Coliseum Audit Exposes Questionable Practices
Amidst the scandal involving the Los Angeles Memorial Coliseum, City Controller Wendy Greuel released an audit about the Coliseum's financial operations Thursday, revealing that management's lack of control over spending resulted in an inefficient fiscal environment.
"The lax oversight and poor state of the Coliseum's finances are appalling," Greuel said.
"My audit found that the former general manager established an unsuitable 'do as I ask' tone-at-the-top that, combined with a complete absence of policies and procedures, created a dysfunctional and risk-prone culture."
Greuel's investigation also exposed a laundry list of questionable practices by Coliseum officials, including $870,000 in advance payments to companies in South America for events that never happened.
From 2003 to 2009, Coliseum executives attempted to bring multiple different Uruguayan All Star soccer teams to the venue, but none of the events ever happened.
The Coliseum Commission Board never formally approved any of the event contracts nor did the Coliseum receive any of the deposits back.
Between 2007 and 2010, the average rent for the Coliseum's four most prominent raves significantly declined, while the events' gross ticket sales increased significantly. Of these events, Love Fest in 2010 was not charged any rent. Electric Daisy Carnival in 2010 was charged only $20,000 in rent and acquired $12.9 million in ticket sales. Each of these events were waived move in and move out fees.
During this time, prosecutors alleged that rave producers made direct payments to former Assistant General Manager for Events, Todd DeStefano.
The audit also revealed additional impacts of the former leadership:
- 42 instances of over $950,000 worth of un-tracked cash payments made to technical staff;
- The Coliseum did not renew a contract with the State for the use of Exposition Parking Lot 3, leading to $750,000 losses in revenue over the last three years;
- A janitorial and security vendor was paid a total of $4.8 million between January 2008 and June of 2011 with no contract;
- The Coliseum violated California's Alcohol Beverage Control provisions by allowing its liquor licenses to be used by others for private fundraising purposes.
"The Los Angeles Memorial Coliseum Commission needs to implement the audit recommendations immediately to ensure that the Coliseum's unacceptable business practices come to a halt," Greuel said.
But the Coliseum Commission states that they are not the only ones responsible for the financial scandals.
"You and the public can be assured that the errors of the past are, indeed, in the past. We will detail in a separate announcement the specific actions that have already been taken or are in progress to address your more than four dozen recommendations. Your report correctly acknowledges many of these actions have been underway for the past 12 months, and such recognition is appreciated," Coliseum President David Israel and Vice President Done Knabe wrote in a response to Greuel's audit report.