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.”
Carvin had dealt with the City Attorney’s Office before, and his presence was unnerving to McCall, who has managed the city’s Dillingham litigation since 1999. She met Carvin in 2000, when he showed an interest in coming to work for the City Attorney’s Office. He was never hired. When McCall learned he had been hired by Chick’s office, she urgently solicited comments from outside counsel and expressed concern that Carvin could be investigating the quality of legal representation. Before Carvin met with McCall on May 8, 2002, she had two letters from outside attorneys, who billed their time to the city, that described him as lacking professional judgment. The meeting did not go well. Assistant City Attorney Claessens took notes as Carvin faced a raft of questions from McCall, who described his interest in outside counsel as “irregular.” Back at the Controller’s Office, Carvin faced accusations of initiating an unauthorized investigation.
Within days of meeting with Carvin, McCall had a file of memos written by her and her colleagues painting Carvin as a “loose cannon.” Chiefly, she was concerned about the timing and basis of his inquiry, with the Dillingham case still pending. She related her concern to Deputy City Controller Patricia Canfield. Within three weeks, Chick had fired Carvin. In the future, “in the event the Controller’s Office were to look into the conduct of any defense or handling of any case by this office,” McCall wrote to her supervisor on May 23, 2002, “Laura would call Rocky.”
Armstrong says with some regret that he was never consulted about the firing decision. Carvin had been diligent and had always shown good judgment, Armstrong says. “If the city’s version was true,” he says, “and I emphasize if, then I would have been pissed off and disappointed. I would have wanted Dan to get out of the City Attorney’s Office if he felt uncomfortable. But I was like, are we talking about the same guy?” Yet Armstrong has deeper misgivings, he says, which he did not fully convey before retiring in 2003. The speed with which McCall and her outside attorneys closed ranks and communicated their displeasure to Chick’s office was startling, he says. “Carvin had information and was following up on it. That should not have been threatening to them,” he says. “Lack of cooperation in these types of situations can be taken as a red flag, but in Dan’s case, he lost his job.”
Dan Carvin was the first and last special investigator in the City Controller’s Office to date. He remains unemployed. Whether Chick properly fired Carvin for acting without authority, as the City Attorney’s Office claims, or whether McCall sandbagged him because she did not like him nosing around, as Carvin claims, it’s hard to imagine Chick hiring another investigator soon — or supporting an inspector general. “I’d gone to some trouble to get a guy like Dan in the office,” Armstrong says. “My hope was that it would add credibility in the eyes of law enforcers and contacts in the field, who think of auditors as accountants. I thought, if they don’t use this guy as an investigator, they will never go back to one.”