By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
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Rejecting calls for an inspector general to help as the city’s watchdog, City Controller Laura Chick said Los Angeles does not need more people to identify problems — just strong leadership. As fired investigator and would-be whistleblower Dan Carvin has found out, Chick means what she says.
Carvin was hired by the Controller’s Office in March 2002 as a special investigator to “examine irregularity, fraud and impropriety on the part of city employees and contract personnel.” His hiring appeared to mark a new direction by Chick, whose office is staffed primarily with auditors, who generally are not trained to develop cases for prosecution. With 35 years under his belt as a federal and local investigator, Carvin came highly recommended, and arrived with an eye toward examining alleged bill padding by private law firms hired by the city. But when he asked about the performance of the lawyers hired by the City Attorney’s Office to handle a major public-works lawsuit, he was fired within a matter of weeks.
Last Friday, Carvin was in Superior Court on the wrongful-discharge lawsuit he has filed against the city. His case raises questions about Chick’s willingness to go after attorney overbilling and whether she can be independent enough to question City Attorney Rocky Delgadillo about his office’s oversight of private law firms and campaign contributors. These are questions that voters might consider next year during Chick’s re-election bid as Los Angeles’ chief financial overseer. The city claims Carvin acted without Chick’s authorization by trying to initiate an investigation of the City Attorney’s Office. In his lawsuit, Carvin claims the City Attorney’s Office went backdoor to Chick and had him sacked.
“I just wanted to bring to Chick’s attention the possibility of outside counsel billing the city for work that was not needed,” Carvin said after the hearing on Friday. “But she is concerned with her political future in avoiding any inquiry into the City Attorney’s Office. An inspector general would uncover even more problems than a taxpayer could imagine. That would reflect on her role as an overseer.”
Chick and Delgadillo bonded early in their elected terms. Carvin’s boss, former director of auditing James Armstrong, who was out of town when the ax fell on Carvin, says Chick showed trepidation after hiring him. The controller should be able to “go anywhere anytime and look for anything,” Armstrong says, but Chick has an inherent conflict where the City Attorney’s Office is concerned, because that’s where she gets her legal advice. “She should be independent of everyone,” he says. “I’ve always questioned whether the City Attorney’s Office had adequate oversight of outside firms.” Through a spokesman, Chick said Carvin’s case lacks merit and declined further comment.
Carvin’s case revolves around a meeting he had on May 8, 2002, with Assistant City Attorneys Christine McCall, Robert Cramer and Michael Claessens. The city claims that Carvin showed poor judgment and overstepped his authority in raising issues of attorney bill padding. (Meanwhile, private attorneys have billed the city a quarter-million dollars in the Carvin case.) According to his declarations filed with the court, Carvin just wanted to know why attorney Michael Simon, of Brown, Winfield & Canzoneri, had not reviewed sensitive documents in a false-claims case after spending a year gaining access to them. The city would not say how much Simon billed. Simon did not return calls for comment.
For two hours on Friday, without having read all the evidence, Judge Robert Hess made no bones about looking for a reason to toss the case — a potential quagmire that questions McCall’s conduct in overseeing city litigation and threatens to put Chick on the witness stand. Attorneys for the city have offered to settle the case on the condition that depositions of McCall and Chick be sealed. A series of e-mails by McCall demonstrates a cozy relationship with Chick’s office. (Through her attorney, Alan Ghaleb, McCall declined to comment.)
Before coming to the Controller’s Office, Carvin had an unblemished 35-year career as an investigator for the IRS, the U.S. Department of Health and Human Services’ Office of Inspector General, and the MTA’s Inspector General. One case at the MTA showed potential for the city, he thought. While at the MTA, Carvin had reviewed documents related to a massive false-claims lawsuit filed by the county against Parsons-Dillingham, a construction firm that helped build the Red Line. The city also had sued one of Dillingham’s joint ventures, Dillingham–Ray Wilson, for false claims related to a separate public-works project, the Hyperion Wastewater Treatment Plant. Carvin knew that, on behalf of the city, Simon had fought for access to documents from the MTA case that pointed to fraud by Dillingham, but had never reviewed them. MTA’s accounting experts estimated that the documents could allow the city to recover $2 million in its case against Dillingham. Carvin wanted to know why Simon did not review them.
As Carvin’s supervisor, Armstrong says he expected Carvin to offer his assistance to the City Attorney’s Office, hoping that McCall and her colleagues would be interested in his services. In declarations filed with the court, Armstrong states that Carvin had no authority to conduct or initiate a formal investigation of the City Attorney’s Office or its outside counsel. But he also understood how resistance would have elevated Carvin’s curiosity, Armstrong says. “I’d expect him to push further.”