Pasadena embarrassed by charges that employee embezzled $5 million

Pastor Danny Wooten had a reputation as a rainmaker for the church he founded.

He raised money to renovate a Pomona building into a home for his fledgling congregation, the New Covenant Christian Fellowship Center.

One of the ways he raised funds, he said, was through a traveling gospel act that crossed the country performing a play he wrote and directed.

But Los Angeles County prosecutors say he had another method: He stole it from the city of Pasadena.

Wooten is accused of embezzling more than $5 million over the course of a decade while working as a management analyst for the city, according to court and city documents. The money went to his church and other entities, often using bank accounts under his name, prosecutors allege.

The allegations have embarrassed a city that takes pride in good government as well as an iconic New Year’s parade that showcases civic spirit to the nation. In the weeks since this year’s Tournament of Roses, angry residents have berated officials and compared Pasadena to the city of Bell and its recent massive corruption scandal.

“I’m a taxpayer in this city, and I’m mad as hell,” Brian Weiss told a packed City Council meeting.

Fueling outrage is an audit that has revealed poor oversight and multiple accounting lapses. Residents also have questioned Pasadena’s decision to lay off its only staff auditor in 2011 to cut costs. And former employees have described a culture of complacency.

Pasadena officials defend the city’s practices, saying this is the first embezzlement case they could recall in recent history. The city, they said, has strict rules on how its money is spent but some employees failed to follow them in Wooten’s case.

“Over time, in the absence of any serious misuse of public funds,” Mayor Bill Bogaard said, “it has led to a feeling that it isn’t important to dot all the i’s and cross all the t’s.”

Using forged signatures and fake documents, Wooten is accused of plundering a special fund he oversaw that is used to bury overhead utility lines underground.

Auditors said Wooten authorized more than $6.4 million in questionable payments. An audit commissioned by the city concluded that Wooten directed more than $3.5 million to Tyrone Collins, the owner of Altadena-based contracting firm Collins Electric; nearly $713,000 to New Covenant Christian Fellowship Center; $2.1 million to the Southern California Evangelistic Jurisdiction, another church he was affiliated with; and nearly $44,000 to Melody Jenkins, a former temporary Pasadena city employee and member of New Covenant.

City officials say they don’t know how the funds were used and are still trying to locate a lot of the money.

There is little outward indication that Wooten and his family lived extravagantly. They live in a two-story, stucco tract home that borders an industrial area in Montclair.

Jenkins posted bail last week, but Collins and Wooten remain behind bars. All three have pleaded not guilty. Wooten’s attorney did not return calls for comment.

The criticism of Pasadena’s accounting comes despite its multiple accolades. The California Society of Municipal Finance Officers has recognized the city for budgeting excellence at least five times since 2006. For the last eight years, the city has received the Distinguished Budget Presentation award from the Government Finance Officers’ Assn.

“People don’t expect corruption and malpractice here,” said Peter Dreier, a professor of politics at Occidental College and longtime Pasadena resident.

Auditors found that Wooten had inflated his work history when he was hired by the city’s Department of Public Works in 2002. He said he had worked for a year as a financial analyst at KPMG — the company that did the audit. The firm said Wooten worked there only five months, as an assistant.

Wooten had unusual authority over the underground utilities fund, according to the audit. He submitted contractor invoices and had a role in approving them, as well as ensuring that contractors did the required work. The audit found that the city gave too much responsibility to someone viewed as a trusted employee.

“He was seen as a good, churchgoing, married man who was a responsible city employee,” said Sheri Stevenson, who used to work in the public works department. “Everyone liked him.”

By the summer of 2003, auditors found, Wooten had begun to siphon money from the utility fund.

He used his office computer to make false invoices, the audit said. Some invoices had signatures from supervisors, others had forged signatures, and some forms had no signatures at all.

“The quality of the documents,” auditors wrote, “and the descriptive detail of the information provided on the documents deteriorated over time.”

Without proper supervision, the problems went unnoticed. After 2006, the fake invoices didn’t include basic information, such as the addresses of the properties where the work was supposedly being done. By 2011 auditors found that Wooten submitted them every month and often for the same amounts — $20,000 and $23,750.

Two-thirds of the money went missing between 2011 and 2014, according to the audit. In 2011, the city laid off its only staff auditor, George Owens, and began to use an outside firm.

Owens said he never audited the utility fund that Wooten oversaw. But he wasn’t surprised that the missing money went undiscovered for so long.

“Every audit I did,” Owens said, “I normally would find something that needed improvement.”

The fund Wooten oversaw had less oversight than others, City Manager Michael Beck said. The city has a budget of more than $650 million divided into more than 130 separate funds. Annual audits, he said, can cover only a sample of transactions. Pasadena is still trying to determine if other funds are as vulnerable, he said.

The missing money was discovered after council members raised questions about the underground utility program in May. Councilman Terry Tornek referred to it during a public meeting as a “slush fund” too complicated for city oversight.

When city officials realized that they could not account for millions of dollars, they alerted the L.A. County district attorney’s office.

In July, Wooten was fired for what Beck called an “unrelated personnel issue” related to his work performance. Four other employees have been put on paid administrative leave in connection with the scandal.

In 2013, city records show, Wooten emailed himself a letter that he wrote to a church leader in which he defended his financial stewardship against complaints from an anonymous accuser. Church leaders said they were unaware of any financial wrongdoing by Wooten.

An account on New Covenant’s website once described Wooten’s fundraising as an example of God’s “hand of favor.” The website has been taken down.

At the church he founded, Wooten has been stripped of his duties.

frank.shyong@latimes.com

marisa.gerber@latimes.com

Twitter: @frankshyong

Twitter: @marisagerber