Consultants at Forde & Mollrich, one of the biggest names in Irvine's decade-long Great Park saga, were issued a subpoena this month demanding they turn over a litany of records to the city’s forensic auditor, including: receipts, checks, invoices and correspondence, among other documents.
The likely unprecedented city-issued subpoena, dated May 2, is part of an investigation into the finances of a 1,300-acre project that at one point was envisioned as Orange County’s rival to New York’s Central park, but has instead become a poster child for big-money government boondoggles.
Forde & Mollrich has been a longtime lightening rod for Great Park critics due to its former no-bid $100,000 per-month public relations contract. Another subpoena was sent the day before to landscape architect Mia Leherer.
Auditors with Newsport Beach-based Hagen, Streiff, Newton & Oshiro Accountants (HSNO) claim to have already found significant waste and abuse under the audit’s initial phase.
However, a second audit phase, approved by Irvine City Council in January, elevates the probe into a full-blown investigation, including the power to subpoena uncooperative consultants. The council action also allocated $640,000 total to the effort.
Meanwhile, Forde & Mollrich has slammed the investigation as a with-hunt aimed at bolstering the political fortunes of the current Republican council majority by trampling on the park’s reputation.
Irvine council members Christina Shea and Jeff Lalloway, who serve on the council subcommittee tasked with getting regular updates about the audit, say the reason for Forde & Mollrich's subpoena was simple: the firm is missing deadlines and not turning over everything that has been asked of them.
“They’re wasting our time. They’re wasting taxpayer money,” Shea said. “It’s just not something we’re going to tolerate.”
Forde & Mollrich – which collected $7.2 million between 2005 and 2012 promoting a park that had yet to be built -- faces a full performance review under the investigation.
It’s unclear why Lehrer, a landscape architect, has yet to cooperate with auditors. However, Shea says Lehrer might have gone unpaid as a subcontractor under the master design team.
“The auditors are concerned that her invoices were not paid as required by the contract under [master designer] Ken Smith,” Shea said. “My sense is she’s frustrated because she hasn’t been paid.”
Forde & Mollrich partner Stu Mollrich and Lehrer did not return phone calls seeking comment.
It is rare for cities to use legislative subpoenas, and it is probably the first time Irvine has done so. The subpoenas are signed by ret. Judge Nancy Wieben Stock, who was brought in to make the process impartial by acting as an independent overseer.
The park has long faced allegations of corruption and mismanagement. Critics point to a pattern of awarding key no-bid contracts to consultants who helped bankroll the election campaigns of the Democratic City Council members.
Until recently, the Democrats, led by Larry Agran, held the council majority.
But in 2012, Republicans Shea, Lalloway and Mayor Steven Choi captured the majority at least in part because they campaigned heavily on bringing fiscal accountability to the Great Park project. They commissioned the forensic audit in one of their first council actions.
Now in the minority, Agran and Democratic Councilwoman Beth Krom criticize the audit as political posturing. They answer their critics by pointing to soccer fields, a palm court complex, large events and other amenities that have been built at the park.
Agran and Krom also note that the park’s financial plan depended on the city’s redevelopment agency, which captured the rise in property tax revenue generated by the surrounding development of thousands of homes.
However, Gov. Jerry Brown eliminated the financing mechanism, diverting away what was supposed to be over $2 billion in funding for the park over 40 years.
Krom has gone so far as to say the audit was facilitated by complicit news media to paint a false narrative about the park. Forde & Mollrich is a target, she said, because the firm was involved in the highly charged political battle to stop an international airport from being built at the shuttered El Toro Marine air base, the site of the park project.
The auditors, however, have made startling revelations about the park’s finances.
At a council meeting last January, HSNO auditor Christopher Money made a slide-show presentation showing how city leaders awarded millions in sole-source contracts with little to no accountability to a roster of consultants, who were closely tied to longtime Agran and park CEO Mike Ellzey.
Perhaps most alarming of the findings were the many contract change orders. For example, the contract to build the so-called Preview Park, which includes the iconic orange balloon, jumped from over $1 million to over $7 million, five times the original amount.
In an interview, Agran said that a memo sent to Council from Shea and Lalloway about the subpoenas indicates that most everyone was cooperating with the auditor.
The memo also mentioned possibly issuing a subpoena to Mexico-based Ten Arquitecos because the consultant has yet to respond to requests for documents.
Ten Arquitecos Managing Partner Andrea Steele said the delay is because the company has had to collect documents from a far away location.
“We’ve not relinquished any documents yet, because as I told the lawyers, we’ve had to get everything shipped to us from a New Jersey office,” Steele said. “We have been in contract with the lawyers and have been responsive.”
Lalloway said the forensic investigation will probably wrap up by this summer.