29_35x90 knx_35x90

Local

New Head Of LA’s Scandal-Ridden Low-Income Housing Authority Reins In Spending

View Comments
Photo Galleries

LOS ANGELES (CBS) — The newly appointed head of the city’s troubled low-income housing authority said he has halted hundreds of thousands of dollars in bonuses at the agency, ending the use of take-home cars and cutting back on agency credit cards.

Interim CEO Douglas Guthrie announced the actions in a progress report sent to Mayor Antonio Villaraigosa on Wednesday.

“Some of the policies and practices by a previous administration fell outside the bounds of the mission of this organization and are being changed immediately,” Guthrie wrote.

Guthrie was appointed Dec. 13 to take over the Housing Authority of the City of Los Angeles after Villaraigosa asked former interim CEO Ken Simmons to resign his leadership position.

After taking over the agency, Guthrie said he found that more than $527,000 in performance-based bonuses had been given to the department’s senior staff over the last two years. Guthrie told the mayor he froze the bonuses for this year.

Guthrie said he is personally approving all requested travel outside of Los Angeles. He said the travel budget for 2012 was also slashed from $78,000 to $15,000.

He is also revoking the use of 18 vehicles for take-home use by senior staff.

Instead 16 cars will be made part of the agency’s regular motor pool. Two cars will be used only for public safety or facilities management.

The Housing Authority, which oversees about 75,000 affordable housing units and the city’s federally funded Section 8 housing program, has been the subject of a series of scathing media reports alleging employees and board members regularly abused the department’s travel and expense budgets.

An investigation by CBS2 investigative reporter David Goldstein found Housing Authority employees routinely spent thousands of dollars on lunches and dinners at posh restaurants. Some employees were also given personal incentives like clothes, gift cards and electronics.

The Los Angeles Times reported that the Housing Authority’s board recently approved a $540,000 severance package covering 18 months of pay for former CEO Rudolf Montiel, who was fired by the board in March over charges of retaliation.

Montiel was accused of trying to get some residents evicted after they protested outside his home, accusing him of being slow to reform the agency.

The board also approved a $645,000 settlement for Montiel, who alleged his firing was politically motivated retaliation for his disclosure of spending abuses by other board members.

Guthrie told the mayor he had met with City Controller Wendy Greuel about the details of her “top-to-bottom” audit of the agency, which is expected to begin next month.

He said he has also discussed the department’s troubles with officials at the federal Housing and Urban Development, which is reviewing the Housing Authority’s financial records.

» Goldstein: LA Housing Authority Commissioner Under Investigation


(©2011 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
View Comments
blog comments powered by Disqus