Garcetti, Greuel drop the gloves and start punching

Weeks of genteel discourse between two leading contenders for mayor of Los Angeles dissolved Thursday as City Councilman Eric Garcetti accused Controller Wendy Greuel of using “fake projections” and “flim-flam” to inflate how much her audits could benefit the city treasury. Greuel shot back that Garcetti was “clowning around with the numbers” while he “turned a blind eye to waste, fraud and abuse” at City Hall.

The attacks came days before mail-in voting begins in the March 5 primary election, as both candidates continued to focus more on their past records in city government than how they would make the tough decisions the next mayor is likely to face on employee pay, pensions and health benefits.

Both Greuel and Garcetti have put off discussion about their spending choices to close a projected $216-million budget deficit, arguing they can bolster the city treasury through economic development.

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Thursday’s unusually sharp exchange between the former City Council colleagues came after The Times examined Greuel’s claim that her office’s audits uncovered $160 million in “waste, fraud and abuse,” and her suggestion that amount could be available to stabilize city finances and restore services.

“It’s now abundantly clear that the figure of $160 million of so-called fraud, waste and abuse that is the centerpiece of Controller Greuel’s record and her campaign for mayor simply doesn’t exist,” Garcetti said at a news conference at his Studio City campaign headquarters.

Greuel reiterated her confidence in her office’s audit findings and hit back at Garcetti.

“Councilman Garcetti doesn’t want to hear the truth,” Greuel said in a statement, “but the fact is that I have identified $160 million in wasteful spending, fraudulent activity and abuse of city resources, and that’s just the tip of the iceberg. I stand by the diligent and professional work of the civil servants who have conducted these audits at my direction.”

The Times reported Wednesday that most of the $160-million total cited by Greuel relied on two audits, one criticizing what amounted to an accounting maneuver and the other linked to a large projection for new revenue that the controller’s office itself said was unrealistic from the start.

In one audit, Greuel suggested shifting $24.7 million from City Council members’ discretionary accounts to the city’s general fund. That 2010 review did not identify missing or uncollected funds. Greuel said the money — used for various city programs and, sometimes, for council staff salaries — would be put to better use in the general fund.

The other audit claimed to have uncovered about $80 million in unrealized funds for the city treasury. That money was supposed to come via a contract with CBS Decaux, a company that builds street bus shelters, public restrooms, kiosks and other structures and sells advertising on them.

The deal has delivered less revenue than expected, largely because City Council members have delayed the installation of some of the structures. Though Greuel now criticizes the contract, she helped create the bottleneck during her time on the City Council. A 2005 report showed that 11 other council members approved the structures more quickly than Greuel did.

“So the same problem she cited, she was part of the problem,” Garcetti said Thursday.

Two former city controllers, Rick Tuttle and Laura Chick, came to Greuel’s defense. Chick said attacks on audits by the controller are standard procedure at City Hall.

“People always want to kill the messenger or play around with the numbers, rather than just solving the problems,” Chick said. “Wendy has performed her work with honor and integrity — something we desperately need in City Hall.”

james.rainey@latimes.com