Los Angeles City Controller Ron Galperin announced Friday evening that he will audit an estimated $40 million the Department of Water and Power paid to two nonprofit groups created to improve relations between the utility's managers and its largest employee union.
In his letter to DWP General Manager Ron Nichols, Galperin cited a Friday Los Angeles Times story reporting that the agency claimed to have only scant information on how the public funds had been spent.
"Many questions remain outstanding about the expenditure of these funds," Galperin wrote.
Earlier in the day, Los Angeles Mayor Eric Garcetti also called for a public accounting of the money.
“I think that ratepayers deserve to have transparency -- to know where ratepayer money is going,” Garcetti said.
The nonprofits, the Joint Training Institute and the Joint Safety Institute, are controlled by union leaders and managers of the DWP and have received up to $4 million a year since their creation more than a decade ago.
Nearly all of the money comes from ratepayers, records show. About $1 million a year has gone to salaries for a handful of administrators and more than $360,000 was spent on travel from 2009 to 2011, The Times reported Thursday.
Officials at the nonprofits, the DWP and the employees' union, Local 18 of the International Brotherhood of Electrical Workers, declined to be interviewed about the institutes' activities and spending.
The broad purpose of the organizations, city records show, has been to "identify" safety and training as core values at the department, and to promote "communication, mutual trust and respect" between DWP managers and the union. But ordinances establishing the nonprofits in 2000 and 2002 don't specify how the ratepayer money should be spent.
For years, DWP managers and the city attorney’s office have quietly debated whether to make the institutes' meetings and records public. The DWP has invoked attorney-client privilege to block disclosure of memos written by city lawyers arguing that the nonprofits should be bound by open-government rules that apply to city agencies.
Former U.S. Rep. Mel Levine, who was recently appointed to the DWP's Board of Commissioners by Garcetti, also called for greater transparency.
"Clearly this is public money, it’s ratepayer money, and the public is entitled to know how the money was spent," Levine said.