Board Backs Redevelopment Settlement

Two former top redevelopment executives should be paid $584,000 to settle claims that they were improperly fired last year, city officials recommended Thursday.

The Los Angeles Community Redevelopment Agency Board of Directors tentatively agreed to the deal despite stating that the two were legally terminated by acting Administrator Jerry Scharlin.

“I don’t think he acted improperly,” board member Keith Richman said of Scharlin. “He took steps as interim administrator that he thought were best for the agency. As a board, we had to balance that against the greater cost of proceeding to litigation.”

Board President Peggy Moore said Diana Webb and Peirre Lorenger were serving as “at-will” employees so Scharlin could remove them without cause.

“We authorized our attorneys to move forward with settlement of the case,” Moore announced after the closed session Thursday.

Several Los Angeles City Council members, who have final authority over any deal, voiced outrage, with some vowing to oppose any payments.

“This is an incredible scandal,” Councilman Joel Wachs said. “It really is an outrageous situation. This city is so used to spending taxpayers’ dollars to buy its way out of messes all the time.”

Councilwoman Laura Chick questioned why the city would pay money if Scharlin acted properly.

Scharlin, who did not return calls Thursday, said at the time of the firings that he needed a “different team” to help him reorganize the financially beleaguered agency.

Webb, who as chief deputy administrator was the agency’s No. 2 manager with an annual salary of $137,000, claimed that she was fired in part because she is African American and also because she exposed misconduct in the agency.

Lorenger, who was the agency’s chief financial officer with an annual salary of $119,000, claimed that he was fired in part because of his age--66--and also because of his role as a whistle-blower.

Encino attorney Thomas Pavone Jr., who represents Webb and Lorenger, charged in a confidential memo to city officials that his clients were fired in part in retaliation after they disclosed “wrongful acts” of agency Deputy Administrator Ann Marie Gallant.

Sources said Gallant was briefly suspended last year over a disputed $840 expense account claim, which had been questioned by Lorenger.

Some $300,000 of the proposed settlement would be CRA funds, with the rest paid by a city insurance policy, officials said.

The buyouts are likely to add heat to the already simmering dispute over whether the council should ratify a two-year contract extension for Scharlin.

“How does it reflect on someone who is not a city employee costing the city money?” Councilman Mark Ridley-Thomas asked. “What does it say about his performance and skills? I believe it has to be considered as part of the decision on extending his contract.”