Irvine's City Council voted unanimously Wednesday afternoon to ask a Superior Court judge to order Stu Mollrich – partner with former Great Park consultant Forde & Mollrich – to turn over financial records and answer questions related to a forensic investigation into the park’s finances.
Mollrich, appearing at a July 30 deposition under subpoena, refused to answer questions about the firm’s overhead, salaries and profit margins related to its former $100,000 per-month public relations contract. City hired auditors are trying to determine whether the city was massively overcharged for those services.
Mollrich defied a 5 p.m. Monday deadline to comply with the demands. The firm made a request to enter mediation to resolve the standoff, but city officials said they wouldn’t bargain over their right to access the consultant’s records.
The public relations 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 Great 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.
Mollrich and defenders of the contract – including members of the Democratic council bloc who until 2012 held the majority and therefore controlled the park – argue the investigation is a political witch-hunt by Republicans.
At Wednesday’s special council meeting, members of the new Republican council majority – who commissioned the audit last year – accused Forde & Mollrich of violating its contracts and the law by refusing to answer questions and submit financial records to auditors.
The firm has turned over invoices. But Anthony Taylor, attorney with the firm Aleshire & Wynder, LLP, which was brought in to help with the investigation, said they didn’t provide sufficient detail, such as the tasks completed for the hours charged.
There were also discrepancies related to the billings. For example, a timesheet submitted claimed $29,465 worth of work, Taylor said. But the amount billed to the city for that period $88,536, he said.
“[Stu Mollrich] has two legitimate choices -- he can tell the truth and comply, or face the court,” said Republican Mayor Steven Choi.
Anthony Taylor, attorney with the firm Aleshire & Wynder, LLP, which was brought in to help with the investigation, cited specific provisions in Forde & Mollrich’s contracts that require the firm to grant city access to its financial records.
Mollrich didn’t attend the meeting. But a 12-page statement sent to a reporter Monday explained at length his firm’s achievements on behalf of the park. It also stated why he didn’t believe the city is entitled to information about its employee salaries and profits.
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,” the statement continues. “The only thing that matters is whether the services that were contracted for were received and whether they were satisfactory.”
Democratic council members Larry Agran and Beth Krom surprised City Hall watchers by voting to support taking the matter to an Orange County Superior Court judge.
“We’ve reached a point where it does need some adult supervision in the form of a judge who will resolve the issue,” Agran said.
Krom asked whether Aleshire & Wynder would be willing to abide by the same standards of transparency the city is demanding of Forde & Mollrich. The audit and investigation – commissioned over a year ago -- has so far cost over $1 million, Krom pointed out.
“Absolutely,” responded David Aleshire, a partner with the firm. “If [Forde & Mollrich’s] billing records were as detailed as ours, we wouldn’t be here. We have this information… we’re not trying to hold anybody to a different standard we hold ourselves to.”
Krom also criticized a series of depositions released publicly that have cast a narrative of mismanagement and dysfunction between the park’s top officials and the consultants who were supposed to answer to them. She said the depositions were big on opinion, small on facts.
“The credibility of an audit can’t possibly be improved by allowing depositions in advance of a final report,” Krom said.
The depositions by top park officials showed that Forde & Mollrich partner Arnold Forde, who was close to Agran, became what Taylor called “de facto project manager,” a duty that went beyond the scope of the contract, Taylor said.
Taylor estimated that the city could get a court hearing on the issue by Aug. 25. It’s possible that a judge could then order an Orange County sheriff’s deputy to forcibly escort Mollrich to court.
However, no matter which way the judge decides, either side can appeal, Taylor said.