DWP SLUSH FUNDS PROBED CHICK: BILL-PAYING SLOPPY, EXPLANATIONS 'SNEAKY' DESPITE WARNINGS.

Byline: Beth Barrett Staff Writer

Los Angeles Department of Water and Power officials funneled millions of ratepayer dollars through 56 ``slush funds'' for fancy parties, lavish entertainment and other events, City Controller Laura Chick said Friday.

In a letter to DWP General Manager David Wiggs obtained by the Daily News, Chick accused DWP officials of stonewalling her probe by employing ``various delaying tactics'' to repeated inquiries for a clear tally of the expenditures and a justification of how they benefit ratepayers.

``I am appalled with what I'm finding,'' Chick wrote, noting that her office is receiving invoices for events over a year old, and in piecemeal fashion.

In an interview, Chick said after months of inquiry by her office that culminated in the assignment of a special audit team this week, she has concluded by the lack of response that the agency is deliberately operating in a manner designed to obfuscate its finances.

``I think it's done in an intentional way to disallow people from knowing,'' Chick said.

Chick said the emerging picture is of an agency that submits vague budgets as to the funding sources and purposes of the ``slush funds'' - officially called ``trust funds'' by the DWP - splits up billings to avoid thresholds that would trigger commission or council review, delays submitting some invoices to the controller while paying others immediately from the funds, and otherwise obscures how the funds operate.

``It's hard to tell how big the problem is, it's so hard to follow the money,'' Chick said.

But, she said what is emerging are the outlines of a ``sick culture ... that has to change.''

DWP officials did not return repeated calls Friday evening.

Longtime West San Fernando Valley City Councilman Hal Bernson said the DWP has engaged in these practices for many years and any abuse of public money must be corrected.

``They play a lot of games with how they set up funds for various things; that's nothing new,'' Bernson said in an interview. ``It's been going on forever.''

An example of the DWP's informal practices is how the bills for a Feb. 10 Music Center dinner to promote ``green power'' have continued to surface after Chick earlier this month refused to pay a $27,000 invoice for the $180-per-person bash. It was among several hundred thousand dollars in invoices from DWP Chick sent to the council for review.

``They send them in in dribbles, drabs and pieces, and we don't have the full amount yet,'' Chick said. ``We have the cost of some of the tickets, but not all the cost of the tickets. A bunch of entertainers haven't shown up; a party planner hasn't shown up; renting the Dorothy Chandler (Pavilion) hasn't shown up, along with the rental of two pianos.

``What's the total cost? You have to be a detective and then some.''

Chick said she has a months-long paper and e-mail trail imploring DWP accounts and top officials, including Wiggs, to sort out their policies and finances.

Instead of answers, she said, the agency has responded with ``more new invoices,'' but no serious engagement of the problems. She said she is ready to take ``the gloves off.''

Chick said she is also disturbed by the agency's failure to offer an explanation of why some invoices are forwarded quickly for payment, while others - including small businesses' invoices - can be delayed months or more, creating hardships for vendors.

``The DWP has made significant efforts to attract and promote locally based small businesses and minority businesses. It makes no sense to then practically put them out of business by delaying payments to them,'' Chick wrote.

Chick said Wiggs has hamstrung his staff by failing to put forward any overall policy to remedy what she termed a ``piecemeal'' approach.

``It must come from the top and be a clear demonstration of how expenditure of these dollars benefit ratepayers and advance the DWP's mission,'' she added.

Chick said the DWP should be able to itemize how much to spend contributing to nonprofits, community-based organizations, for employee rewards, receptions and other events.

``I can't get a total,'' she said.

DWP's policies also must be updated, she said, calling existing criteria ``a joke'' because they are vague and fail to explain how many kinds of expenditures relate to providing the public utility's customers with clean, reliable and affordable water and power.

``There should be a very straight line connecting the dots as to the bang for the bucks to the ratepayer,'' she said, adding that the utility's bills should be posted on a city Web site.

``There should be transparency, honest and forthrightness,'' Chick said. ``Don't be sneaky.''