Documents Indicate DA Violated Court Order on Toyota Settlement Money

Documents recently obtained by Voice of OC raise questions about whether District Attorney Tony Rackauckas’ office violated a court order that banned certain types of spending from settlement money.

The court order enforces the settlement between the DA’s office and Toyota Motor Corp. in Rackauckas’ lawsuit over the car company’s deadly sudden acceleration problems.

It requires that $8 million be used for the DA’s gang reduction program, known as GRIP, and gives specific directions on how those funds can and can’t be spent.

Except for workers at the nonprofit group Community Service Programs, “the funds cannot be used to pay for employees of the program partners, including…school personnel,” states the April 2013 order by Judge Lee Smalley Edmon of Los Angeles County Superior Court.

Yet the DA’s office appears to have done just that, spending much of the money on school staff, according to county records.

DA officials started a tutoring program last year, using the funds to pay dozens of public school teachers to tutor at-risk youth involved in GRIP, according to records from the county Auditor-Controller’s office.

In all, over $200,000 of the Toyota money has been paid to teachers as part of the tutoring program, the records show.

Six of the teachers were paid over $90 an hour, with one teacher receiving $98.77 per hour, according to their contracts. Most received $50 per hour.

All of the tutors are schoolteachers, according to DA records. As for whether they are “employees of the program partners,” as the court order states, a recent DA filing about the tutoring program says that “GRIP partners with various public schools” for its services.

(Click here to read the court order, here for a breakdown GRIP tutor spending from Toyota settlement funds, and here for DA statements that the tutors are schoolteachers.)

The DA’s office declined to comment, including on whether it plans to inform the court about the spending, given the judge’s restrictions.

County officials describe the tutoring program as a worthwhile endeavor. Nonetheless, they’re concerned that the spending could have violated the court order.

When asked about the matter, county CEO Frank Kim reiterated earlier comments that the money needs to be spent in line with the judge’s direction. “We support using the settlement funds consistent with the language of the court order,” Kim said.

He declined to say whether he’ll be bringing a discussion of the issue before the county Board of Supervisors, which is charged with overseeing county financial and legal issues.

The DA’s GRIP spending is also now drawing scrutiny from Auditor-Controller Eric Woolery, who sent a letter Monday to the DA’s office noting that supporting documents are lacking for about $860,000 of the Toyota settlement spending on GRIP this year.

The financial records for those items do “not provide the same detailed supporting documentation that was previously provided” on earlier spending requests by the DA, wrote Woolery, whose office is in charge of processing and paying county bills.

Woolery asked for similar details for this year’s expenses “to ensure that OC GRIP expenses are properly reimbursed from [settlement money] in accordance with the” Toyota settlement.

(Click here to read Woolery’s letter.)

The court order concerns have come to light as Rackauckas has been trying to get the board’s approval to expand the program to more schools at a cost of about $460,000 per year in settlement money.

He’s gotten significant pushback, based largely on legal concerns from the County Counsel’s office, each of the three times he’s tried to bring it before the board – so far unsuccessfully.

In light of those concerns, supervisors’ Chairman Todd Spitzer has said he’s not okay with using the settlement funds to pay teachers. “I’m not comfortable approving something that appears to violate a court order,” Spitzer said recently.

And one of the most politically influential groups in the county – the Orange County Business Council – has voiced its strong opposition, saying that using settlement funds to pay for government programs incentivizes the DA to keep filing lawsuits against businesses to keep the programs alive.

It’s unclear what, if anything, will happen next.

Attorneys for the DA, county, Toyota or state Attorney General – who supervises DA’s offices – could notify the court about the potential breach.

And if a judge finds that the DA’s office violated Edmon’s order, they could take actions like imposing sanctions on the DA or changing the order to allow the spending.

Spokespeople for Attorney General Kamala Harris didn’t return multiple messages about the issue. And Toyota spokesman Aaron Fowles declined to comment.

You can contact Nick Gerda at ngerda@gmail.com, and follow him on Twitter: @nicholasgerda.