Fired MTA Treasurer Wins $837,000 Award

While treasurer of the Metropolitan Transportation Authority, Leslie V. Porter handled billions of dollars in public money. But he couldn’t manage his personal finances.

When Porter defaulted on a mortgage on the Beverly Hills condominium in which MTA had invested a quarter of a million dollars, he was fired.

Now, almost three years later, a Los Angeles Superior Court jury has awarded Porter $837,040 for wrongful termination, including $200,000 for emotional distress.

During the trial, even the MTA’s own psychological expert painted a sympathetic portrait of the Harvard-educated MBA. Indeed, Roberta Falke told the jury she had to buy Porter lunch during a recent psychological examination. “He only had $5,” she said. “Mr. Porter is in a difficult life situation right now.”

Falke said Porter suffered a blow to his ego and was depressed after he was fired. But, she said, he had “significant financial difficulties” before being terminated.

His wife, Lila Porter, sobbed on the witness stand as she told the jury about the devastating impact the firing had on her husband. Despite efforts to find work, Porter has been unemployed since losing the prestigious job at the transit agency.

The couple lost the Beverly Hills condominium, declared bankruptcy and moved into a one-bedroom apartment in Atlanta. Lila Porter said they have since relied on family and friends for support.

Her husband had no immediate comment on the jury’s decision, which was returned late Tuesday afternoon after more than two days of deliberations.

His attorney, Peter M. Appleton, said the jury found that MTA “really had not followed their own procedures” in firing Porter. “His personal financial things had nothing to do with his job performance,” Appleton said.

MTA’s legal counsel, Steven Carnevale, expressed disappointment with the jury’s 9-3 verdict and did not rule out an appeal.

“When you are responsible for hundreds of millions of dollars of public money and you can’t manage your own finances, there ought to be cause for dismissal,” Carnevale said.

Public records show that when Porter was fired in December 1996, the MTA’s treasurer had defaulted not only on a mortgage on the condominium, but also had not paid his property taxes in five years. He also owed the IRS and the state substantial amounts in income taxes, penalties and interest as far back as 1990.

As deputy director of the Los Angeles County Transportation Commission and later treasurer of the MTA, Porter had presided over the issuance of more than $2 billion in bonds to finance construction of the Metro Rail subway and light rail lines.

Many of those bonds were structured with balloon payments, like the mortgage Porter had on the condominium. The MTA invested $250,000 in that property shortly after he was hired. The shared equity deal--with MTA holding the majority interest--was one type of housing assistance given to top MTA executives at the time.

Porter testified that he was unable to refinance the condominium because of the steep slide in real estate values and his bank’s insistence that any new loan have a higher priority than his debt to IRS.

On the witness stand, Porter portrayed the financial problems that lead to his bankruptcy as the result of his losing his $125,000-a-year job.

But under questioning by MTA’s trial attorney, he said he chose to use $40,000 to $50,000 in profits from the sale of his home in Washington, D.C., to pay for his son’s college education rather than using the money to pay his debts, including the loan on his condominium.

Senior Deputy County Counsel Sandra Langston told the jury in closing arguments that the issue was simple. She asked: “Is it inappropriate to terminate a high ranking official who jeopardizes $250,000 in public funds?”

But Appleton suggested that Porter was really fired and ordered to vacate his corner office in MTA’s high-rise headquarters on short notice because he refused to cover up the agency’s worsening financial problems. “I think the jury bought the argument that he was a whistle-blower,” he said.

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Ex-MTA Employee Wins Lawsuit

A Los Angeles Superior Court jury has awarded $837,040 in damages for wrongful termination and emotional distress to Leslie V. Porter, the former treasurer of the Metropolitan Transportation Authority. Porter was fired after he defaulted on a mortgage on a Beverly Hills condominium in which the MTA owned a majority interest. But his personal financial problems began long before he was fired. Porter had failed to pay property taxes and owed substantial state and federal income taxes. After being fired by the MTA, he declared bankruptcy.

Positions Held

* Deputy director, Los Angeles County Transportation Commission: 1990-1993

* Treasurer, MTA: 1993-1996

The Events

* October 1990: Buys Beverly Hills condominium; MTA invests $250,000

* Early 1991: Fails to pay property taxes

* July 1993: State files income tax lien

* July 1995: IRS files income tax liens

* November 1996: Defaults on mortgage

* December 1996: Fired by MTA

* March 1997: Declares bankruptcy

* June 1997: MTA loses $250,000 investment

* November 1997: Files worker’s compensation stress claim

* December 1997: Sues MTA for wrongful termination

* September 1999: Awarded $837,040 by jury for wrongful termination

Researched by JEFFREY L. RABIN / Los Angeles Times