Ryu’s Slush Fund Scrutiny

David Ryu

David Ryu

During his campaign, Los Angeles City Councilmember David Ryu promised he would create an advisory board to supervise how his district’s discretionary funding was prioritized and spent.

In October, the nine-member “Discretionary Task Force” began its work, voting two organizations—who had already spent money promised by outgoing councilmember Tom LaBonge and later rescinded by Ryu—should receive the funds. The group also discussed Ryu’s request to use between $80,000 and $150,000 in discretionary funds to increase staff.

The issue of discretionary spending, known colloquially as “slush funds,” became a hot topic in the election to replace Tom LaBonge, who was councilmember for District 4 (CD4) for about 15 years.

LaBonge was criticized by some for spending his discretionary funds on events and donations to charity when some said the basic needs of the district—like re-paving broken streets and repairing potholes—were not being met.

Criticism mounted after the Ledger revealed last spring he had used over $1.6 million in discretionary funds from 2006 to 2015 to increase his payroll.

In the last years of his term, LaBonge had 25 active staff members, more than any other council district in Los Angeles except for that of Council President Herb Wesson.

It is not clear how many staffers Ryu has hired and a call to his office for clarification was not returned on deadline.

“It’s not for padding existing staff members salaries,” said Estevan Montemayor. “There has been a clear understanding we need additional staffing for field deputies to respond to requests from constituents and to provide a high level of service.”

According to the council office, many on Ryu’s staff are at levels below what LaBonge had been paying.

Ryu declined a pay increase for himself and also brought long-time district staffer Renee Weitzer—who previously worked for both councilmembers John Ferraro and LaBonge—back in at a 50% pay cut.

One of the staunchest critics of LaBonge’s discretionary spending habits was Hancock Park Homeowners Assoc. President Cindy Chvatl. But, she said, she is okay with Ryu using discretionary funds to get him up to speed—and to keep him there—in the sprawling district.

“[Ryu’s team] started with nothing,” said Chvatl. “[LaBonge] left them with scorched earth. I think funding for salaries for Ryu is justified. Tom’s decisions for staffing were frivolous . . . and [he did not have] seasoned people in the office.”

Chvatl’s “scorched earth” comment refers to the now widely known fact that LaBonge left no files—no document—behind for Ryu. The two have only spoken briefly a few times since Ryu won his seat and have met in person only once.

The task force is made up of representatives from various community organizations: five are from homeowners’ associations, three are from neighborhood councils and one is from the non-profit advocacy group Friends of Griffith Park. Toluca Lake, the Cahuenga Pass, the Hollywood Hills, Los Feliz, Greater Wilshire and Hancock Park are represented, and Sherman Oaks is represented twice.

Ryu said he is not concerned that every pocket of the district does not have a voice at this table, yet. Terms for the task force will only be for one year, so representatives from other areas will have their turn to chime in on the spending.

So far, the task force’s work is cut out for them. LaBonge promised over $600,000 in discretionary funds to various charities, organizations and projects during his last days in office, a motion that would have left Ryu’s discretionary cupboard bare. Ryu had the funds rescinded on his first day in office so he could take a closer look.

Since then, Ryu’s Chief of Staff, Sarah Dusseault, has described reviewing the details of LaBonge’s final funding requests as being akin to “untangling a necklace.”

Thus far, she said, she has found a couple requests that were improper. In a few cases, she said, LaBonge had promised community groups 100% of the funding for of city permit fees, to get projects started. Currently, the city has an ordinance that allows for only 50% of a permit fee to be funded by a council office.

“He had been told these were done incorrectly and he went ahead and did them anyway,” Dusseault said.

Among those that Dusseault has been able to untangle, were two donations the task force voted on at their first meeting.

The task force voted unanimously October 8th, at Ryu’s suggestion, to reinstate a donation of $25,000 to the Independent Shakespeare Company, which runs in the summer and had already spent or allocated the funds when Ryu rescinded them July 1st.

The task force also approved a $50,000 donation to the Los Angeles County Museum of Art (LACMA) promised by LaBonge, as they were told that money too had already been spent. But Ryu later reversed that decision when some in the community pointed out that LACMA receives millions from the county annually, and that they had not spent the promised funds, as was previously believed.

How and if the other LaBonge grants will be funded remains to be determined, as the task force winds their way through his old requests and new ones come forth.

According to Ryu spokesperson Estevan Montemayor, Ryu’s office was able to secure funding for many of LaBonge’s parting donations by simply asking for the money from other city departments—such as Recreation and Parks or the Bureau of Engineering—including $20,000 for a fence at Griffith Park’s bird sanctuary and $25,000 for sidewalk repairs in Larchmont.

It is unclear why LaBonge would earmark discretionary funds for projects eligible for funding from other city budgets. A request for comment from LaBonge was not returned.

Each of the city’s 15 councilmembers has an estimated $1.2 million a year to spend in discretionary funds from a handful of sources, with unused funds rolling over to the next year.

Unlike mandatory funds, which are designated by the city for specific purposes, discretionary funds are more flexible and can be spent locally within council districts, or shared with other districts, at the councilmember’s discretion.

Ryu’s task force is believed to be the only one of its kind for any city councilmember.

While some councilmembers are advised on decisions regarding slush fund spending, Ryu’s panel is the only body that is public and operates under the Brown Act, which requires public notification of meetings and publication of the minutes from those meetings, as well as details on decisions the panel makes.

“[T]he best way to prevent even the appearance of abuse is to apply a healthy dose of community input and public accountability,” Ryu wrote in his motion.

Although the task force can vote to approve or deny expenditures, they are only an advisory body, and as the elected official, Ryu will have final say over all discretionary funds expenditures, according to Montemayor.

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