L.A. County wants your corruption and fraud tips as part of contracting investigation

The move is among the first public developments in the county’s long-running investigation and audit into its contracting process that was approved in October 2021 in the wake of the federal indictment of L.A. City Councilmember Mark Ridley-Thomas, who was later suspended.

“Being a responsible steward of taxpayer dollars is one of the fundamental aspects of being a county public servant,” Supervisor Kathryn Barger said in a statement. “We cannot tolerate any actions that disregard that responsibility or damage the public’s trust in local government.”

Prosecutors have accused Ridley-Thomas, who served on the Board of Supervisors from 2008 to 2020, of steering millions of dollars in lucrative contracts to USC while at the county in return for admission, full tuition and a professor post for his son, a former state lawmaker. Ridley-Thomas has pleaded not guilty, and his trial is scheduled for March.

Days after Ridley-Thomas and a former USC dean were indicted, the five-member Board of Supervisors unanimously approved the investigation and review of county contracts. “This county has a duty to provide transparency and accountability,” Supervisor Hilda Solis said at the time.

Little has been shared in the 14 months since. Last week, along with encouraging the public to report suspected corruption, the county announced that the two firms it hired to conduct the probe — Covington & Burling and FTI Consulting — had finished interviewing employees and pulling information on more than 23,000 contracts worth roughly $80 billion.

The outside investigators now plan to review a sampling of the contracts the county entered into during Ridley-Thomas’ tenure on the board, according to a press release issued by the county chief executive’s office. Investigators will identify which contracts warrant deeper scrutiny. Recommendations will ultimately be made to the board.

Asked how the county chose Covington & Burling, Kimberly Ortega, a spokesperson for Solis — who first called for the investigation — said the county’s legal office identified prospective firms experienced in auditing government contracts and conducting complex inquiries, and recommended some to the board.

“It also was important to ensure that the team was diverse, had federal investigative experience, was familiar with local prosecuting authorities, and was independent from the county, county officials, and USC,” Ortega said in a May email. Along with the law firm, the board also chose Washington, D.C.-based FTI Consulting.

Carolyn Kubota, a Covington & Burling partner leading the investigation with another partner, Dan Shallman, previously represented a former USC lawyer in connection with lawsuits brought by victims of university gynecologist George Tyndall. Although Kubota was paid by the university, county officials dismissed the notion that her work amounted to a conflict of interest.

“Ms. Kubota represented an individual, not USC,” Ortega said.

Ortega emphasized that although the supervisors selected the investigators, it was “imperative that Covington conduct its review independently.” The firm was empowered “to make its own determinations and recommendations” for referring any findings to law enforcement or prosecutors “as appropriate,” Ortega said in an email.

Though the investigation is aimed at restoring trust and transparency into the awarding of government contracts, the county has declined to release basic information about its dealings with either firm.

County lawyers refused to release the engagement agreements outlining their work, citing attorney-client privilege. For the same reason, the county also balked at disclosing how much either firm has been paid thus far and the rates of compensation.

Jason Gonzalez, a senior lawyer in the county counsel’s office, told The Times he expects the investigation to wrap up in mid-2023.

The Times asked all five supervisors if they felt the cost of the taxpayer-funded investigation should be shared with the public.

A spokesperson for Barger, the only office to provide a response, said the county designates fee agreements with outside counsel as “privileged,” in part because disclosing the price would make it more difficult for the county to work with other firms.

The spokesperson said Barger had last been briefed on the investigation Nov. 29, but could not disclose details because the investigation was “privileged and confidential.”

Local governments have been rocked by a series of corruption scandals over the last decade, fraying trust and wasting public money. The county’s chief executive, Fesia Davenport, recently noted the cost imposed by Arman Gabaee, a prominent developer who leased property to the county in contracts worth $125 million. Gabaee pleaded guilty to bribing a county real estate official with $1,000-per-month payments to help gain an edge in his bids.

Davenport told a federal court in a Dec. 7 filing that because of Gabaee, the county entered into leases “for above-market prices, resulting in a waste of county funds” and now must pay “tens of millions of dollars” to relocate out of tainted contracts.

“This harm is ongoing,” Davenport said.