After receiving the final report in the Orange County Great Park audit, the Irvine City Council voted Tuesday to consider legal action regarding findings of the “appearance of impropriety.”
The report recommended further investigation of billing and reimbursement claims that may include breach of contract, false claims and professional malpractice by contractors working on the park between 2005 and 2012.
The motion that the council approved on a 3-1 vote also seeks to compel former Mayor Larry Agran to answer questions about political campaign volunteers that he declined to address in his March 13 audit deposition. The city will consider an attempt to recover legal costs associated with a subpoenaed deposition session that Agran did not show up for on Feb. 25.
Agran served as chairman of the Great Park Corp. from 2005 to 2010.
During Tuesday’s council meeting — Mayor Pro Tem Jeffrey Lalloway was absent — the audit was presented by special counsel David Aleshire and Anthony Taylor of the legal firm Aleshire & Wynder along with Christopher Money of the Newport Beach accounting firm Hagen, Streiff, Newton & Oshiro. Aleshire suggested that a memo on appearances of impropriety be considered in a special closed council session, as is typical in city legal matters.
Councilwoman Beth Krom, who cast the dissenting vote, passionately stated her objections during the council discussion, beginning with an admission in the accounting firm’s report that defined the work as a “performance review” that does not formally constitute an audit in compliance with the American Institute of Certified Public Accountants.
“Now we’re redefining ‘audit,’” Krom said.
Stu Mollrich, a principal in the Newport Beach public relations firm Forde & Mollrich, a central figure in the Great Park examination, called the admission “truly shocking” and said “it is not surprising the final report contains misleading allegations unsubstantiated by fact.”
Among the report’s examples of possible impropriety is remodeling work that Mollrich had done on his Laguna Beach home by construction manager Gafcon in 2008 when both were subcontractors of the Great Park Design Studio.
Gafcon responded with a statement: “The release of these latest Irvine reports does not dispel the countless lies and errors published within the pages of previous reports. We continue to rely on a bipartisan coalition in the state Legislature that has filed a request with the Legislature’s Joint Legislative Audit Committee to investigate the conduct of the city of Irvine through this audit process.”
Councilwoman Christina Shea pointed out that the report shows about $170 million was spent on “soft costs,” including design components and reimbursements to subcontractors for travel, meals, supplies and even the city business tax, while less than $70 million went into actual construction.
“That’s ridiculous. It should be the opposite,” Shea said.
“We have a lot of questions,” Mayor Steven Choi said. “We were just a bottomless resource for people to claim, and they got the money. Where did the money go? Was it properly spent? That’s what we’re trying to figure out.”