Former Great Park consultant Forde & Mollrich has defied an ultimatum set by the city of Irvine to turn over financial records relating to the firm’s infamous Great Park public relations contract by 5 p.m. Monday.
The firm informed an attorney working for Irvine that it would not comply with the demand, according to Councilwoman Christina Shea. Shea said the City Council would hold a special meeting this week to consider taking the issue before a Superior Court judge, who could order Forde & Mollrich to turn over the records.
The standoff comes after months of attempts by auditors to obtain records during a forensic audit into the park’s finances. The probe – commissioned by the Republican council majority – is trying to determine whether Forde & Mollrich severely overcharged for services related to its years-long $100,000 per-month public relations contract to promote the park.
That contract over the years became the symbol for critics who allege corruption and waste at the 1,300-acre park project. While initially envisioned to compete with New York Central Park, the park has fallen short of expectations while spending north of $200 million.
Park critics allege the company’s services were not worth anything close to $100,000 monthly, and that the no-bid contract meant overinflated profits for the politically connected firm.
Since 2005, Forde & Mollrich has been paid more than $7.2 million.
Forde & Mollrich partner Stu Mollrich couldn’t immediately be reached for comment. But in a 12-page statement sent to a Voice of OC reporter, the firm described at length its accomplishments on behalf of the park and accused the audit of catering to the political agenda of the council majority.
“This audit has the appearance of a star chamber proceeding, conducted entirely in secret,” the statement reads. “Even members of the City Council have not been allowed full access to the information regarding invoices and reports of the subcommittee, its attorneys and consultants.”
In a July 30 deposition under a city-issued subpoena, Mollrich flatly refused to answer questions regarding employee salaries, overhead and profit margins related to the firm’s park contract. The deposing attorney, Anthony Taylor with Aleshire & Wynder, LLP, threatened Mollrich with a contempt hearing at Orange County Superior Court.
If the city approves pursuing a court intervention, Shea said the judge could order Orange County Sheriff’s deputies to escort Stu Mollrich and/or Arnolde Forde before the court and order them to turn over the records.
However, Shea acknowledged, it’s unlikely that it will get to that point.
Forde & Mollrich’s statement claims the firm has provided over 25,000 pages in records, doesn’t have the records specifically demanded and is not required under its fixed-fee contract to reveal financial information like profit margins and employee salaries to auditors.
The firm compared its fixed-price contract to hiring a contractor to build a house. “You don’t have the right to audit the contractor’s books, ask how many employees he hired, how much he paid them and what the profit was,” the statement says.
“Mr. Taylor’s demands would violate the privacy of our employees and place our firm at a competitive disadvantage in bidding and negotiating future contracts,” according to the statement. “The only thing that matters is whether the services that were contracted for were received and whether they were satisfactory.”
According to Shea and Taylor’s letter, Forde & Mollrich’s city contract specifically requires production of the demanded records.
“The contract requires them to come in with detailed financial books,” Shea said. “They are presently in breach of contract. If I have support of the council, we will sue them.”