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Garcetti’s legal counsel sues for access to DWP nonprofit financial records (updated)

The LA Department of Water and Power and its union jointly operate two non-profit training institutes that are the focus of a legal battle with the CIty of Los Angeles.
The LA Department of Water and Power and its union jointly operate two non-profit training institutes that are the focus of a legal battle with the CIty of Los Angeles.
Bryan Frank/Flickr Creative Commons

Los Angeles Mayor Eric Garcetti ratcheted up the pressure on one of the most powerful union leaders in the city Thursday in an effort to force him to disclose how $40 million was spent at two Department of Water and Power nonprofits.

The mayor’s legal counsel, Rich Llewellyn, filed a lawsuit against union leader Brian D’Arcy, who represents most DWP workers. The suit accuses D’Arcy of refusing to recognize Llewellyn’s appointment by Garcetti to the boards of the two non-profits, the Joint Training Institute and Joint Safety Institute. Llewellyn seeks access to financial records D’Arcy refuses to show the city controller.

Four DWP management appointees and four union appointees govern the nonprofits. The lawsuit, filed by Llewellyn and the three other DWP board members, accuses D’arcy and the three other union board members of failing to hold meetings. It says D’Arcy is claiming Llewellyn and another new appointee are unqualified.

The lawsuit asks a judge to force D’Arcy to conduct a meeting that includes the DWP management appointees by June 1, and to shut down the two nonprofit institutes if he fails to comply.

"The trustees need to be in place to make sure ratepayer money is not misspent," said Garcetti spokesman Jeff Millman.

A Superior Court judge already has said the nonprofit institutes must submit to an audit by City Controller Ron Galperin. D’Arcy's attorneys have appealed that ruling.

"Mr. D’Arcy’s attempts to keep the trustees from meeting and to keep new appointees from being seated are ludicrous and nothing more than a ploy to keep the activities of these trusts hidden from the ratepayers," said Galperin Thursday night. 

An attorney for D'Arcy, D. William Heine, released this statement to KPCC on Friday:

"The union's trustees have repeatedly said that they are willing to meet with the DWP’s existing trustees to ensure that critical safety and training initiatives proceed on schedule. They will not recognize the mayor’s two proposed trustees because neither meet established qualifications and both have clear conflicts of interest. The Local 18 trustees have invoked the dispute-resolution provisions of the trust agreements, but the DWP trustees have refused to abide by them."

Here’s an excerpt from the lawsuit:

“The board of trustees’ resulting inability to exercise its rights to financial and administrative oversight is particularly concerning given the scrutiny the Trusts face from the city and City Controller…as well as the pending DWP contribution of approximately $4 million due to be paid to the Trusts on or about July 1, 2014.”

The city has given the institutes more than $40 million over the past decade. Tax returns obtained by KPCC indicate institute leaders are spending more than $3 million a year on salaries, travel and office expenses.

DOCUMENT: Read the complaint