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

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

By Simone Wilson Fri., Dec. 9 2011 at 2:15 PM

"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.

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]

Tags:

HACLA, Ken Simmons, L.A. Housing Authority, Los Angeles Times, Mayor Antonio Villaraigosa, Rudy Montiel

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Deborah Hyatt DeStefano

I live in one of these buildings. The monkey business continues. LOMOD, a PRIVATE investment company purchased my HACLA bldg right after we became Sec. 8 under Montiel. Magically got non-profit status and then a subsidiary of HACLA... so now it's a public entity. Even with Montiel gone, the plan is proceeding. Being a tenant, is frightening when there is this kind of ongoing corruption. We all just received papers from LOMOD (not HACLA) that a public entity (LOMOD) has acquired the bldg (even though it already has owned this bldg for several years), that we are not becoming a 'project' of LOMOD... public entity (NOT!)... The disabled and elderly tenants here do not know our fate. We were hand delivered, tonight, after working hours, just before the weekend so that we would have no place to ask our questions and relieve our anxieties about 'the project' as it may be something other than housing. LOMOD is ALL about profits. Just because it got a title of being part of HACLA (city housing), doesn't change a thing. It invested in this and countless other properties, pays no taxes, and is not about to do something drastic right here where over 200 people live. Just because Montiel was dumped doesn't mean the plan was interrupted in the least. Villaraigosa is a part of this, they used up billions of HUD dollars that were to go to Sec. 8 buildings, nobody saw a court room, faced the music, nada! NOW... we stand to be tossed out. Where to disabled and elderly poor go? This group of criminals certainly do not care. I have been posting about this for a few years wherever the topic is written about online. NOBODY will do anything about it. Now, we are about to be tossed like garbage so LOMOD/HACLA can yet reap larger rewards, tax free, with YOUR (and our) hard earned taxes. I have no family or other support system. Bad things really do happen to good people. This could happen to anyone. I have always felt so lucky to have a nice place to live, but now they seem to have other plans for our apartments. Even though all of this info came from 'LOMOD', we are to contact HACLA for info. You don't have to be too bright to see this corruption. We do not deserve to be put out of our apartments to a billion dollar investment company so they can make bigger tax-free profits. SOMEBODY HELP US!!!

Tloc

It is interesting that the expense records included on the KCET Website include not one charge made my Mr. Montiel that I could find. I am trying to figure out what the charges of his excessive spending were based upon? Not the pay-out to him under the terms of his employment contract or settlement of his claim to have been terminated in retaliation for reporting the Board members' excessive spending, but the claim that he spent excessively.

uncledude

I wonder if this debacle is the result of the mayor working under his 10% capacity or over it?

anonymous

Where are the Feds? Oh, I forgot they are busy putting petty Building & Safety inspectors in jail. Can we get that Chicago Fitzerald guy in LA to put the Mayor & the Council behind bars?