Coliseum officials paid union $ 1 million in cash
For at least five years, officials at the Los Angeles Memorial Coliseum handed over wads of cash totaling more than $ 1 million to a union representative, sometimes in a suitcase full of $ 100 bills.
The payments, ranging from $ 1,400 to $ 187,700 each, were to cover stage salaries at Coliseum events – rave concerts, Cinco de Mayo performances and the Lakers’ championship celebration – according to records and interviews.
Publicly owned Coliseum invoice reports obtained by The Times under the California Public Records Act show that the International Alliance of Theater Employees received the cash advances from March 2006 through February this year. But the Colosseum imposed no checks on whether the money ended up in the right pockets, and the commissioners who govern the property say they may have been swindled.
Now, U.S. Department of Labor criminal investigators are reviewing the payments, according to people familiar with the matter.
In the absence of a detailed account of what happened to the money after it left the stadium, the Coliseum Commission does not know how much actually went to salaries and whether the required contributions were made to benefit plans. employee benefits. In addition, the stadium could have to pay hundreds of thousands of dollars in payroll deductions and payroll deductions.
It’s as if the Colosseum is being run “like an underground business,” said Jessica Levinson, a professor at Loyola Law School who studies government corruption. “This idea of money in the suitcases reads like a bad detective story.”
The legendary stadium has been in the throes of controversy for about a year, since The Times began reporting financial irregularities involving its top executives, most of whom have left.
Two of the executives founded parallel companies which received money from companies doing business with the Colosseum, records show and interviews. And according to the bills and expense reports, the Colosseum has spent tens of thousands of dollars on luxury cars, unlimited gas purchases, massages, snoring treatments, golf outings and steakhouse meals, all billed to the public. .
An investigation by the public prosecutor is underway. Former managers have denied any wrongdoing.
The Department of Labor investigation adds a federal dimension to the Colosseum unrest. Most of the cash payments to Local 33 of the union were for raves at the Coliseum and associated sports arena and bookings for Latin American music and dance productions.
The advance of $ 187,700 – the largest in reports – was for a mixed martial arts event in June 2007. The other big payments were mostly for raves sponsored by a company called Go Ventures Inc., including 82,000. $ for a 2010 New Years Eve concert. The company co-produced and $ 71,200 for its Halloween show the year before, according to reports.
An advance of $ 53,058 was made for a Daft Punk concert in July 2007. And the union received $ 7,131 in cash for the Lakers’ victory parade in June 2009, which was capped with a rally at the Coliseum. . Thousands of dollars in payments were also made for a Filipino game show and a Filipino religious program.
The advances are clearly detailed on the reports, almost all of which show they were approved by Colosseum-era CFO Ronald Lederkramer.
A Coliseum lawyer said in an email that the chief financial officer, former chief executive Patrick Lynch, had not presented the reports to the nine-member committee for review.
“[T]therefore, the commissioners would not have had the opportunity to review these statements and challenge the cash advance entries, ”said counsel, Deputy County Counsel Thomas Faughnan.
Los Angeles County Supervisor Zev Yaroslavsky, one of the four elected commissioners, said in a statement that until controversy engulfed the Colosseum last February, “I was never made aware of nor informed of financial statements of any kind that documented cash, payments to anyone.
Two other county supervisors who are commissioners – Mark Ridley-Thomas and Don Knabe – did not answer questions about the bills.
City Councilor Bernard C. Parks, who also sits on the commission, confirmed that the Labor Department is reviewing the advances.
“Their office called my office for information,” Parks said, adding that her staff referred the federal agency’s request to the Coliseum’s acting general manager and city comptroller, Wendy Greuel.
A spokesperson for the Ministry of Labor declined to comment.
Parks said the commissioners were informed by an accountant that the money came from the Colosseum ticket office or was ordered from a bank. “I don’t think it can be explained legally,” he said.
Appeals to the president of Local 33 of the Burbank-based union were not returned. The head of the international organization in New York, Matthew Loeb, did not respond to a request for an interview.
The union is large in the entertainment industry, with more than 100,000 members across the country.
IATSE’s distinctive union etiquette is often seen at the end of the film credits.
An internal audit of the commission began to focus on cash advances after The Times made a public document request in September for documents about the Colosseum’s failure to make required contributions to employee retirement accounts.
The Colosseum hired the machinists under a union contract that imposed pension contributions.
It is not clear whether these contributions were made when workers’ wages were paid in cash.
The commission sued Lynch, its former event manager and two rave companies to recover allegedly embezzled funds. The lawsuit does not name the machinists’ union or any of its representatives.
He alleges that Lynch, former events manager Todd DeStefano and unidentified promoters “caused or made” the cash payments. He alleges that cash advances of $ 557,710 were made at events promoted by Go Ventures, and payments of $ 209,581 were made at events promoted by another rave company, Insomniac Inc. The lawsuit Also accuses Go Ventures and Insomniac of having acted with Lynch and DeStefano to siphon off. concert revenue that should have gone to commission.
Lynch’s attorney, Tony Capozzola, said his client never handled the money. Lynch, DeStefano and the rave companies have denied any wrongdoing.
Sources with knowledge of the situation said that one or more companies founded by DeStefano received approximately $ 400,000 from Insomniac in 2009.
That would bring to at least $ 2.2 million the amount DeStefano’s companies raised from Insomniac, Go Ventures and other companies that did business with the Coliseum while he oversaw them in his work at the Coliseum. government, according to records and interviews.
Lynch, for her part, received about $ 400,000 from a Coliseum janitorial contractor in regular payments over about five years, with most of the money sent to a Miami bank, according to records and interviews. Capozzola said the payments relate to a private boat deal between his client and the contractor.
Los Angeles Times writer Andrew Blankstein contributed to this report.