West Hollywood City Manager Paul Arevalo Appears To Be Second Big Spender in City Credit Card Scandal
Updated after the jump: Fran Solomon, the other cardholder, was so not having us at last night's City Council meeting. Also, the candidates' final words!
Update: West Hollywood employees peek from City Hall safety as the scandal is revealed in the parking lot across the street, to a throng of TV camera crews. Patrick Range McDonald reports.
Last Friday, West Hollywood citywatcher Ed Buck dropped a stink bomb on the already nasty City Council election.
After sorting through thousands of receipts from two city credit cards, he revealed the shocking discovery that at least $13,000 in taxpayer dollars (and probably more like $100,000, if he had to guess) was dropped on overpriced meals and swanky gifts for city employees.
One card was most often swiped by Fran Solomon, deputy to Mayor John Heilman. The other card is registered to City Manager Paul Arevalo, and -- after reviewing Buck's pile of sample receipts -- the LA Weekly has discovered that Arevalo is also the one who appears to be making the transactions. The only reason this is not more obvious...
... is that Arevalo was so arrogant as to not even fill out city forms for his purchases.
His lunches and dinners, most at either SoHo House or Cecconi's, are explained away with (largely unreadable) scribbles on the back of his receipts, such as "lunch meeting" or "lunch -- sunset strip," with a few names below them. Ever the egotist, Arevalo usually notes himself only as "Paul," and hardly ever adds the tip to the customer's copy -- so we don't even really know how much he spent.
But "Paul" is the only name consistent to every list of attendees, and therefore must be the one using the card.
A little background: Arevalo was appointed by the WeHo City Council over a decade ago, in the year 2000. He now makes over $300,000 a year -- more than any other governmental leader in Los Angeles County, as far as we can tell. (Update: LA Weekly commenter John Douponce points out that the city manager of Beverly Hills makes more than Arevalo ($438,570 in 2009), as does that of Rosemead ($449,312). So yeah... Things are worse than we thought.) Three of the current councilmembers contributed to the closed-session vote: Jeffrey Prang, Abbe Land and John Heilman. The latter two are up for re-election on tomorrow's ballot.
One of the receipts Buck pulled, a $308.40 lunch at SoHo House, is completely devoid of notes. All we know is that it was paid for on Arevalo's card (i.e., your card) last April 19, and that sides of cauliflower at SoHo go for a whopping $6.
In defense of the scandal, the city's Finance Department gave the following to West Hollywood Patch:
"All credit card purchases are reviewed by staff in the Finance Department to ensure appropriate documentation and that the purpose of the expenditure was for legitimate city business. No public funds have been expended for membership in the Soho House and the Montblanc pens were gifts celebrating major employee milestones."
The statement also said the city of West Hollywood has in place a written expense reimbursement policy adopted by the City Council that complies with the requirements of Government Code Sections (AB 1234). "Any expenditure charged on a city of West Hollywood credit card must be in compliance with the policy and in furtherance of a municipal purpose," the statement said.
The California code they cited only allows for reimbursement of members of a legislative body, which we're pretty sure doesn't apply to city employees like Solomon and Arevalo, but here it is anyway, with Arevalo's violations in bold:
53232.3. (a) If a local agency reimburses members of a legislative body for actual and necessary expenses incurred in the performance of official duties, then a local agency shall provide expense report forms to be filed by the members of the legislative body for reimbursement for actual and necessary expenses incurred on behalf of the local agency in the performance of official duties. Reimbursable expenses shall include, but not be limited to, meals, lodging, and travel.
(b) Expense reports shall document that expenses meet the existing policy, adopted pursuant to Section 53232.2, for expenditure of public resources.
(c) Members of a legislative body shall submit expense reports within a reasonable time after incurring the expense, as determined by the legislative body, and the reports shall be accompanied by the receipts documenting each expense.
(d) Members of a legislative body shall provide brief reports on meetings attended at the expense of the local agency at the next regular meeting of the legislative body.
When Buck asked the City Clerk's office for the receipts' supporting documents, as required by the above code, he was told that was "all they had."
If nowhere else, this is where we find West Hollywood officials' misuse of taxpayer money may actually be illegal, aside from the blatant breach in ethics.
Five non-incumbents in tomorrow's election -- Scott Schmidt, John D'Amico, Steve Martin, Mito Aviles and Lucas John -- are holding a 9:30 a.m. news conference at 8291 Santa Monica Blvd., where they'll "demand that Mayor John Heilman return tens of thousands of taxpayer dollars wasted on high-end meals and luxurious gifts for city hall staff, developers and lobbyists."
Update, March 7 at 11:07 a.m., with reporting by Patrick Range McDonald: At the parking-lot press conference, as West Hollywood employees watched from City Hall just across the street, Buck, Schmidt and four other City Council candidates made the big reveal to local news reporters and at least four TV news outlets. (Mark Gonzaga was the only non-incumbent missing.)
"Instead of spending money on people with AIDS, they're spending money on dinner at Cecconi's," said Schmidt. He later noted that there appears to be a lack of policy on now city staffers spend the taxpayer dime: "If this is not illegal, that's a problem."
ABC, NBC, KTLA and KCAL/CBS ate up the demands -- that Heilman pay back the taxpayers for Solomon's wild spending habits, and that the city be held accountable for its actions. Though City Manager Arevalo wasn't called out by name, Buck did call the pile of receipts "a pattern of blatant abuse by the mayor's deputy and the city manager."
"We know our city is for sale to developers, but we don't have to take them out to lunch," said candidate Steve Martin.
To which Lucas John added: "Two cheeseburgers and a Coke is enough for a city lunch."
"We all agree that this is an outrageous abuse of the taxpayers' understanding how City Hall is run," said John D'Amico. "Our city talks a good talk, but does not walk the walk."
Here's the West Hollywood Finance Department's statement in full:
"The City of West Hollywood has in place a written expense reimbursement policy adopted by the City Council that complies with the requirements of Government Code Sections 53232.2 and 53232.3 ("AB 1234"). Any expenditure charged on a City of West Hollywood credit card must be in compliance with the policy and in furtherance of a municipal purpose. All credit card purchases are reviewed by staff in the Finance Department to ensure appropriate documentation and that the purpose of the expenditure was for legitimate City business. No public funds have been expended for membership in the Soho House and the Mont Blanc pens were gifts celebrating major employee milestones."
Scott SchmidtWeHo candidate Scott Schmidt blew up the city's infamous salmon dinner (and pasted it to foam board) for your viewing pleasure
Update, with reporting by Patrick Range McDonald: West Hollywood Park Auditorium was filled with over 100 WeHo residents and about 15 city staffers last night. After 41 minutes of watching the current council hand out proclamations to activist groups and pose for pictures, it was finally time for public comment.
City Council challengers Steve Martin, Mito Aviles, Scott Schmidt and Lucas John stood up to speak -- rolling out potshots, puns and voter empowerment like it was their job.
Aviles: "In light of current events, it's fair to say that our current city councilors are out to lunch, and this is due to outrageous expenditures under the watch of John Heilman. I want to bring accountability and transparency into the government."
Martin, with a smirk: "We just got a call from President Obama who indicated that he's ready to assist in the transition to a democratic and inclusive government here in West Hollywood. ... Serving the people really doesn't take place at SoHo House or BOA [Steakhouse]."
Schmidt: "Like all of us, I love this city. And when you see someone that you love being abused, being taken advantage of, it really hurts. It offends the sensibilities. And I think that's why people have sensed that there's been an anger throughout this campaign."
(Lucas) John: "A vote for John Heilman is a vote for another four years of frivolous spending, selling out to developers, and losses of iconic establishments like the House of Blues...A vote for Lindsey is another vote for Heilman and developers. A vote for Abbe Land is another false promise to protect middle-class housing."
During the comment period for current West Hollywood City Council members, no one --not Abbe Land, John Heilman, Lindsey Horvath, John Duran, or Jeff Prang -- addressed the credit-card scandal, much less proposed a spending limit.
Instead, Horvath announced that Motley Crue will be headlining a music festival in WeHo. Land told residents they should start using the parking garage at the city's new $64 million library. Heilman talked about WeHo hosting the L.A. Marathon. Arevalo (who made a large chunk of the charges) warned residents that dogs need to be on leashes or else they will receive a citation.
John Duran, though, whose council seat is not up for grabs this time around, did talk about this campaign season, noting that "this has been a difficult year for me as a council member and for various factions of the community." He added, "We have to make room for the disagreement, and the dissension that exists in the community, or we will continue to be at civil war in the future."
When Fran Solomon was approached by the Weekly inside the auditorium, she threw our business card back at us and repeated "I'm busy right now!" We later saw her talking casually to fellow employees -- clearly not busy. (We're taking that as a "no comment.")
This is the updated statement from City Hall:
"The credit card expenditures for 2010 incurred by City employee, Fran Solomon, totaled less than $2,000 for the entire year. According to our records, these expenditures were for official City business meetings with various community stakeholders. Additional expenditures on the credit card were incurred by other staff persons in the furtherance of municipal business and there are no violations of any City policies in the use of the City's official credit card. Additionally, no public funds have been expended for any private club membership and the pens and gift cards were in recognition of employee milestones.
The City of West Hollywood understands and has always taken seriously its fiduciary responsibility in managing public funds. The City has in place a written expense reimbursement policy adopted by the City Council that complies with the requirements of Government Code Sections 53232.2 and 53232.3 ("AB 1234"). Any expenditure charged on a City of West Hollywood credit card must be in compliance with the policy and in furtherance of a municipal purpose. All credit card purchases are reviewed by staff in the Finance Department to ensure appropriate documentation and that the purpose of the expenditure was for legitimate City business."
We cannot verify the $2,000 cap at this time, but it really begs the question: Is that supposed to be cheap, for a single city employee's lunch and dinner meetings for a single year? And why was her guests' food comped at all?
We'd ask Solomon herself, but... she's busy right now.
Originally posted at 7:30 a.m.