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‘What the Hell Did You Do With|All That Money?’ CA Legislator Asks

SACRAMENTO (CN) - California legislators laid into the administrative bureaucracy of California's courts at a hearing in the capitol on Wednesday, where State Auditor Elaine Howle presented a highly critical audit documenting the bureaucracy's waste of hundreds of millions of dollars that should have gone to keeping the courts running during the state's long-running budget crisis.

"There's probably close to $2 billion that have been pushed into the courts. So the real question is, 'What the hell did you do with that money?'" Assemblymember Reginald Jones-Sawyer said.

Jones-Sawyer, a Democrat from Los Angeles, was the audit's legislative sponsor.

At the hearing's outset, he said that when he joined the State Assembly two years ago, the Legislature and the governor had already begun to pour a cumulative total of $2 billion back into the judiciary's coffers as the California economy began to turn around.

With the new director of the AOC waiting to speak, the legislator he said he has not seen any fundamental change in the judicial bureaucracy. "I'm still not comfortable that there's been any accountability," said Jones Sawyer. "There seems to be relatively no oversight, and there's no transparency."

The hearing is the result of years of criticism from judges and legislators over the AOC's spendthrift ways during a period of severe cuts to the courts, as California's economy and its budget constricted. Thousands of trial court employees were laid off and courthouses shuttered up and down the state, but all the while the massive bureaucracy at the top of the court system cut little from its budget while pouring $500 million into a controversial statewide IT project.

Legislators, judges and union members hoped that with a new director appointed in the fall, things would change. The new director, Martin Hoshino, also spoke before the committee and declared that progress is coming slowly, as Service Employees International Union representative Michelle Castro wished the director well but added that the bureaucracy has "a very entrenched culture of poor decision-making and hubris."

Howle's audit, released in January, pointed to an excessive $30 million spent over a four-year period on salaries for employees of the judicial bureaucracy, the Administrative Office of the Courts, as well as $386 million spent by the AOC over four years on statewide services that nearly half of California's 58 trial courts don't use, including $186 million on contractors and consultants.

"Despite budget shortfalls and budget cuts, the AOC continued to provide its employees with unreasonably high salaries and generous benefits. There is a disconnect about what the AOC is doing and what the courts need," Howle said, testifying Wednesday before a panel of lawmakers from the Joint Legislative Audit Committee, a budget sub-committee chaired by Jones Sawyer and Assemblymember Mark Stone who chairs the assembly's judiciary committee..

She pointed to an internal investigation of the bureaucracy by a team of 14 judges back in 2012 called the Strategic Evaluation Committee, appointed by Chief Justice Tani Cantil-Sakauye to address wastefulness and mismanagement in the bureaucracy. In a lengthy report saying the bureaucracy needed to return to its first job of serving the courts of California, the SEC committee came up with 124 recommendations for reform.

Howle confirmed the criticism from many observers who said those reforms never got off the ground, and described the SEC report's conclusions as similar to her own.


"The language is much quite frankly, stronger than in our report. It was interesting to us to see how similar many of the conclusions and recommendations were between the two reports, and that's where my concern is raised, personally," Howle said. "That report came out in May 2012. There has not been much progress in some of these key areas."

"Here we are in March 2015, almost 3 years later," she continued. "There needs to be fundamental change at the AOC. There's some cultural change, with all due respect, that needs to happen at the executive level. They talk the talk, but they don't walk the walk."

Jones-Sawyer asked Howle, "There's probably an entrenched group of people in the system that are comfortable with the status quo. Did you get a sense there is anyone who will take the bull by the horns?"

Howle pointed to the recent hiring of Martin Hoshino from the California Department of Corrections and Rehabilitation as the new AOC Director, as a good start.

"Certainly Martin was a good hire. But he's only one person."

While Jones-Sawyer had opened the hearing by saying he was "ecstatic about the audit," not all legislators shared his enthusiasm.

Senator Richard Roth (D-Riverside), said that in the context of a total judiciary budget of $3 billion, a waste of $30 million does not compare to the much greater sum of $500 million wasted on the Court Case Management System, a software project declared dead in 2012 by the Judicial Council.

"If the total is $30 million on a $3 billion budget, while we should obviously be sensitive to that and urge the judicial branch to be more efficient," said Roth. "It's somewhat less impactful if it were $500 million and another computer project," he said.

When it came his turn to speak, Hoshino defended his agency and said reform is underway.

"We have ended employer payment of employee retirement contributions, the office directors will no longer receive the option of receiving reimbursement for parking, and of the vehicles people spoke of, we have eliminated one third of those 66 vehicles," he said. "For the balance of the recommendations, there are bigger, more systemic things that are getting into more of the strategic planning and definition of services. They take more time."

Changing the longstanding culture of the AOC may take many more years, he argued.

"Culture change is measured in big chunks of time. It's not going to get done in six months. These things will happen in 10 years, 20 years," he said. "It's really about getting the right vision and the right set of values. I tend to focus just on performance. Once you know what everyone is supposed to do and you set the expectations, this thing happens that we end up calling cultural change."

In an interview after the hearing, Michelle Castro with the SEIU praised the changes Hoshino brought in his first months on the job, but said they haven't been nearly enough.

"Those were a good start, but there's more to do," she said. "People feel really good about Hoshino, they have a lot of confidence in him. But it's hard to separate the past form the current and the future, because the past has been so checkered. Everyone wants to give Martin a chance but he's one person in an institution with a very entrenched culture of poor decision-making and hubris. We're hoping he can be successful."

As of now, she said, legislators are reluctant to pump more money into the judiciary if they sense that the money won't be used to keep courts open. She added, "It's going to be very hard for there to be more money coming beyond what the governor has already put into its budget."

Jones-Sawyer's budget committee is set to hold its own hearing on the audit. On Wednesday, he hinted at increased legislative control, saying, "Maybe we can even do some budget language to institutionalize this so we can ensure accountability and access to justice and transparency, all of those things."

"There's a larger branch of government that hangs over all three branches and that's the people, and we manage the people's money," he said. "And at the end of the day, that's what all three are answering to."

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