Controller to Audit Coliseum Finances - NBC Southern California

Controller to Audit Coliseum Finances

Conflicts of interest, including finance director's car allowance and 17 percent pay increase, among allegations.



    LA City Controller Wendy Greuel says a recent request for a pay raise, amid allegations of conflict of interest, raised a few red flags. (Published Thursday, Sept. 29, 2011)

    Los Angeles Memorial Coliseum will undergo the first audit of its finances in its 88-year history amid allegations of conflict of interest and poor oversight, according to Wendy Greuel, Los Angeles City Controller.

    Controller's Letter to LA Coliseum Commission

    The decision comes at a time that management of the aging and under-utilized landmark has been reeling from a series of disclosures questioning some uses of funds. 

    Greuel said, based on previous disclosures, she was already considering an audit  when her office received a request from an ''office manager'' -- rather than directly from the Coliseum's general manager or its commission -- to grant pay raises to 21 of the department's 32 employees, including a $25,000 pay increase to finance director Ronald Lederkramer.  Greuel's office handles the Coliseum's payroll.

    The commission's interim general manager, John Sandbrook, has acknowledged approving the raises, most of which were described as increases of 5 percent of less.  But Commission President David Israel said he and other panel members were unaware of the compensation hikes.  Israel said it was a phone call from Greuel that brought the payroll changes to his attention, and after investigating, he ordered them cancelled.

    ''This request raises many red flags,'' Greuel said. ''Given the allegations of conflicts of interest, I believe it's critically important to look at the books of the Coliseum Commission... to determine if they're spending their money wisely and effectively, and most importantly if they're transparent in what they're doing.''

    In the past century, the storied stadium has been home to two Olympics, several NFL and university football teams, and briefly even the LA Dodgers.  But since 1995 its only  continuing tenant has been USC football.  Along with the Sports Arena next door, the publicly owned Coliseum is governed by a unique commission of appointees from the City and County of Los Angeles, and also from the state of California.  The Commission meets once a month and sets policy to be carried out by staff.  It is funded by operating revenues.

    Aware of problems, Commissioners said they welcome the audit.

    "Rest assured that the Commissioners share your concern about addressing the fiscal problems left by the past management..." stated a letter to Greuel signed by Commission President David Israel and Vice President Don Knabe.

    In the past year, events director Todd DeStefano and longtime general manager Patrick Lynch both left the Coliseum after issues were raised.  The Los Angeles Times reported that DeStefano had received at least $1.8 million in payments from companies doing business with the Coliseum and/or Sports Arena.   Israel described the Coliseum as a "crime victim" and said the Commission referred matters to the District Attorney's office for investigation.

    More recently, questions were raised about automotive perks allegedly beneftitting Lynch and DeStefano.  The pay raise issue surfaced this past week.

    Lederkramer’s now-rescinded $25,000 pay increase would have buoyed his base salary from about $145,000 to $170,000.

    Lederkramer, who oversaw the stadium's finances throughout a scandal involving allegations of conflict of interest, excessive perks and poor fiscal oversight, allegedly billed the tax-payer owned Coliseum for most of the costs of his personally leased Jaguar, including the full premium for his auto insurance, according to documents obtained by the LA Times.

    Earlier this year, Lynch allegedly transferred ownership of a Cadillac bought by the commission to himself, according to the Times.

    Car allowances paid to Lederkramer and other Coliseum employees will be part of the Controller's audit..

    ''We believe there has to be a top-to-bottom financial audit of the Coliseum's books,'' Greuel said.

    Even before the audit was announced, some commissioners have questioned the Coliseum's management structure and whether it is adequate not only to oversee day-to-day operations, but to chart a course that can re-vitalize the Coliseum and Sports Arena and make them relevant again.

    "The bigger issue is that...we need to keep the Coliseum viable over the next multi-generations," said Rick Caruso, a Commission member.  He believes that will require doing away with the notion of joint management by three different government entities.

    And until management is revamped, Caruso said he expects  "problems will continue to bubble up."