Whistleblower Alleges LA Housing Agency Misusing Public Funds

(CN) – A former top executive with one of the largest public housing agencies in the nation claimed he was fired for attempting to check corruption, according to a whistleblower lawsuit filed in Los Angeles Superior Court on Wednesday.

Ken Simmons, the former chief operating officer for the Housing Authority of the City of Los Angeles said he was fired after he found out the Los Angeles City Authority was overcharging the agency to the tune of half a million dollars a year and attempted to put a stop to it.

“Starting in or around the summer of 2016, Mr. Simmons repeatedly raised concerns that legal fees charged by the city attorney’s office were not supported by actual work performed,” the complaint says.

Simmons first noticed a $20,000 legal bill made out to the city attorney and asked a staff member about it, learning that the bill related to a property ownership search conducted via a legal database.

Not only did Simmons think the bill itself was exorbitant, but later found out the work could have been performed by staff internally without the assistance of the city’s legal office.

Upon further investigation, Simmons discovered the housing authority made quarterly payments to the city attorney’s office, but there was no paper trail that indicated the nature of the work performed.

Concerned about the potential for impropriety, he brought his concerns to the attention of his boss, housing authority President and CEO Douglas Guthrie, the complaint says. Rather than express interest, Guthrie accused Simmons of “causing problems” and told him to desist in his investigations.

But Simmons continued to look further into the matter, finding through interviews with staff and the examinations of bills that the city attorney’s office was vastly overcharging the housing authority, the complaint says.

In response, Simmons prepared written documents explaining his findings and presented them to Guthrie urging him to ask the city attorney to provide written explanations of their services on future invoices, Simmons alleges in the suit.

Furthermore, Simmons says he researched the legal services the city attorney provided prior to the delivery of a quarterly payment and found proof the housing authority has been overcharged.

He urged Guthrie not to disburse the latest check to the city attorney office, but says he was surprised when Guthrie demanded he pay the check without further question.

Growing increasingly frustrated, Simmons met with Guthrie and other housing authority executives, airing his sundry concerns. Guthrie and others assured him they would discuss the matter with the city attorney’s office.

Instead, when Simmons returned from vacation on August 2017, he was greeted by Guthrie, who took him into an office and informed he was being put on paid administrative leave and then fired.

“Mr. Simmons alleges HACLA terminated his employment in retaliation for being a whistleblower,” the suit alleges.

The housing authority has an annual budget of approximately $1 billion and controls the largest amount of affordable housing stock in Los Angeles.

It is almost entirely taxpayer funded, with the majority of its funds coming from the United States Department of Housing and Urban Development.

It’s not the first time in recent years the housing authority has been accused of impropriety, as its former CEO Rudy Montiel was fired after being accused of misuse of public funds and corruption.

A phone call placed to the Housing Authority was not returned as of press time.

 

 

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