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Controller says he won't make payments owed to Department of Water and Power's nonprofits (updated)

City controller Ron Galperin said Tuesday an audit showed that L.A.'s foreclosure registry program failed to achieve its goal of preventing blight
Ben Bergman/KPCC
Controller Ron Galperin said Wednesday he would not make $4 million in payments owed to two nonprofit trusts jointly operated by the Department of Water and Power and its union.

Los Angeles Controller Ron Galperin said Wednesday he will not sign off on $4 million in payments owed to two nonprofits jointly run by the Department of Water and Power and its powerful union because trustees for the two groups have not made their financial records available for an audit. 

Just hours after that announcement, City Attorney Mike Feuer filed legal papers asking that a receiver take control to oversee the trusts' activities. 

"The action we take today is part of our continuing work to assure ratepayer dollars are spent for the trusts' intended purposes--worker safety and training," Feuer said. 

The announcements are just the latest twists in a nearly year-long fight between City Hall and the International Brotherhood of Electrical Workers, Local 18. At issue are the Joint Training and Joint Safety institutes, which were established more than a decade ago to help DWP employees. The utility provides millions of dollars in funds to the two groups every year as part of a collective bargaining agreement. 

Last year, Mayor Eric Garcetti, who approved the creation of the trusts as a council member, said he was concerned about how the money was being spent. The controller requested to audit the nonprofits, and a judge later ruled that the city did have the right to know how the public dollars were being spent. 

The union's representatives have repeatedly refused to make the records available for an audit. 

In a statement, the controller noted the city charter gives him the power to withhold payments if he considers them "improper." 

"Given the failure of the trusts and the union trustees to provide the information I’ve sought about how DWP ratepayer money has been spent by the trusts, I cannot, in good conscience, authorize payments to the trusts at this time," Galperin said. 

There was no immediate comment from the DWP or IBEW Local 18. 

KPCC reported last year that the twin trusts spend more than $3 million a year on salaries, travel and office expenses, according to tax returns for the groups.