Riordan Voices His Support for CRA Chief

Two days before a City Council hearing on alleged financial improprieties in the Los Angeles redevelopment agency, Mayor Richard Riordan said Wednesday he fully supports agency administrator Jerry Scharlin’s handling of the controversy, including the hiring of a private detective firm.

At the same time, Scharlin sent a lengthy memo to the Community Redevelopment Agency staff on Wednesday, offering reassurance that private investigators did not violate any employees’ civil liberties.

Riordan said Scharlin acted “reasonably” when confronted with serious charges of financial misconduct.

“I think Jerry has done an incredible job,” Riordan said in an interview he sought with The Times. “He came into a very sick, cancerous agency and has gone a long way toward putting it in order.”

The actions by Riordan and Scharlin on Wednesday were seen by some at City Hall as an effort to quell criticism by council members and redevelopment employees of Scharlin’s management of the agency as interim administrator.

“It is an attempt to blunt the questions coming from the City Council,” said David Cochran, an official with the union representing CRA employees. “The memo raises more questions than it answers.”

The council has scheduled a hearing Friday for Scharlin to explain his decision to hire the private investigative firm Discreet Intervention Inc. to probe allegations of financial wrongdoing.

Some council members have voiced concerns that Scharlin hired the private investigator without approval of the CRA board, and that the firm might have infringed on the rights of agency employees.

The investigator’s findings were turned over by Scharlin to the city controller’s office, which launched its own audit that found the redevelopment agency paid $1.57 million more for seven properties than city appraisals said they were worth. The audit also concluded that employees circumvented normal appraisal procedures, and that the agency failed to require competitive bidding on contracts.

At the same meeting, the council is scheduled to consider the reappointments of CRA board President Peggy Moore and board member Armando Vergera Sr., who are likely to face questions about their knowledge of agency problems.

The controversy comes at a bad time for Scharlin, who is in contention with others for permanent appointment as agency administrator.

Although he was not notified when Scharlin decided to hire a private investigator, Riordan said the administrator took the right action, after consulting with the city attorney’s office.

“With the whistle-blowers and the advice of the city attorney, in that context I think he acted very responsibly,” Riordan said. “I don’t want to come out and have it, in a vacuum, saying that I approve of hiring private investigators. I approve of the actions he took.”

Riordan said he was concerned by the findings of the audit and the private investigator and supports City Controller Rick Tuttle’s decision to ask the district attorney to investigate.

“It certainly is conduct that is so questionable that I think we have to get the advice of the district attorney as to whether it is criminal or not,” the mayor said. “I’m not an expert on that.”

Riordan said he has not seen the private investigator’s report, which Scharlin has refused to make public, but the mayor said he was briefed on its contents.

In a three-page memo to CRA employees Wednesday, Scharlin said he was confronted with whistle-blowers “from many levels of the organization” and that he hired the private investigator on the advice of the city attorney’s office.

The work of Discreet Intervention “was composed primarily of interviews with whistle-blowers,” he wrote, adding, “at no time was any employee of the agency under surveillance” by the private firm.

Addressing concerns by employees that the investigation firm turned in vouchers for film developing, Scharlin said photographs taken were of “various CRA project sites and did not include people.”