State legislators deny investigation into Great Park audit

A request to investigate the Great Park audit subcommittee in the California State Legislature failed to reach the required balance of committee votes to proceed despite a 9-3 vote in favor by attending members of the Joint Legislative Audit Committee.

In Wednesday’s hearing in Sacramento, all seven state assembly members of the committee voted in favor of the measure with two state senate committee members also approving. Three senators dissented in the roll call vote with one abstention and one senate member absent. By law, a majority of both houses — four votes each — must concur in order to approve a committee proposal.

The item was raised by Assemblywoman Lorena Gonzalez (D-San Diego) at the urging of construction design firm Gafcon, a Great Park subcontractor that is headquartered in her district. She said she would re-submit the audit request before the next JLAC meeting in June and work to better inform some of the senate committee members in the interim.

At issue is the performance of the Great Park audit subcommittee consisting of Irvine City Council members Christina Shea and Jeffrey Lalloway. The audit was approved by the City Council in January of 2013 with an original budget of $240,000 and expected to be completed in four months. The final report was presented in March after more than two years and at a cost in excess of $1.2 million.

A month after the findings were submitted, the audit subcommittee was formally dissolved during the regular Irvine City Council meeting April 14.

Gonzalez presented her argument that the audit process may have been drawn out for election purposes and that Gafcon’s reputation and business suffered significantly as a result.

Gafcon principal Yehudi Gaffen testified that his company “lost millions” and “did not win one job in 2014 because of this so-called audit.”

“A business doesn’t have to risk ruin; the ruin of their reputation, the loss of jobs, the loss of revenue because an out-of-control local government decides to play politics with their future,” Gonzalez stated before the committee. “We believe that’s possibly what happened here.”

Irvine Councilwoman Beth Krom supported the position that it was a politically-motivated process in a letter to the legislative audit committee stating: “An audit that should have taken less than six months was dragged out at great expense to advance a false narrative and secure headlines for the 2014 election. When reprinted in campaign mailers, those headlines lent credibility to the ugliest campaign of smut and smears in Irvine’s history.”

Krom is the lone remaining Democratic member of the Irvine City Council after the November election swept out long-time Councilman Larry Agran and inserted first-term Republican Lynn Schott. Agran, Gafcon and Newport Beach Public Relations firm Forde & Mollrich are all central figures in the Great Park audit report.

Irvine Mayor Steven Choi and Special Counsel Anthony Taylor of the law firm Aleshire & Wynder represented the city at the hearing. Choi expressed surprise the matter was being considered before the state panel heard an explanation of why the audit was undertaken, the process and why it took so long to complete.

“Unfortunately it took a lot more time and a lot more expenditure because of some resistance on the parts of some individuals who were supposed to be deposed,” Choi told the panel. “We had to have special meetings to force them to comply.”

Taylor noted the audit results have led to an investigation by county prosecutors looking into potential criminal liability and the report is being reviewed by the Orange County Grand Jury with conclusions expected in June.

“The JLAC’s roll is already being fulfilled here,” Taylor said. “If the point here is oversight, the oversight is already coming from both the district attorney’s office and the Grand Jury.”

In a press release after the committee vote, Gafcon stated the company was “pleased with the 9-3 vote,” even though it was not enough to approve the request. “We appreciate their thoughtful consideration of this issue and their diligence in ensuring that government agencies are held to the highest standards of service and accountability to the public.”