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L.A. Housing Authority Scandal Blows Up: Mayor Villaraigosa Knew About CEO Payout, Despite LA Times Report

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Fri, Dec 9, 2011 at 2:15 PM

click to enlarge "We're blessed to have a [mayor] that cares about Watts," ousted Housing Authority CEO Rudy Montiel once said of Villaraigosa. - HACLA
  • "We're blessed to have a [mayor] that cares about Watts," ousted Housing Authority CEO Rudy Montiel once said of Villaraigosa.
KCET should sweep every journalism awards ceremony for 2011, in our opinion. The station's ball-busting coverage of the L.A. Housing Authority has completely unraveled the culture of Wall Street-esque corruption that former CEO Rudy Montiel created at the city's most mysterious public agency. (An example his team of executives were happy to follow.)

Question: How does a taxpayer-funded service for the poor become a billion-dollar palace -- whose lords and ladies drop hundreds of thousands on swanky feasts, cashmere sweaters and pink stuffed elephants -- without anyone but an indie news outlet noticing?

Answer: It doesn't.

Though City Controller Wendy Greuel has complained about HACLA over the years, her probe never went deep enough, on the excuse that her records requests were going unanswered.

(Hm. When one is City Controller, can one not walk into any damned office one pleases and demand one's desired documents, NOW? That goes for you, too, Steve Cooley. Can't blame HACLA for your own spinelessness. Former controller Laura Chick tends to agree.)

Which brings us to L.A. Mayor Antonio Villaraigosa.

click to enlarge Sarah Sheahan, deputy mayor, said her boss was "disheartened" by the payout. - LINKEDIN
  • LinkedIn
  • Sarah Sheahan, deputy mayor, said her boss was "disheartened" by the payout.
A boo-hoo Los Angeles Times article on Tuesday centered entirely on one Villaraigosa aide's claims that the mayor was just as blindsided as the rest of us by news that Montiel, HACLA's fired CEO, was paid $1.2 million to leave by its Board of Commissioners.

Every citywatcher in his/her right mind called BS immediately. Sure, there are small no-nos that fly under any fearless leader's radar -- but not giant city scandals like this one. KCET had already reported in March, right before Montiel's firing, that the Board of Commissioners was handing out millions to ex-employees suing over "whistle-blowing retaliation."

Indeed, last night, KCET dropped another bomb on the cuddly Times report:

The mayor's deputy chief of staff, Matt Szabo, has contradicted that account.

"The mayor was absolutely aware and authorized the settlement in this matter," Szabo told SoCal Connected. "Although he may not have been briefed on every detail of the settlement, he certainly authorized and encouraged the chairman of the board to move forward with the settlement so that the agency could end an unfortunate chapter and move forward."

BOOM. Times political reporter David Zahniser furiously back-peddled with a followup by 10 p.m., but it'll take a few titillating scoops yet to recover from that one.

Piling onto the debacle is an announcement of resignation from current CEO Ken Simmons, who took over when Montiel was shown the door. So Villaraigosa pens a freaking two-page letter accepting the resignation, and applauding Simmons for it -- when we find out he isn't really planning to leave at all. Instead, Simmons just wants his old $300,000 job back as puppet to the CEO.

Christ. Again, via KCET:

Simmons told housing authority commissioners that he intends to return to his old post as No. 2, the chief operating officer, the same position in which he signed all the checks under the former CEO. His salary in that post was more than $300,000 in 2009. The decision on whether to allow him to remain in that role will rest with the new CEO, once commissioners have hired one.

SoCal Connected has obtained copies of Simmons' e-mail to commissioners (here) and a letter from the mayor to Simmons accepting his resignation (here).

From what we've seen of this Board of Commissioners, three of whom are still left over from the Montiel days, they'll be happy keep Simmons in the family, as requested. This is the same guy who signed off on all the extravagent credit-card use, then acted like he was under hypnosis by Montiel -- like he had no choice but to treat his flack to $2,000 steak dinners.

If the commissioners take him back on as second-in-command, they should all be fired on basis of insanity.

And one more suggestion: Might we boot Deputy Mayor Sarah Sheahan, the aide who feigned Villariagosa's innocence to the Times, out the door with them? Either she hasn't the slightest idea what her boss is up to, or she's content with lying for him. Both seem grounds aplenty for public-servant termination.

[@simone_electra / swilson@laweekly.com / @LAWeeklyNews]

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