FEMA Funds Controversy at CSUN Is Growing

In a growing controversy over the possible misuse of federal funds, a West Los Angeles business owner said Friday she hired Cal State Northridge laborers to move office furnishings last fall but does not have a record of paying them because she never received an invoice.

The Federal Emergency Management Agency is investigating allegations the CSUN employees were paid for the work from disaster relief funds earmarked for campus earthquake repairs. The workers were referred to the job at Office Future Systems (OFS), said the firm’s owner, by CSUN President Blenda J. Wilson’s husband, Louis Fair Jr., the company’s executive vice president.

Wilson, who is traveling with her husband in Africa, called for an internal investigation Wednesday into her husband’s dealings, as well as into allegations that some CSUN workers were paid with FEMA funds for overtime they did not work.

FEMA officials this week requested documents related to the office move, and have interviewed campus workers. The university is reviewing payroll records for the past two years.

CSUN Provost Louanne Kennedy spoke to Wilson on Thursday but said the matter could not be immediately resolved by telephone.

“I wish it were that simple,” Kennedy said. “It’s not a yes or no answer.”

Wilson returns to Los Angeles on Monday.

Beverly Hawkins, owner of OFS, called the controversy a “tempest in a teapot.” Wilson’s husband, Hawkins said, is an employee who owns no stock in the company, which specializes in reorganizing financially troubled businesses.

“Dr. Fair’s being married to Blenda Wilson had nothing to do with the move,” she said. “I took bids from several groups. He wouldn’t have stood to benefit because it is not his company.”

Fair, who has a PhD in education from Northern Illinois University, was director of City Airport in Detroit. He moved to Los Angeles after his wife became president of Cal State Northridge in 1992. Hawkins said he has worked at OFS for about two years.

OFS has been accused of not paying its workers or its rent on time, according to court records and several former employees.

At least four complaints have been filed against OFS through the Labor Commissioner’s office, said Tom Grogan, assistant chief for the labor commissioner. One former employee, who has a pending complaint about not being paid, took a job at OFS after a friend who works in Wilson’s office recommended her to Fair.

The company’s former landlord, SM Brell, filed several court actions seeking thousands of dollars in rent from OFS in 1996 and 1997, court records show.

FEMA began looking into CSUN’s alleged mismanagement of federal disaster relief money after a former campus employee called the agency’s fraud hotline two weeks ago. Desmond Cerceo, 31, said he called FEMA after complaints he made earlier this year alleging wrongdoing were ignored by campus police.

Cerceo was laid off in March when his crew was cut in half. Following trouble with a supervisor, a restraining order was issued by Los Angeles Superior Court in May forbidding Cerceo from being within 50 yards of his former boss and co-workers until May 2001.

Cerceo said he told FEMA investigators that members of his relocation crew--formed after the 1994 Northridge earthquake--were paid by crew supervisor Terri Sigrist for work they did not perform. He estimated he had received about $1,000 for work he never did. Cerceo said he was not part of the crew who moved Fair’s office furnishings but told FEMA, based on co-workers talk, about the job.

Sigrist said she remembers speaking to Fair by telephone about hiring workers for a private job but did not know at the time he was Wilson’s husband. She said she mentioned the off-duty job to her crew--a common practice--but she did not know whether they did the work or how they were paid. She said, however, they were not paid by CSUN, or with FEMA money.

CSUN previously had been under investigation for its use of FEMA and state funds set aside for earthquake repairs. Two married administrators left the university in 1996 after being censured by Wilson for accepting home repair work from a quake repair contractor they were supervising. An investigation by the state’s Fair Political Practices Commission found no grounds for criminal prosecution.

More than $240 million in FEMA and state money has been spent on earthquake repair, according to the university. About $136 million in repairs remain.

Times correspondent Jake Finch contributed to this story.