Pasadena residents outraged over $6.4-million embezzlement scandal

Residents confront Pasadena officials over decade-long embezzlement scheme

An angry crowd of residents confronted Pasadena officials at a special meeting Monday, the City Council's first public response to a corruption scandal revealed last week. 

The L.A. County district attorney's office has charged a city employee and two others in an alleged embezzlement scheme that involved more than $6 million in public funds. 

The arrests sent shockwaves through a city that has held itself up as a model of municipal governance. During the heated five-hour meeting, City Council officials said they were considering an array of administrative changes to prevent future fraud.

Danny Wooten, a former management analyst with the city, was arrested last week and pleaded not guilty to charges related to an alleged decade-long embezzlement scheme. Wooten, 51, allegedly generated false invoices from a Pasadena-based company for undergrounding utility work, and the company, in turn, cut checks to Wooten and churches with which he was affiliated. Wooten's friends Tyrone Collins, 55, and Melody Jenkins, 46, were also arrested and entered not guilty pleas last week.

City officials said they plan to hire a dedicated auditor and add levels of approval before disbursing funds, among other departmental changes. Councilman Victor Gordo proposed a task force to study city funds. Councilman Steve Madison asked the mayor to form a City Council special committee to investigate the incident and volunteered to serve on it.

Dale Gronemeier, a local attorney, was unimpressed with the proposed fixes.

"This all sounds like a good job of closing the barn door after the horses are out," Gronemeier said.

One resident called the presentations "mind-numbing," and others said the city has a culture of complacency that new regulations cannot solve.

"Maybe the complaints we bring to City Hall are not always correct, but we don't get investigation or attention," resident Nina Chomsky said.

At the meeting, city officials tried to explain how Wooten's alleged embezzlement went undiscovered for more than a decade.

There are 131 different funds in the city's budget, and only a sampling of them are reviewed in the annual audit, said City Manager Michael Beck. The fund involved in the embezzlement, called the Underground Utility Program, was atypically structured, he said. Wooten both requested and authorized payments, handled checks himself and reviewed expense reports.

Beck said he wasn't aware of any other similarly structured city funds.

Four other employees have been placed on paid administrative leave in connection with Wooten's misconduct, Beck said. Wooten was fired last July over what Beck called an unrelated personnel issue involving his job performance.

After repeated calls for Beck to take responsibility, the city manager admitted that there was "some complacency" at City Hall that needed to be addressed.

"We failed as an organization and as a staff to allow this to happen," Beck said. 

City officials said they would present later this month the findings of an audit that seeks to determine whether other fraud has gone undetected.

The city is also considering filing civil lawsuits against Wooten and the churches allegedly involved in the embezzlement.

Wooten and Collins are still in custody. Jenkins was released on bail Tuesday. 

@frankshyong

Copyright © 2016, Los Angeles Times

UPDATES

8:50 p.m.: This headline has been corrected to show the actual amount of the embezzlement, $6.4 million.

This post was originally published at 8:22 p.m.

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