RELEASE: CA Audit Requested by Sen. De Leòn IDs Areas to Complete Vernon Reform - Senator Calls for Criminal Investigation on Past Consultant Practices

Thursday, June 28, 2012

              LOS ANGELES – In response to a request by Senator Kevin de Leòn (D-Los Angeles), an audit was released today by California State Auditor Elaine Howle on the City of Vernon’s finances The audit is one item in a series of reforms and investigations requested by the Senator last year. An earlier call for a transparent hiring process for a new City Attorney by the Senator and John Van de Kamp is nearly complete. The new City Attorney is expected to work through many of the audit’s findings. In response to the audit, the Senator issued the following statement:

              “The State Auditor’s report clearly identifies that the City of Vernon’s finances are in poor shape. I am grateful the County of Los Angeles was not forced to inherit this mess. While we’ve made significant strides toward reforming Vernon, this audit raises significant questions as to the behavior of past city officials.”

              “In particular, the actions of Mr. Eric Fresch are highly suspicious. Adding to my concern is the fact that the State Auditor made numerous attempts to reach Mr. Fresch but was unsuccessful. In fact, Mr. Fresch left the state for the last several weeks of his employment with Vernon. After these attempts, the State Auditor issued a subpoena and made repeated attempts to serve Mr. Fresch at his home and offices but was unsuccessful. It was Mr. Fresch who was in a key position when major financial decisions were made that are now at the heart of Vernon’s financial troubles.”

              “Furthermore, Mr. Fresch received millions in compensation from the city but never filed any required financial disclosure forms. I am pleased Vernon terminated Mr. Fresch’s contract in May at my insistence but there is more review that must be done.”

              “In light of Mr. Fresch’s evasive behavior, non-reporting, and the lack of clear record-keeping detailing his activities surrounding these major financial dealings, I am going to request that the Los Angeles District Attorney conduct a criminal investigation to determine what truly transpired. There is no analysis that explains why these decisions were beneficial to the city, its residents or its businesses so it leads me to question why they were made in the first place.”

              “Additionally, this audit makes it clear that there is not the appropriate financial leadership in place to guide it through the many challenges that result from years of poor governance.

              “I will be working with John Van de Kamp and his staff to ensure the open positions for City Attorney and Human Resources are filled as quickly as possible, and to put a timeline and plan in place to review and fill other key positions with the appropriate, experienced personnel.”