but those financial records may not provide a clue as to what’s in store for the $11.8 million cash balance.

Subpoenas should be issued for all the board members as well as the accountants and the trusts’ managers. Make them testify under oath. If any of them assert their fifth amendment rights and refuse to testify, they will not be shielded from the court of public opinion.

In the end, public opinion will largely decide who the villains are.

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Change has to start at the top, and the DWP needs serious change. Garcetti’s moves since assuming responsibilities of mayor are consistent with his promise to reform the utility.

The most encouraging news on the DWP front of late are Garcetti’s appointment to the boards of the two secretive nonprofits and the hiring of a new general manager.

Since replacing four of the five DWP commissioners, essentially sweeping out the Villaraigosa lackeys, other changes have followed. Assistant GM Aram Benyamin, who has been tagged as an ally to IBEW18 Boss D’Arcy, is on administrative leave. Benyamin also served alongside Ron Nichols on the boards of the Joint Training and Safety Institutes nonprofits. Another manager, Chuck Kokaska, retired soon after he failed to provide an adequate explanation of the trusts’ activities.

The new GM is Marcie Edwards. Her record is unblemished and she knows what it is like to navigate the municipal landscape owing to her extensive experience as Anaheim’s City Manager and Manager of Public Utilities. It has been many years since she worked for DWP, so it is likely she is very independent from D’Arcy.

Edwards will join Richard Llewellyn on the nonprofit boards. Lewellyn is Garcetti’s legal adviser and has not previously been associated with DWP’s operation.

The two are a fresh set of eyes who understand the importance of accountability to the ratepayers, unlike Nichols, who trembled in the shadows of D’Arcy.

The battle over the financial records of the trusts is larger than their materiality to the DWP as a whole.

The steady infusion of $4 million per year to a pair of virtually unregulated entities is proof of a corrupt culture governing what is arguably the most important service to the residents of the city. The accumulation of a $11.8 million stash in the accounts of the trusts shows just where the priorities of Nichols and D’Arcy, along with their colleagues, were (and still are).

Exactly what are the plans for that money?

At the current rate, the cash balance will continue to grow unless the funding ceases – it is already over three times the amount of the annual operating expenses. The commissioners are opposed to further funding, but who knows if their decision will not be challenged by the union? Just consider the roadblocks Controller Galperin is facing with the audit.

What, if any, proven advantage is there for using separate bureaucracies to manage safety programs?

While there has been no oversight to pouring money into these questionable trusts in years past, the DWP’s IT capabilities have been allowed to deteriorate. We could have used some of that money to upgrade systems. The botched rollout of a new billing system – a direct result of mismanagement – will likely be costly to fix and make cash flow difficult to manage, not only for the DWP, but many of its customers who have been billed incorrectly.

What’s more important? Hiding cash or serving the ratepayers? Or rewarding IBEW employees with the highest compensation in the city and at least one of the highest in the industry?

This is D’Arcy’s legacy with help from his enablers – Nichols, Freeman and Nahai…also Villaraigosa.

Garcetti’s strategy has been measured. Some say too slow.

I think the pace is about right when you consider the damage that must be undone from years of cronyism.

As ratepayers, we need to keep pressing for DWP reform – a commitment to efficiency and freedom from union politics.

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The Queen’s Gambit is an opening chess move initiated by the player of the white pieces. The black player can accept or decline the gambit, affecting the subsequent strategy of the game.

IBEW Local 18 boss Brian D’Arcy is attempting to cool the pressure on his union to allow access to financial information of two controversial trusts by providing existing internal audit reports instead.

Right.

That would be the same as allowing a litigant to cherry-pick the evidence for a trial.

Enron and other corrupt organizations had internal audits, too. For that matter, the external auditors (who are routinely chosen by the boards of organizations), were also in on the shenanigans.

D’Arcy’s move is nothing but a gambit, one which should be declined by Ron Galperin and Mike Feuer.

Sure, take the internal reports for what they are worth, but do not relinquish the pressure on the union chief as he attempts to elude transparency.

You see, internal audit reports have limited value. If you were an investor, you would place little reliance on them in making buy/sell decisions. Internal audits are more focused on policies and procedures within an organization, even more so for one that is not traded.

In the case of the two institutes, if the underlying policies and procedures support objectives that are not in the best interests of the city’s residents, a clean report will not necessarily disclose problems.

Nothing short of an independent audit, with auditors selected by the City Controller, will pierce D’Arcy’s stone wall and provide an unbiased look at the Joint Institutes for Safety and Training.

Ron Galperin must set the audit objectives and devise the approach with an outside CPA firm not connected with the city or its related entities.

It appears that this chess game will go on for a long time.

Nothing short of checkmating D’Arcy will get to the truth.

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A Six-Ring Olympics

The Olympic flag depicts five interlocking rings, each in a color used in the flags of the participating nations.

There is a sixth ring in this year’s event – the Ring of Steel.

Host nation Russia claims to have implemented a lockdown security plan to protect the Sochi site from neighboring terrorists. The resources devoted to preventing mayhem from intruding on the world’s largest stage is probably the most concerted defensive effort in that part of the world since the Red Army saved Stalingrad (now Volgograd). A side note: the presence of the German Olympic team will probably represent the largest organized penetration by Germany of Mother Russia since the Wehrmacht’s advance in World War 2.

Sochi is just a few hundred miles to the south of Volgograd, a short distance by today’s standards. Volgograd was victimized by a terrorist attack this past December, one of several such acts committed by Chechen rebels throughout Western Russia.

An attempted attack somewhere within the proximity of the Games is almost a certainty. Even if the ring of steel remains intact, the psychological damage to all present will be significant if violence erupts anywhere within reach of transportation corridors.

The Russians appear confident they can head off any threat to the Games. In a country where judicial due process is arbitrary, we can expect draconian tactics – overt or covert – to round up suspects. The security forces will have latitude to arrest or detain anyone who looks the wrong way or tarries too long in one spot. When you have a leader like Vladimir Putin, who cut his teeth while serving the KGB, what would you expect?

Is there such a thing as the Olympic spirit in this type of environment?

It is reasonable to push the envelope of precaution when a threat exists. Even if there is no apparent threat, measures must be taken whenever people gather for a highly publicized event. Just look at the precautions for the Super Bowl – Blackhawk helicopters and fighter jets. If there were a blimp there would be a contingent of SEAL snipers on board.

But when you apply extreme security in a country with a long history of xenophobia, homophobia and an aversion to human rights, the result is likely to shock the senses of the civilized world, even if no terrorist acts are committed. It is conceivable that more gays than Chechen operatives will be apprehended!

Whether Russia will go too far in dealing with the very real threat of terrorism, the dangers facing visitors, athletes and the Russian citizens themselves has been a frequent subject of discussions. However, the irresponsibility of the International Olympic Committee has been noticeably absent from media talking points.

The IOC put politics before safety. In an attempt to be inclusive and appease a powerful leader, thousands are being put in harm’s way. It wasn’t as if they were unaware of the region’s volatility when they awarded the Games to the rather obscure resort in the Western Cauausus.

What’s next? A summer Olympics in Nigeria? Well,at least e-mail service would be pretty good there.

We can’t – we must not – stop life in the face of terrorist threats.

But we need to apply common sense, too, especially when much safer options are available.

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