L.A. Utility and Union Pressed to Account for $41 Million Spent by Mysterious Non-Profits

Friday, November 22, 2013
(graphic: Lawrence Lessig)

Eight years ago, LA Weekly looked at the mysterious doings of two non-profit organizations—controlled by unions and funded by the Los Angeles Department of Water and Power—and pondered in a headline: “Where’s the DWP’s $12 Million?”

On Tuesday, inquiring minds were still wondering how the money was spent, but the size of the unaccounted-for funds had grown to $41 million. So, under growing pressure from the public, the DWP board of commissioners voted to cut off funding and ask the city controller to audit the organizations.

The Joint Training Institute and the Joint Safety Institute are co-run by DWP’s general manger and the International Brotherhood of Electrical Workers Local 18 business manager. They were established in 2000 and 2002, meet in secret, have no oversight by the city or DWP and receive up to $4 million a year in funding.

It is unclear what the two organizations actually do. The ordinances that established the two groups aren’t specific about how they should spend their money and city records merely identify vague intentions. The Los Angeles Times said they were meant to promote “communication, mutual trust and respect” between DWP management and unions, and “identify” training and safety as important department values. 

The five-member DWP commission, appointed by newly-elected L.A. Mayor Eric Garcetti, met a month ago to consider the mayor’s request that an audit be started. Instead, they opted to give the non-profits a month to do their own internal study and report back. They selected a company that does their taxes to put together a report, but on Tuesday DWP General Manager Ron Nichols had nothing to tell commissioners.

Times columnist Steve Lopez said Nichols told them, “My understanding is that the audit is underway.”   

The commission thanked Nichols, temporarily cut of their funding and ordered newly-elected City Controller Ron Galpin to start the audit. Mayor Garcetti was elected after running a campaign that vilified his opponent, Wendy Greuel, as being too cozy with the DWP and its powerful union leader, Brian D’Arcy.

Although not much is known about how the non-profits operate, a Times request under the California Public Records Act revealed that $1 million a year is used to pay salaries for some of the top executives. Tax records offered little illumination. For instance, they spent $360,000 on travel between 2009 and 2011 and $2.4 million on “other.”

–Ken Broder


To Learn More:

DWP Board Requests Audit of Union-Linked Nonprofits (by Sharon McNary, KPCC)

L.A. DWP Officials Vote to Cut off Funding for Two Nonprofits (by Jack Dolan, Los Angeles Times)

DWP Going under the Microscope at Last (by Steve Lopez, Los Angeles Times)

Eric Garcetti Loses a Round in Cage Match with DWP Union Boss (by Gene Maddaus, LA Weekly)

DWP Says It Can’t Track Millions in Ratepayer Money (by Jack Dolan, Los Angeles Times)

Where’s the DWP’s $12 Million? (by Jeffrey Anderson, LA Weekly)

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