Pressure grows on L.A. DWP to account for funding of two nonprofits

Los Angeles elected officials ramped up pressure Tuesday on the city-owned Department of Water and Power to account for more than $40 million in ratepayer money paid to two nonprofits created to improve relations between agency managers and the largest employees’ union.

City Controller Ron Galperin offered new details on an audit he’s launching, saying it will examine the nonprofits’ travel expenditures, salaries and the “rather significant and un-detailed outlays” listed on the groups’ federal tax forms.

And City Councilmen Felipe Fuentes and Mitch O’Farrell asked the DWP for an accounting of how the groups spend as much as $4 million in public money they receive each year, and a detailed explanation of what the two entities — the Joint Training Institute and the Joint Safety Institute — do.

FULL COVERAGE: DWP finances

Last week, The Times reported that the DWP claimed to have only scant information about how the money has been spent, and would offer no specific examples of what either organization has accomplished in more than a decade.

The broad purpose of the organizations, city records show, has been to “identify” safety and training as core values at the department, and to promote “communication, mutual trust and respect” between DWP managers and the union leaders, who jointly control the trusts’ accounts.

The ordinances establishing the nonprofits in 2000 and 2002, after a grueling round of job cuts at the department, don’t specify how the ratepayer money should be spent.

Officials at the groups, the DWP and the employees’ union, Local 18 of the International Brotherhood of Electrical Workers, have repeatedly declined to be interviewed about the institutes’ activities and spending.

The union’s business manager, Brian D’Arcy, responded Tuesday in a letter to Fuentes, saying the organizations have helped address disparate and inefficient training and safety programs. The institutes have created and implemented a department-wide “safety information and action program” that trained 7,800 employees and a “field ergonomics initiative that has helped more than 3,500 journeymen and women learn to work both smart and safely,” D’Arcy said.

He did not provide details of either program or say how much of the $41.1 million received by the institutes has been spent on them.

The union declined to provide any financial information for the two institutes in response to an Aug. 2 records request from The Times. The DWP provided limited records in response to the same request, showing that about $1 million a year has gone to salaries for a handful of administrators. More than $360,000 was spent on travel from July 2009 to June 2012, according to federal filings by the tax-exempt organizations.

“The mission statement [of the institutes] is really vague,” Galperin said Tuesday. “It should be noted that there are programs internal to the DWP that are about safety and training. So the question is: What purpose do these organizations serve?”

In a 2012 filing with the federal government, the training institute listed $663,481 of spending as simply “other,” Galperin noted.

Fuentes said he introduced the motion because he doesn’t know enough about the groups to judge whether the money has been spent wisely. O’Farrell said, “We’re just not going to accept shadowy nonprofits that are funded by taxpayer dollars, or ratepayer dollars, that no one understands. Those days are over.”

For years, DWP managers and the city attorney’s office have debated whether to make the institutes’ meetings and records public. The city attorney’s office, which represents the DWP, recently cited attorney-client privilege to block disclosure of memos written by city lawyers arguing that the nonprofits should be bound by open-government rules that apply to city agencies.

Mayor Eric Garcetti said via his spokesman, “I’m also calling on my new DWP commission to seek full disclosure of all spending by these two organizations and to explore all legal avenues to account for every ratepayer dollar spent.”

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Times staff writer David Zahniser contributed to this report.