Don’t Blame DWP Management for the Missing $40 Million

LA WATCHDOG--On September 19, 2013, Jack Dolan of our Los Angeles Times exposed the diversion of over $40 million of Ratepayer money to the Joint Safety and Training Institutes, two unaccountable slush funds controlled by campaign funding Union Bo$$ Brian d’Arcy, the business manager for IBEW Local 18.  This domineering union represents over 90% of the employees at the Department of Water and Power.  

On Tuesday, Dolan reported that Union Bo$$ d’Arcy refused to allocate a portion of the $11 million in surplus cash (a so called “rainy day” fund) held by the two nonprofit trusts towards DWP’s annual contribution of $4 million that is required under the collective bargaining agreement.   This is contrary to the April, 2015 recommendation of the City Administrative Officer in his Operational and Performance Evaluation of the Joint Training and Safety Institutes. 

Union Bo$$ d’Arcy has also refused to adjust the salaries paid to the Trusts’ employees even though they “exceed marketplace rates compared to similar State of California Civil Service positions and job roles.” 

This never ending financial scandal reflects poorly on DWP, its management, and its 9,000 employees.  It also complicates the Department’s efforts to increase our water and power rates by 30% over the next five years.  This new revenue is needed to repair its infrastructure and to meet numerous unfunded environmental mandates. 

But do not blame DWP and its management for this cesspool of corruption.  Rather, the fault for this financial and ethical fiasco lands squarely in City Hall as the City Council, both past and present, including former City Council President Garcetti, and Mayors Hahn and Villaraigosa have been unwilling to confront the arrogant and politically powerful Union Bo$$ d’Arcy because of their reliance on IBEW cash campaign contributions.   

The arrangements covering these two nonprofit trusts are part of the collective bargaining agreements.  However, DWP management is not at the “bargaining” table as these contracts are negotiated under the supervision of the Executive Employee Relations Committee consisting of the Mayor, the City Council President, and three other members of the City Council.  These politicians have either a blatant conflict of interest because they have received IBEW campaign contributions or a serious concern that IBEW cash may support a rival candidate if they do not bow to the Bo$$’s demands.  The labor agreements are also subject to the approval by the City Council and the Mayor.  

While the employees represented by the IBEW have enjoyed premium compensation and benefits, there must be a level of embarrassment to be represented by a radioactive business manager who, despite millions in campaign contributions, was the major reason Wendy Greuel lost to Eric Garcetti in the 2013 Mayoral election.  

Union Bo$$ d’Arcy’s management of the Joint Safety and Training Institutes would also suggest the need for a forensic audit of IBEW Local 18’s books and its $9 million a year budget given the very generous salaries for the nonprofits’ administrators, their unsupervised use of credit cards for travel, steak dinners, and auto expenses, and the granting of sweetheart contracts. 

The City’s Administrative Code should also be amended to require greater disclosure of Local 18’s finances, including the filing of complete audited financial statements along with the footnotes within 90 days of the end of the year, the compensation and benefits of its top five employees, and all campaign contributions by candidate and ballot measure for the last ten years. 

The City should also move to break IBEW 18’s monopoly at DWP by prohibiting any one union from representing more than one third of the Department’s employees. 

Finally, in an attempt to keep our elected politicians honest and free from conflicts, the City should limit union campaign contributions to candidates and independent expenditure committees by prohibiting union participation and that of the candidates in any labor negotiations.  

On the other hand, many contrarians view this scandal and the $4 million a year rip off of the Ratepayers as a gift from the gods as it highlights the corruption at City Hall, fueling the citizens’ lack of trust and confidence in our elected officials.  And needless to say, when new taxes are proposed by City Hall, the County, and the State, $4 million a year is a small price to pay for defeating a half cent increase in our sales tax that will cost us $250 million a year.

 

(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council.  Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at:  [email protected]) 
-cw

 

 

CityWatch

Vol 13 Issue 78

Pub: Sep 25, 2015

{module [1177]}