Opinion: City Council may get pulled into fight over secretive DWP nonprofits

For months now the Los Angeles City Council has been able to sit on the sidelines while Mayor Eric Garcetti, Controller Ron Galperin and City Atty. Mike Feuer have engaged in an increasingly nasty fight with union leaders over revealing how two secretive nonprofits spent $40 million from Department of Water and Power ratepayers.

No more. On Wednesday, Galperin announced that he would not sign the annual $4-million check to the nonprofits due this month. The controller, who approves all payments from the city treasury, said the city charter requires him to withhold payment “if there is a question as to whether it is improper.”

And there are questions about whether the spending has been proper. The Joint Training Institute and the Joint Safety Institute were created and are run by management of the DWP and the International Brotherhood of Electrical Workers Local 18, which represents most of the utility’s workers. Last fall The Times’ Jack Dolan reported that there was scant information on how the nonprofits had spent the $40 million, prompting Garcetti and Galperin to call for an accounting.

IBEW Local 18 Business Manager Brian D’Arcy has refused to turn over the nonprofits’ financial documents for an audit. He’s also threatened to sue DWP managers if they release the information, and is suing to block subpoenas of the records.

With no information and no audit, Galperin said he could not “in good conscience” authorize the payments.

His refusal isn’t the final decision, though. The charter says the controller must file a report stating his objections and the City Council “shall promptly consider the report and may overrule or sustain the objections of the controller.”

So Galperin has pulled the City Council into a political fight its members surely hoped to avoid.

Do they side with Galperin, who was elected last year after running on a good government/fiscal responsibility platform and easily beat a well-financed, longtime member of the City Council?

Or do they listen to D’Arcy, a powerful figure around City Hall and in labor politics, who heads a well-financed political action committee that has poured money into city elections? (IBEW’s spending can backfire; last year the PAC raised $4 million for Garcetti’s opponent, Wendy Greuel, who was ultimately hurt by her association with the union.) D’Arcy and L.A. County Federation of Labor chief Maria Elena Durazo have argued that the city is breaking its contract with the union. They’ve demanded the city make the annual payment to the nonprofits.

Feuer and Garcetti may ultimately save the City Council from having to enter the fray. Feuer on Wednesday sued D’Arcy and other union trustees overseeing the nonprofits and called for the court to appoint a receiver to take control of them. If a receiver were in place, the City Council — and presumably Galperin — could authorize the annual $4-million payment with little fear that the money would be misspent. This would avoid a possible breach of contract with the union — and maybe even lead to the release of financial records showing how public money has been spent.

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