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Eric Garcetti, Wendy Greuel spar over her audits findings

City Councilman Eric Garcetti accused his chief rival for mayor of Los Angeles, Controller Wendy Greuel, of using “fake projections” and “flim-flam” in suggesting her office had found $160 million in waste, fraud and abuse that could help the city balance its books.

Garcetti’s comments came Thursday morning, following media reports suggesting that Greuel’s oft-touted figure was not all real waste and fraud and could not be used by the next mayor to bolster a city treasury in chronic deficit.

“It’s now abundantly clear that the figure of $160 million of so-called fraud, waste and abuse that is the centerpiece of Controller Greuel’s record and her campaign for mayor simply doesn’t exist,” Garcetti said in a news conference at his Studio City headquarters.

His remarks were the sharpest of his campaign to replace outgoing Mayor Antonio Villaraigosa. The primary election is on March 5.

Greuel reiterated her confidence in her office’s audit findings and hit back at Garcetti.

"Councilman Garcetti doesn't want to hear the truth,” Greuel said in a statement, “but the fact is that I have identified $160 million in wasteful spending, fraudulent activity and abuse of city resources, and that's just the tip of the iceberg.  I stand by the diligent and professional work of the civil servants who have conducted these audits at my direction."

The Times reported Wednesday that most of the $160 million total cited by Greuel relied on two audits, one criticizing what amounted to an accounting maneuver and the other linked to a large projection for new revenue that the controller's office itself said was unrealistic from the start.

In one audit, Greuel suggested shifting about $25 million from City Council members' discretionary accounts to the city’s general fund. That 2010 review did not identify missing or uncollected funds. But Greuel said the money could be put to better use for police, firefighters and other expenses, rather than in the council accounts, where the money has been used for graffiti removal, building pocket parks and, occasionally, to pay the staff of council members.

The other audit claimed to have uncovered about $80 million in unrealized funds for the city treasury. That money was supposed to come via a contract with CBS/Decaux, a company that constructs street bus shelters, public restrooms, kiosks and other structures and sells advertising on them.

The deal has delivered less revenue than expected, largely because City Council members have stopped or delayed the installation of some of the structures. During her 2002 to 2009 tenure on the City Council, Greuel was part of that bottleneck. A 2005 report showed that 11 other council offices approved the structures more quickly than Greuel did in her 2nd Council District.

"So the same problem she cited, she was part of the problem,” Garcetti said at his Thursday news  conference.

He said that in the debate over who should be mayor, “We need real numbers. We need real figures.” He said negotiations he had led as City Council president to help reduce pension costs and to reduce city staff had shown he was willing to make tough decisions.

In her statement, Greuel said it was Garcetti who was “clowning around with the numbers and trying to distract voters.” She said the councilman had “turned a blind eye to waste, fraud and abuse.”

Former city Controller Laura Chick came to Greuel's defense. In a  statement, Chick said attacks on such audits were par for the course.

“People always want to kill the messenger or play around with the numbers -- rather than just solving the problems,” Chick said. “Wendy has performed her work with honor and integrity -- something we desperately need in City Hall."

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 -- James Rainey

Twitter: latimesrainey

 
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