Mayor’s staff was told of housing official’s payout

Contradicting earlier claims by an aide to Mayor Antonio Villaraigosa, the board president of Los Angeles’ embattled Housing Authority said Thursday that the mayor’s office was told in advance about the proposed terms of a deal to pay a fired agency executive nearly $1.2 million.

Deputy Mayor Sarah Sheahan said earlier this week that neither the mayor nor his staff were warned that the housing authority’s board -- made up of Villaraigosa appointees -- planned to give the seven-figure payout to Rudolf Montiel, who was ousted as executive director in March.

Villaraigosa only learned about the payment, which has drawn sharp criticism from housing advocates and city elected officials, last week after The Times made inquiries, Sheahan said at the time. But Sheahan acknowledged Thursday that she had been misinformed. “Staff did know the terms of the settlement,” she said.

On Thursday, the housing board’s new president, Mitch Kamin, offered his own statement, saying “the mayor’s staff was advised of the proposed terms.”

“The mayor, when he appointed me to this position, asked me to move this agency forward and oversee a turnaround,” Kamin said. “The settlement was part of that, and the mayor’s staff was advised before the settlement was finalized. And I know we have his full support for the settlement decision.”

Hours after Kamin made his comments, Villaraigosa announced that he had asked Ken Simmons, the executive who has been running the Housing Authority on a temporary basis, to resign. In a letter to Simmons, the mayor cited an ongoing controversy over expensive restaurant and travel spending, which have come under scrutiny from City Controller Wendy Greuel and KCET-TV’s “SoCal Connected” program. Simmons is going back to his former job as the agency’s No. 2 executive.

“Although I know that you are deeply committed to the housing authority’s priorities, it is clear that a decisive break with past policies and practices is necessary,” Villaraigosa wrote.

The announcement brought a turbulent end to a day that began with the statement from Kamin, who has been on the housing board since June. Although he declined to say who on the mayor’s staff had been briefed, his statement was at odds with written comments Sheahan sent The Times on Tuesday.

In an email, Sheahan had said the payout to Montiel was “disheartening” and that “the mayor and his staff were not consulted nor informed about the settlement prior to the board vote.”

Villaraigosa was in Asia on a trade mission Thursday. At one point in the day, Sheahan insisted there was no contradiction between her statement and Kamin’s. “We were not consulted about the settlement. We didn’t know the final dollar figure. We weren’t involved in the final details,” she said.

Later, however, Sheahan’s superior, Deputy Chief of Staff Matt Szabo, was quoted by KCET-TV as saying the mayor was “absolutely aware and authorized the settlement in this matter,” according to the station’s website.

The board voted Nov. 1 to pay Montiel $645,000 to settle his claim that he was fired in retaliation for reporting improper spending practices and other wrongdoing by housing board members. Weeks earlier, the panel agreed to pay Montiel $540,000 in severance, Housing Authority spokesman Eric Brown said.

Former City Controller Laura Chick, who chided elected officials on their handling of the Housing Authority controversy, said she was pleased that Kamin, an attorney and volunteer commissioner, had been advising the mayor’s office. “Mr. Kamin was doing his job...correctly in that,” she said. “The mayor, however, apparently is not.”

The payout to Montiel comes as current and former Housing Authority officials face probing auditors, a criminal investigation and allegations that officials lavishly and improperly spent funds intended for the poor on travel and entertainment.

Last week, KCET’s “SoCal Connected” and City Controller Wendy Greuel released records showing that Housing Authority officials billed the public for limousine rides and meals at swanky Los Angeles hot spots, including Bottega Louie, Rivera and the Palm.

Montiel, 50, was hired in 2004. He initially was credited with reforming the troubled agency. But he got into political trouble last year after the agency moved to evict tenants who had protested at Montiel’s Rancho Cucamonga home.

The evictions were later rescinded. But in March, board members said they had lost confidence in Montiel’s judgment.

Montiel said he was let go because he reported wrongdoing by Housing Authority board members to the district attorney’s office and the federal Department of Housing and Urban Development.

--

david.zahniser@latimes.com

jessica.garrison@latimes.com