Battle Over Public Disclosure of DWP Trust Money Acccounting Grows

Trustees of two groups that received about $40 million in ratepayer funds from the Department of Water and Power continue to rebuff requests by City Controller Ron Galperin for financial data, DWP officials said Tuesday.

After expressing frustration at the failure of the two trusts to complete their own internal audits, members of the DWP Board of Commissioners last month called on Galperin to proceed with an independent probe into the spending activity of the Joint Safety Institute and Joint Training Institute.

City officials complained that the two trusts, which together receive about $3 million to $4 million a year from the DWP as part of a collective bargaining agreement with the International Brotherhood of Electrical Workers, Local 18 -- the union representing DWP workers -- have not provided a full accounting of how the money has been used.

The groups have received a total of about $40 million over the last decade, according to estimates by city officials.

DWP General Manager Ron Nichols, who sits on the board of both trusts, told commissioners Tuesday that the union and DWP management were "deadlocked" on providing the data.

"I don't agree with the stiff-arm approach that's been undertaken by the union members of the trusts," he said.

The DWP Board of Commissioners Tuesday instructed DWP managers sitting on the boards of both trusts to withhold approval of any future checks that come before them. If they are unable to do that, they asked that DWP management keep a record of any checks that are approved and any transactions that the trusts make.

"Every day that goes by, it looks worse," DWP Commissioner Jill Banks Barad said. "Where there's smoke, there's fire. I don't see why the union boss doesn't see that."

The head of IBEW, Brian D'Arcy, Tuesday held fast on keeping the trusts' financial information confidential.

"The trusts are independent and exist for the benefit of their members," D'Arcy said. "There has been a deadlock between the trustees and we expect this dispute to be resolved as the trust rules require."

In a letter to the union, Galperin said he is expecting representatives of the trusts to provide the requested information in the next few weeks and to show up for a Jan. 8 "audit entrance" meeting at his office.

"As a matter of principle, no entity that refuses public disclosure should receive a dime of the public's money," he said. "We are moving forward with the audit to ensure that ratepayer dollars are protected."

Galperin also enlisted the help of City Attorney Mike Feuer, who issued an opinion Tuesday contending that under the city charter, the controller has the authority to audit the two trusts, "which are funded by public dollars."

Galperin is also authorized to issue subpoenas and begin a "fraud, waste and abuse" investigation into the trusts that would look for any "alleged 'use of city resources in a manner contrary to law or city policy' and any alleged 'extravagant or excessive expenditure of city funds above and beyond the level that is reasonably required' to accomplish public purposes," Feuer wrote in his opinion.

"I will do everything in my power to assure the controller obtains the information he needs to conduct a thorough audit that promotes the transparency our ratepayers deserve," Feuer said.

- City News Service