Rave promoters at the publicly run L.A. Coliseum and Sports Arena paid decreasing rents as they raked in millions in ticket revenues at their events, an audit released today by L.A. City Controller Wendy Greuel states.
In one case the promoter of 2010's Love Festival paid no rent, and the controversial Electric Daisy Carnival in 2010 paid $20,000 rent and took in nearly $13 million in ticket sales, according to Greuel.
What she called the Coliseum's "lax oversight" also led to ...
... led to nearly $1 million in "untracked cash payments being made to technical staff," Greuel's office states. That's a story that we first broke at the Weekly.
Her audit says that the Coliseum spent $870,000 to schedule five events for the Uraguayan All Star soccer team, events that never happened.
The lax oversight and poor state of the Coliseum's finances are appalling. My audit found that the former General Manager established an unsuitable "do as I ask" tone-at-the-top that, combined with a complete absence of policies and procedures, created a dysfunctional and risk-prone culture.
The Coliseum Commission, a governing body made up of appointed leaders that include powerful politicians, responded:
The Coliseum Commission fully acknowledges that, in the past, insufficient oversight was applied to the former managers of the Coliseum. The Commission accepts its responsibility and embraces its roll in instituting change and preserving the Coliseum for generations to come.
... While the Commission has long been aggressively pursuing those who violated the public trust, some are now laying claim to being the impetus for our efforts. In fact, as we are pleased to note is evident in your report, we have been readily providing information to the District Attorney so justice may follow its due course.
To be fair, the Coliseum hasn't always been forthcoming. It has sat on several California Public Records Act requests for information filed by the Weekly last year, in violation of state law.
The audit comes after the two major rave promoters at the Coliseum and Sports Arena, Pasquale Rotella (EDC) and Reza Gerami (Love Festival), were indicted on allegations of embezzlement after authorities said they were making side payments to Coliseum events manager Todd DeStefano in exchange for smooth approvals and low rents.
[Update at 4:32 p.m.]: L.A. County Supervisor Mark Ridley-Thomas, who also sits on the Coliseum Commission, said the audit only proves what he has argued in the past: The Commission, made up of city, county and state appointees, needs to be disbanded in favor of just one of those governments taking over:
The City Controller's audit captures many of the major financial missteps that have put the Coliseum in its current predicament. Her recommendations for correcting past mismanagement, however, stop short of what is truly required: the Coliseum needs an entirely new governance and management model.