Video Derides Findings of Great Park Audit

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A former Great Park consulting firm targeted in Irvine’s forensic investigation has fired back with a video rebuttal that claims every finding about the firm in an initial audit report is either false or misleading, but mostly false.

San Diego-based Gafcon, Inc. was the manager for the Great Park Design Studio, the joint venture between park master designer Ken Smith and Gafcon. They led a team of consultants in designing the 1,300-acre project.

As envisioned, the park was supposed to cost more than $1.4 billion. But the project has become the county’s poster child for public projects gone awry, and the City Council’s Republican majority has launched an in-depth investigation to determine what happened to over $200 million spent.

Critics of the investigation have said since the beginning that it is a political witch-hunt aimed at bolstering the Republicans’ election fortunes. The park was for years controlled by a Democratic council majority.

But this is the first time a consultant has compiled a point-by-point response to discredit the preliminary audit by Newport Beach-based Hagen, Streiff, Newton & Oshiro Accountants, PC (HSNO), which found significant waste and abuse under the park project.

The hour-and-a-half long video uses public documents, statements from past audits, and video clips of park board meetings to illustrate its case. In some clips, Republican Councilwoman Christina Shea is seen contradicting stances she has taken in recent years regarding Gafcon’s work.

Shea, who sits on a subcommittee overseeing the audit, said she hasn’t seen the video. But she has been briefed about it, and she said the clips are taken out of context.

Nonetheless, the video takes direct aim at claims Shea and others have made over and over again to illustrate mismanagement and perhaps even criminal wrongdoing involving the consulting firm.

For example, the video says HSNO was off the mark when it claimed the Design Studio’s fixed-fee contract was inappropriate and the city shouldn’t have approved 50 change orders totaling $15.4 million.

The city, not the Design Studio, requested the change orders for various improvements, such as a restroom relocation.

“The fixed fee would have been the final fee had the city and the corporation board” not added more work, said Debbie Gunderson, the city’s former finance administrator, in the video.

Additionally, the video claims:

  • The park isn’t being built as forecast because the Great Recession hit and delayed a private housing project that was supposed to provide the project’s main revenue stream. Shea is quoted at a Nov. 27, 2007 meeting as saying “it’s no one’s fault” that the project won’t be completed as envisioned, “it’s just the economy.”
  • HSNO’s allegation that the city did not vet Gafcon is false because council members personally vetted the firm during a two-day trip to New York. Also, two separate juries judged 24 design team entries.
  • The audit contends that the Design Studio submitted inadequate documentation. But while a previous audit highlighted how invoices could be improved, the city’s independent program manager closely reviewed the invoices and city staff asked tough questions.
  • The audit’s claim that the Design Studio was apparently paying for more than one full-time secretary is false. While another staffer filled in for lunch breaks and other temporary situations, that shouldn’t be interpreted to mean there was double-billing for secretary work, according to Paul Najar, Gafcon general counsel.

The video shows park manager Glenn Worthington saying at a board meeting that invoices have the proper “checks and balances,” and that the project’s program manager, Bovis Lend Lease, “reviewed and provided detailed comments on each and every invoice we used to adjust how much we paid.”

The video goes on to state that the audit falsely claimed public affairs consultant George Urch was a public relations consultant, that his services were incompatible with a contract change order, and that Urch did individual work for council members.

HSNO, the video says, mixed up public affairs work – like leveraging relationships with government leaders for development opportunities – with public relations work, which is promoting the park to the general public, a distinction referenced on Wikipedia.

It also contends the HSNO audit failed to mention that Urch’s work for council members also meant he was working for them as Great Park board members, and that the change order didn’t just include design work.

HSNO’s contention that Urch’s work could have been done by city staff is false because they don’t have the high-level contacts Urch has as a public affairs consultant, the video claims.

Shea – who is quoted several times in the video praising Gafcon and city staff for their work – says it’s misleading to take opinions and statements she made back then and compare them to her current stance. She also noted that she had voted against choosing the Ken Smith design team for a lack of experience.

“We realized when the audit came out, much of the problems we were experiencing weren’t a result of the recession,” Shea said. “If I knew in 2007 what I know today, I never would have made that statement.”

She said her opinions changed dramatically after a 2009 audit found a possible double-billing by a Great Park subcontractor, shoddy accounting and other problems. And she countered that Gafcon’s claims were the inaccurate ones.

“We didn’t vet Gafcon in New York, we just met him in New York,” Shea said. “It was just an hour-long interview with him for what his plans are.”

Councilman Jeffrey Lalloway, the other member of the audit subcommittee, said he found it “odd” that Gafcon would release a video instead of make all its points during depositions and under oath.

“The time for explanation was when [Gafcon owner Yehudi Gaffen] was under oath,” Lalloway said.

The HSNO audit report was only preliminary, and a few mistakes were publicly acknowledged when the report was presented at a council meeting.

An updated report is expected to be public within weeks.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek

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