Greuel ‘Waste and Fraud Savings’ Called Into Question

LA Mayor hopeful claims $160 million in savings, but her own website documents show only $96.7 million.

By Brian Hews and Randy Economy

Wendy Greuel’s mayoral campaign released its first television ad Tuesday to promote the work she’s done as Los Angeles City Controller in which she takes credit for identifying $160 million in waste.

Los Cerritos Community News performed an analysis of the numbers from Greuel’s reports obtained from her website and found the “Audit Division Performance Reports” from 2010, 2011, and 2012 add up to only $96.7 million not the $160 million Greuel is claiming, a $63.3 million discrepancy.

In the reports, Greuel cited $28 million savings in 2010, $27.7 million in 2011, and $40.8 million in 2012.

Further analysis by LCCN shows that if the categories are broken down, the total 2010-2012 cost savings – the “cutting waste” portion of the report-amounted to only $26.2 million, 27% of the $96.7 million total.

The remaining $70.5 million is categorized as potential revenue, potential savings, and impact on revenue with Greuel listing $62 million as “impact on revenue.”

But even a large part of that $62 million is questionable.

$23 million pertains to an advertising contract with CBS/DeCaux for “ad panels on street furniture.”

The 20 year contract, started in 2002, called for a certain number and type of street furniture permits to be approved every year, which did not happen. This caused the loss of $23 million in revenue because CBS had a contingency clause in their contract for this very occurrence.

The report says the two sides are currently at an impasse and that the contract must be renegotiated.

But Greuel credited her report with a $23 million impact on revenue even though there is a renegotiation process in place with CBS having a very strong negotiating position.

Other questionable “potential” savings/revenue in her report and TV ad:

$15 million is cited as “additional citation/impound revenue with a fully deployed program.”

$6.2 million from the Express Environment program “that could be considered overpayment by a different interpretation of contract terms.”

$3.2 million is cited in her report for “worker’s compensation subrogation recovery”. These are hospital fees paid by the city to a worker who was hurt on the job by a third party, not hurt because of the job.  The city or insurance carrier has subrogation interest – a right of recovery against the negligent party. Greuel is essentially estimating what city attorney will recover and placing it as savings to the city.

All tolled, out of the $62 million in “revenue impact”, over $47 million is potential or dependent on programs becoming fully operational according to Greuel’s own reports.