Westly Wants $15.5 Million in State Grants Repaid

State Controller Steve Westly called Tuesday for the return of $15.5 million that California legislators doled out for “pork barrel” projects in 2000 and 2001, and launched full audits of 20 additional grants to nonprofit groups and local agencies in Los Angeles and elsewhere.

Wrapping up an initial review of more than 300 grants to such entities totaling $102 million, Westly announced that his auditors would review others, including one of $492,500 to help pay for reconstruction of the Breed Street Shul in Boyle Heights, and $242,250 for a Martin Luther King Jr. Museum and Cesar Chavez Center at Crenshaw High School.

“Here’s what we found: problems every step of the way,” Westly said at a news conference. “The budget never spelled out the goals of many of these grants. Some of the groups didn’t even know they were getting grants. Others didn’t know what to do with it.”

In several instances, according to Westly’s 16-page report, legislators’ intentions were unclear, making it virtually impossible to determine whether the money was properly spent. The California Department of Parks and Recreation, which disbursed the money, had no formal policy or procedures to monitor the grants.

Westly initiated the inquiry after revelations last month that a San Francisco nonprofit corporation received $492,500 in state tax money to build a community center that never materialized. The nonprofit’s director subsequently helped raise as much as $200,000 in campaign donations for Secretary of State Kevin Shelley, who arranged the $492,500 grant when he was an assemblyman.

Westly did not reveal the names of all 20 projects he intends to audit. But they include the two in Los Angeles, plus $985,000 for an equestrian area at Mission Trails Regional Park near San Diego and $394,000 for the renovation of the Slavonic Cultural Center in San Francisco.

Representatives of the projects said they were confident they spent the money properly.

“Auditing our records is not at all a problem. It is part of the regular course of doing business,” said architect Robert Chattel, who was involved in the Breed Street Shul restoration in Boyle Heights, a project advocated by Sen. Gil Cedillo (D-Los Angeles). “We’re very proud of the work we’ve done,” Chattel said.

Among the other projects Westly cited was a $1-million grant to build sports fields under the direction of the nonprofit group Concerned Citizens of South-Central Los Angeles. His report said the Legislature gave the group “almost complete discretion on the use of the grant funds.”

After the state sent the $1 million, the state parks department learned that the organization received a $2.1-million federal grant for the same purpose. The parks department initially ordered the group to return the money but later relented, allowing it to keep all but $170,000 for development of the sports fields. Parks officials said they concluded that there was no intent to misuse the money.

There is a temporary clay soccer field at the site, at Main Street and Slauson Avenue, plus swaths of dirt and a sign thanking the city and state for money to complete it. The project is scheduled to be done next year.

“Misappropriations need to be dealt with,” Mark Williams, the group’s youth program director, said in an interview, adding that the $170,000 refund due to the state stems from an honest misunderstanding.

Sen. Kevin Murray (D-Culver City), who secured the grant, called the money well spent, saying, “South-Central Los Angeles is one of the most park-poor parts of the country.”

Shrugging off Westly’s criticism, Murray added: “Legislators put the whole thing together and we expect [the controller] to police it.”

Westly’s auditors, led by Jeffrey Brownfield and John Chen, focused on spending beginning in 1999, at the start of Gov. Gray Davis’ administration, when budget surpluses surged into the billions. By 2002, surpluses had all but vanished, and only one grant for $246,250 won legislative approval -- for a Boys & Girls Club in Napa.

Several other agencies also are looking into pork grants from those years.

In his report, Westly contends that the Legislature appropriates money for a three-year period. If it’s not spent within that time, he maintains, it should be returned. Westly said in his report that $12.2 million allocated in the budget for the 2000-01 fiscal year was not spent within the three-year period, and that $3.3 million allocated in 2001-02 was not spent in time.

And Westly noted that the state has no systematic way of tracking whether such money has been spent.

Other state officials disagree about the time limit. The parks department typically tells recipients that they have five years to spend the money. Some officials said privately Tuesday that if Westly is correct, far more than $15.5 million could be at stake.

The parks department issued a statement saying that it respectfully disagrees with Westly’s assessment of the grants process. Its staff provides “the maximum oversight possible” given the “financial constraints imposed by the Legislature,” the statement said.

“These grants are legislators’ grants,” the statement said. “They are legislatively controlled and they are delivered by legislators, through government agencies, to constituents the Legislature deems worthy.”

Other grants questioned by Westly include one in which parks department officials, trying to comply with directions from the Legislature, contacted San Diego city officials in 2000 to give away money for a Boys & Girls Club, a maritime museum and an aquatic center, only to be told by city officials that San Diego had not requested the money. The city ended up agreeing to take the money and pass it on to the proper programs.

A similar situation occurred in Garden Grove in 2001, when local officials rejected $10,000 for a soccer program, saying the city had not requested it. The city relented 18 months later and agreed to be the conduit between the state and an American Youth Soccer Organization program, buying 700 uniforms.

Westly’s report said that in at least two instances, money apparently was appropriated twice for the same projects -- including $4.2 million for a community gym in Yucaipa, and $123,000 to make a payment on the purchase of land at Briar Summit in Laurel Canyon.