Irvine asks judge to open firm’s books
The Irvine City Council voted unanimously Wednesday to ask for a court order compelling a powerful consulting firm to open its books as part of a forensic audit of the effort to transform a retired military base into a grand municipal park.
“I don’t care how great someone may be,” Councilwoman Christina Shea said at the special meeting. “They need to follow our laws.”
The move came after a top executive at Forde and Mollrich — a firm accused of wielding undue influence over the planning of the Orange County Great Park — refused to hand over information that auditors said was necessary to gauge whether the $7.2 million in fees paid to the company for its work on the project was properly earned.
The audit is examining how the city spent more than $200 million on plans for the park when there is, critics say, little developed ground to show for the expenditure.
When he was deposed for the audit, Forde and Mollrich partner Stu Mollrich declined to provide detailed information about the firm’s overhead costs and payroll, saying that information was beyond the scope of the probe.
In a memo he sent to the council Tuesday, Mollrich wrote that his firm had “complied fully” with an initial subpoena for documents. He added that disclosing “overhead, salaries and profits of our privately held company will place us at a competitive disadvantage in negotiating contracts with future clients.”
Audit attorneys, however, argued that the records were key to understanding the firm’s specific responsibilities under its $100,000-per-month fixed-fee strategy and public relations contract.
Furthermore, they said, the firm agreed to make internal financial records available when it signed on to work for the city.
When Forde and Mollrich’s attorneys declined written requests for the records earlier this month, the auditors issued an ultimatum: Turn over the documents by 5 p.m. Aug. 18 or get ready to appear before a judge.
The deadline passed without the records changing hands, although audit attorney Anthony Taylor told the council Wednesday that the company offered in the Tuesday memo to go to mediation.
Still, Mollrich hadn’t expressed a willingness to comply with auditors’ requests, said Taylor, who urged the council to move forward with the resolution.
“We’re here in large part because of Forde and Mollrich,” he said. “They are absolutely driving up the cost of the audit.”
In January, the council authorized the use of subpoenas to further the audit.
Over the past several weeks, testimony from a slew of former park officials has been made public. Much of it describes the park’s design process as directionless and beset by cronyism.
Those claims have been strongly rejected by the park’s most ardent champions, including Irvine Councilman Larry Agran, who say the audit is a political witch hunt.
Mollrich too has denied allegations that his firm exercised any more authority than was appropriate over the project.
While Agran on Wednesday pointed out that taking action against Forde and Mollrich in court could result in a lengthy legal battle that would suck up even more city money, he supported enlisting the help of a judge.
“We have reached the point that [the dispute] does need some adult supervision,” he said.
The city will request to have the issue heard in court before Aug. 25 and will ask Mollrich to submit to a second deposition.