For nearly a year, Mayor Eric Garcetti and City Controller Ron Galperin have been trying to learn the details of how two secretive nonprofit trusts, established to advise Department of Water and Power utility managers on safety and training, have spent $40 million in ratepayer funds. Their argument is simple: The public has a right to know how its money is being spent. But they have been blocked at every turn by the union representing most DWP workers, whose business manager, Brian D'Arcy, has stonewalled and sued to prevent the release of the trusts' financial records. It's been an ugly, unnecessary fight with multiple lawsuits and threats of labor retaliation.
Through it all, the City Council stayed on the sidelines. Privately, some members were frustrated that city and union leaders were spending so much time and money battling over a $4-million annual payment when the DWP has more serious infrastructure and environmental issues to address. The nonprofit trusts were created a decade ago and are run by management of the DWP and the International Brotherhood of Electrical Workers, Local 18, which represents most of the utility's workers.
Then Galperin, who approves all payments from the city treasury, announced last month that he would not sign the annual $4-million check to the nonprofits because of the lack of information over how the money would be spent. His principled refusal, however, came with a serious risk for the City Council, which must approve or overturn the controller's decision. The payment was required as part of a union contract approved last year that included a pension cut for new hires. If the payment was withheld, the city would be in breach of contract and, potentially, lose $456 million in pension and other savings over the four-year deal. And so, Galperin dragged council members into a fight they surely hoped to avoid.
Their response, however, has been to come up with a smart compromise that could both de-escalate the political battle and provide the long-sought and much-needed transparency. Council President Herb Wesson and his colleagues proposed this week putting the $4 million into an escrow account to be released only after the trust leadership complies with a dozen conditions, including providing city auditors unfettered access to all the nonprofits' financial documents going back five years. In exchange, Garcetti would remove two allies he installed on the nonprofits' boards, who were opposed by D'Arcy, and replace them with the DWP general manager and a utility staffer. Finally, the deal would require the controller, city attorney, mayor and the IBEW to drop their lawsuits and unfair labor practice claims.
Garcetti and Galperin have waged a righteous fight for transparency and public accountability. City Council leaders have crafted a sensible proposal that upholds those ideals. Now, D'Arcy and the IBEW should embrace the deal and let the DWP get back to the business of providing water and power.