RIPPING OFF L.A.'S INMATES AUDIT: JAIL-STORE FIRM UNDERPAYING COUNTY.

Byline: TROY ANDERSON

Staff Writer

The corporation that runs the inmate stores at Los Angeles County's jails underpaid the county nearly $650,000 in profits while wining and dining Sheriff's Department employees, auditors said Monday.

Compass Group USA Inc., which does business as Canteen Services, improperly spent $640,213 from 1999 to 2005 that should have instead been spent on inmate services, according to a report by Auditor-Controller Tyler McCauley.

The expenses included travel costs for Compass employees, meals and entertainment, along with $169,465 for "client hospitality," McCauley wrote.

The same audit also questioned why Compass contributed $304,291 to the sheriff's Youth Foundation -- a crime-prevention program designed to reduce recidivism -- and paid $147,233 to the Sheriff's Department for retirement parties, golf tournaments and the Baker-to-Vegas relay, the annual long-distance run in which Sheriff Lee Baca and other law enforcement officials participate.

The audit drew immediate criticism from taxpayer advocates, who questioned whether sheriff's employees are complying with the county's Political Reform Act.

"Somebody in the Sheriff's Department should know better than to receive all these goodies and perks," said Bob Stern, president of the Center for Governmental Studies in Los Angeles.

"It seems like $170,000 is a lot of gifts, a lot of client hospitality."

Melinda Bird, senior counsel at the American Civil Liberties Union, criticized both the Sheriff's Department and its contractor. "The inmates in the jail are quite literally captive consumers," she said. "They have no way other than through Compass to get a pad of paper or a bag of chips.

"Now within that framework, we find it a sad commentary that a vendor would claim that contributions to sheriff's sporting events or free dinners to deputies are necessary expenses."

Officials at the $8.4 billion company, a prominent food-management company that has a facility in Canoga Park, issued a response saying some of the money had been spent for meals and other events with sheriff's officials, but they couldn't say specifically who had been entertained.

"They don't know who was dined," Stern said. "And the question is, was it top sheriff's people?

"My assumption is it probably was top people in the Sheriff's Department, the people who make the decisions. Was the sheriff involved? Were any of his top deputies involved?"

Sheriff's spokesman Steve Whitmore said the department will review the audit and discipline employees, if warranted.

"If there is something being pointed out where we need to review our policies, we will certainly act accordingly," he said.

But McCauley said that without records detailing which sheriff's officials had been entertained, auditors could not determine compliance with the Political Reform Act. That requires county employees to disclose gifts of more than $50 and limits gifts that may be accepted from any one source to $360 a year.

The county's contract with Compass requires the contractor to share a percentage of its profits on the sale of snacks, beverages, personal-care products, over-the-counter medications, stationery, cosmetics and clothing. That money provides some of the revenue for the Inmate Welfare Fund, which is designed to be used only for inmate services.

However, a grand jury report issued in 2000 found that sheriff's officials had used it for "pet projects" and other expenses. At the time, Supervisor Zev Yaroslavsky accused the Sheriff's Department of using it as a "slush fund" and demanded that the money be used for inmates' medical and mental-health needs.

In their response, Compass officials also disagreed with some of the findings, and they noted that the company had not previously charged the county for certain overhead costs. As a result, the company contends it doesn't owe the county anything.

troy.anderson(at)dailynews.com

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