The U.S. attorney has launched a fraud investigation to determine whether Los Angeles city officials ignored federal laws designed to protect the disabled when building or fixing up housing.
City Atty. Carmen Trutanich and the Community Redevelopment Agency received letters last week from the U.S. attorney's civil fraud unit instructing them to preserve records for housing developments that have received federal funds through the city since 1988 — a time frame that covers scores of projects.
The investigation spans January 2001 to the present, the letters said. If violations are uncovered, city agencies that used federal housing funds could face financial penalties, lose out on future grants or possibly become the subject of a criminal investigation, said Bill Carter, Trutanich's senior deputy.
"The federal government is obviously taking this investigation very seriously," he said.
Carter said he does not know what sparked the federal inquiry. But Becky Dennison, co-director of the advocacy group known as the Los Angeles Community Action Network, said disabled rights activists have repeatedly gone to the redevelopment agency to complain that housing built or renovated with agency funds has violated provisions of the Americans With Disabilities Act.
In testimony and in person, activists alleged that doors were sometimes too heavy for wheelchair users to open, elevators were not working in at least one city-funded building, and managers either refused to rent to wheelchair users or did not have apartments available for them, Dennison said.
The redevelopment agency convened a task force to come up with strategies for addressing complaints two years ago, part of a settlement of a lawsuit over the downtown Alexandria Hotel, according to documents. That action alleged that disabled tenants were wrongly evicted and faced discrimination during repairs to the building.
Dennison, whose group was a plaintiff in the lawsuit, said her group made recommendations to the task force that were not accepted by redevelopment officials, including the creation of a database of all wheelchair accessible units that have been funded by the city. The recommendations "never went anywhere," Dennison said, "and it was clear the violations were widespread."
Christine Essel, the top executive at the redevelopment agency, referred questions to the office of Mayor Antonio Villaraigosa, which referred questions to the U.S. attorney's office, which had no comment. Madeline Janis, one of Villaraigosa's redevelopment commissioners, confirmed that her agency had received complaints from as many as 15 disabled rights activists over the last six years.
"I was compelled by their stories and very interested in seeing the agency develop a policy," she said. "I don't have information on whether they were legitimate or not."
Paula Pearlman, executive director of the Disability Rights Legal Center, said activists for the disabled are frequently treated as gadflies by decision makers. She said that, based on interviews and investigations by her group, L.A. officials have not been ensuring that their redevelopment projects comply with federal law.
"People go to rent them and there are no accessible units, or they go to rent them, and the luxury units are accessible but not the low-income housing units," she said.
Carter said city officials are trying to determine whether the federal investigation focuses exclusively on redevelopment projects or takes in other city agencies, such as the Community Development Department and the Housing Department — both of which provide federal funds for housing projects. Either way, the letters from the Department of Justice cap a year of other investigations at City Hall, covering an array of agencies and allegations.
The FBI conducted a sting at the Department of Building and Safety, arresting two employees on suspicion of accepting bribes. Department officials launched their own inquiry and fired two additional employees, one of whom has filed an appeal.
Federal prosecutors are also investigating allegations that Advanced Development and Investment, an affordable housing developer, defrauded the city of tens of millions of dollars by inflating invoices for projects that had received millions of dollars in city subsidies. In June, the City Ethics Commission opened its own investigation into that developer's lobbyist, former Los Angeles City Councilman Richard Alatorre, according to documents obtained by The Times.
Meanwhile, L.A. County Dist. Atty. Steve Cooley is probing allegations that Villaraigosa's appointees on the housing authority board violated conflict-of-interest laws and engaged in "double dipping" — getting reimbursed twice for the same expense.
The letters sent to Trutanich and the redevelopment agency, both dated Nov. 30, said federal prosecutors are trying to determine whether city officials falsely told the federal Housing and Urban Development Department that they were in compliance with federal regulations requiring protections for those with disabilities.
"Obviously, this is troubling, particularly on top of all the other investigations happening in the city today," said City Controller Wendy Greuel. "As someone who served at HUD and knows housing issues, these are laws that need to be followed, plain and simple."