Villaraigosa didn’t know about agency chief’s payout, aide says

Los Angeles Mayor Antonio Villaraigosa was not consulted before his appointees at the Housing Authority quietly gave a nearly $1.2-million payout to a top executive fired several months ago, a mayoral spokeswoman said Tuesday.

Deputy Mayor Sarah Sheahan said the mayor, now on a trade mission to Asia, was unaware of the settlement and severance package provided to Rudolf Montiel until Friday, after The Times began inquiring about it. Villaraigosa appoints the seven members of the authority’s governing board and has a deputy mayor assigned to track the agency’s activities.

The Times reported on the deal Sunday. Sheahan said the mayor was “disheartened” by the payout but was told it was the lowest amount possible given the legal issues and the terms of Montiel’s contract. She said that four new board members have reformed the agency’s spending practices, which have come under scrutiny from City Controller Wendy Greuel and KCET-TV’s “SoCal Connected” program, among others.

The new board has “drastically” reduced the agency’s travel budget, put limits on employee credit cards and stopped other expensive perks, Sheahan said.

“It is our understanding that the irresponsible spending authorized by Mr. Montiel has ended,” she said in a statement.

That remark drew fire from Montiel’s lawyer, Michael Posner, who questioned whether it runs afoul of the settlement deal with his client. The pact bars each side from speaking ill of the other.

Posner said he planned to confer with Montiel on whether to sue the city on the grounds that it violated the terms of the settlement, which was approved after Montiel alleged that he was a victim of wrongful termination, retaliation and libel. Sheahan’s statement “would only lead to the conclusion that they are disparaging his name and reputation,” he said.

The Housing Authority board recently agreed to pay a $540,000 severance to Montiel, covering 18 months of pay and including $18,000 in back interest. Villaraigosa’s appointees also promised to give Montiel a $645,000 settlement next month, after he alleged that he faced retaliation for reporting on improper spending practices and other wrongdoing by housing board members.

Before his firing, Montiel had a compensation package of roughly $450,000, which included a housing allowance and 10 weeks of vacation. When he was terminated, board members said they had lost faith in his judgment after a controversial agency effort to evict tenants who had picketed outside his home.

Also Tuesday, Councilman Dennis Zine called for a closed-door briefing with city lawyers to get an explanation for the deal with Montiel. He called on housing authority officials to appear before the council to explain the agency’s meal and gift expenses, including reports that the agency incurred dozens of meal tabs of $500 or more, some at such pricey spots as Bottega Louie and Fleming’s Prime Steakhouse.

Greuel has called for a wide-ranging audit of the Housing Authority, asserting that the agency’s travel budget alone grew three-fold to $300,000 from 2006 to 2009. By the end of the day, even former City Controller Laura Chick — now a resident of Berkeley — had chimed in, accusing city elected officials, including Villaraigosa, of showing a “lack of indignation” over the revelations.

“Where are the hearings to discuss the organization and oversight of the Housing Authority and how it could and should be reformed?” she asked in an open letter sent to media.

Sheahan had no comment on Chick’s letter. The City Council confirms mayoral nominees to the governing board of the semi-autonomous Housing Authority, which is largely funded by the federal government. But council members do not review decisions on housing authority budgets and contracts, as they do with most other Villaraigosa-appointed boards.

The agency’s spending practices troubled Barbara Schultz, directing attorney for the Legal Aid Foundation of Los Angeles. Amid reports of allegedly extravagant spending, she accused the housing authority of “nickel and diming tenants” by making them pay for maintenance costs in their rental units.

david.zahniser@latimes.com

jessica.garrison@latimes.com