L.A. city controller issuing subpoenas as standoff over two DWP non-profits heats up

L.A. city controller issuing subpoenas as standoff over DWP heats up
City Controller Ron Galperin aims to compel Brian D'Arcy, leader of the utility's largest employee union, to show where $40 million has gone.
By Jack Dolan
Los Angeles Times
January 08, 2014

Brian D'Arcy, business manager for Local 18 of the International Brotherhood of Electrical Workers, has blocked attempts by Mayor Eric Garcetti and the DWP Board of Commissioners to inspect the financial records of two DWP-affiliated nonprofits he co-manages.

More than $40 million spent over the last decade to improve labor relations at the Los Angeles Department of Water and Power has, instead, sparked an increasingly tense standoff between a union boss and the city's most powerful elected officials.

City Controller Ron Galperin announced Wednesday afternoon that he was issuing subpoenas to compel Brian D'Arcy, leader of the DWP's largest employee union, to show where the millions went.

The rare legal maneuver came hours after D'Arcy failed to appear in Galperin's office to begin an audit of two DWP affiliated nonprofits D'Arcy co-manages — the Joint Training Institute and the Joint Safety Institute.

City officials began trying to track the nonprofits' spending after a Times report in September showed the city-owned utility had only scant information on how the money has been used.

Since then, D'Arcy — business manager of International Brotherhood of Electrical Workers Local 18 — has successfully blocked attempts by Mayor Eric Garcetti and the DWP Board of Commissioners to inspect the nonprofits' financial records.

Garcetti and City Atty. Mike Feuer appeared with Galperin at a Wednesday afternoon news conference to demand that D'Arcy comply with the subpoenas and cooperate with their attempt to follow the money.

"I think all three of us believe in safety and training and those are important functions," Garcetti said. "If there's nothing to hide with those things let's move on, but we can't move on until we see the information."

The nonprofits were created to improve relations between the city-owned utility's managers and unionized workers following a series of contentious job cuts in the late 1990s. They are run by D'Arcy and DWP General Manager Ron Nichols, and funded with proceeds from ratepayers' electricity and water bills.

There has been no public accounting of the nonprofits' spending since their creation more than a decade ago. Nichols says he supports transparency, but turning over the nonprofits' records requires the consent of both management and labor.

D'Arcy did not return a telephone call requesting comment Wednesday afternoon. The union's lawyer sent a letter to Galperin on Wednesday morning that said the nonprofits were not subject to Galperin's demands for information because they were not "public agencies."

That's the same argument the union made in August when The Times initially requested the nonprofits' financial records under the California Public Records Act. Managers at the DWP, which is a public agency, said they had only limited information about how the money had been spent. Both sides refused to describe the nonprofits' day-to-day activities.

Limited records provided by the DWP show the nonprofits have spent about $1 million a year to pay the salaries of a few of the trusts' top executives: The Joint Training Institute's administrator was paid $212,236 in 2012, the records show. Jon Pokorski, another top administrator and the union president, was paid $171,361 in 2012.

Federal tax forms filed by the nonprofits offer only broad summaries of the organizations' outlays, including more than $360,000 spent on travel from 2009 to 2011 and nearly $2.4 million spent on "other."