Wednesday, June 22, 2011

U.S. Senator Sends Letter To Secretary of Housing and Urban Development Wanting A LOT OF ANSWERS About L.A. Mayor Villaraiogsa's Housing Authority

OH BOY! Way to run the show, Antonio Villaraigosa. You got FBI all over City Hall. The D.A. investigating stuff...a THIRD L.A. City building inspector BUSTED, yesterday (6/21/11, see story below this one on this blog)...AND NOW, you got a U.S. Senator sending letters to the Secretary of Housing and Urban Development, asking AAAAAAAAAAAALLLL kinds of questions, requiring answers. OH NO! (Did you ever just wanna hop on a plane to Dubai and get the hell out of here and let Austin Beutner finish the rest of your mayoral term?)

Related article from today's Daily News. City Clowncil confirm Villaraigosa's new L.A. Housing Authority Commissioners. Issue of "ethics" is brought up. (Really? Unaware of any problems.)

March 23, 2011

The Honorable Shaun L.S. Donovan
Secretary U.S. Department of Housing and Urban Development
451 7th Street, SW
Washington, DC 20410

Dear Secretary Donovan:

I write to you today regarding continued problems at public housing authorities (PHA) across the country. The fraud, waste, and abuse of federal funding that has come to light at the Philadelphia Public Housing Authority might not be an isolated situation. Recently, I have been contacted by concerned citizens about questionable financial activities at the Housing Authority of the City of Los Angeles (HACLA) including the fact that HACLA employed the independent auditor Mayer Hoffman McCann P.C., the same auditor of the now infamous City of Bell, California.

HACLA's annual budget is more than $1 billion and a majority of those funds come from Department of Housing and Urban Development (HUD) programs. (See Eric Garcetti) HACLA also received more than $53 million in stimulus funds. On October 25, 2010, I sent a letter to HUD requesting comprehensive information on executive compensation at 26 PHAs around the country, including HACLA.

In that letter, I stated that many of the PHA executive directors make more than the governors of their state, and the Philadelphia PHA executive director was paid more than the mayor and governor combined.

In HACLA's October 29, 2010, response to my request for information on executive compensation,1 HACLA's Chief Financial Officer stated that the executive director received an annual salary of $271,086 in 2010. The executive director at the time, Rudolf Montiel, also received a bonus of $25,000 and his contract provided a housing allowance of $3,600 per month. It is my understanding that Mr. Montiel received 10 weeks of vacation and took numerous trips paid for by HACLA. The letter further stated that "He receives no additional compensation from LOMOD [a HACLA non-profit affiliate] or any other non-profit entity managed by this agency."

A 2009 letter from the Housing Authority of the City of Los Angeles to Senator Grassley. October 29, 2010. (Attachment 1) 2 LOMOD 2009 IRS Form 990. Page 7. (Attachment 2) 3 David Goldstein. "Are Housing Commissioners Living High on The Hog at Taxpayer's Expense?" (KCBS/KCAL)

IRS Form 990 for Los Angeles LOMOD Corporation states that Rudolf Montiel received zero compensation as president of LOMOD. But it also reports compensation from related organizations as nearly $442,000.2 Rudolf Montiel serves on the 2011 Board of Directors for the Housing Authority Insurance Group, which is the parent company of the Housing Authority Risk Retention Group, Inc. (HARRG). On February 16, 2011, I sent HUD a letter regarding the Philadelphia PHA and its questionable relationship with HARRG and, at this time, I am still waiting for a response from HUD.

Also in February 2011, Los Angeles press reported on HACLA Commissioners possibly "living high on the hog at taxpayer's expense." Specifically, HACLA Commissioners, who are appointed by the Mayor, spent approximately $158,000 over two years on travel, food and beverages. (Mostly into the mouth of Maria Del Angel.)

Many of these expenses occurred while attending housing related conferences at "swanky" hotels in Washington, DC, Miami Beach and Laguna Niguel. The Commissioners allegedly received per diem cash advances prior to some of the trips but used HACLA credit cards to pay for travel expenses instead of the cash advances already received.

In addition, I understand that the HACLA Board just recently fired Rudolf Montiel. However, in order to gain a full understanding on what has transpired and that the American taxpayer deserves to know how money was spent at HACLA please provide the following:

1) An explanation for the discrepancy between the total compensation package described by HACLA's CFO (about $330,000) and the salary disclosed on the IRS form 990 (about $442,000).

2) The most current contract for the HACLA executive director, plus documentation of all additional financial benefits provided to him, including retirement benefits, house and car allowance, bonuses, vacation package, etc.

3) The compensation that Rudolf Montiel received from HAIG from 2007 to the present.

4) The compensation that Rudolf Montiel received from LOMOD and/or other HACLA affiliated organizations from 2007 to the present.

5) The names and financial reports for all HACLA non-profit affiliates. Please include the complete lists of all officers and employees, as well as the yearly salaries and compensation they receive.

6) The names of all outside law firms under contract with HACLA. Provide all contracts and contract modifications from 2003 to the present. Also provide the billing statements from law firms to HACLA for the years 2003 to the present and the total amount collected for the same period.

7) Copies of "good cause waiver" request forms filed under Section 19(3)(a) of the consolidated Annual Contributions Contract related to HACLA between 2007 and the present.5

8) All legal settlements for HACLA from 2007 to the present. 9) All HACLA annual financial audits from 2006 to the present. 10) The total number of credit cards issued at HACLA, as well as the names of the HACLA employees and board members eligible to use those cards. 11) Rudolf Montiel's severance package from HACLA. I would appreciate a response to the requests set forth in this letter by no later than April 8, 2011. Should you have any questions, please do not hesitate to contact Brian Downey or Janet Drew of my staff at (202) 224-5225. Sincerely,

Charles E. Grassley Ranking Member


The Honorable Judith Borg Biggert Chair Subcommittee on Insurance, Housing and Community Opportunity Committee on Financial Services United States House of Representatives

The Honorable Michael P. Stephens Acting Inspector General U.S. Department of Housing and Urban Development Attachments


October 29, 2010
Brian Downey, Investigative Assistant
U.S. Senate Finance Committee
219 Dirksen Senate Oftice Building
Washington, DC 20510
Subject: Compensation for Rudolf C. Montiel, President CEO
Housing Authority of the City of Los Angeles, California

Mr. Downey,
This letter is in response to your email of October 14, 2010, requesting the "name of the Executive Director and the annual salary that he/she is paid" at the Housing Authority of the City of Los Angeles (HACLA).

The executive director, or in the case of HACLA, President and Chief Executive Officer, is Rudolf C. Montiel. (Most likely a "connected" guy, part of L.A. Mayor Antonio Villaraigosa & Richard Alatorre's crew.) He is the person within the organization who ultimately bears the responsibility for the organizations decision-making, goal-setting, and organizational and financial performance.

For background, the Housing Authority of the City of Los Angeles manages more than 9,300 housing units and almost 52,000 Section 8 Housing Choice Vouchers. ln 2009, HACLA achieved its most recent national "High Performer" rating for public housing authorities from the US. Department of Housing and Urban Development, Real Estate Assessment Center, and is now rated as a "High Performer" for both its public housing operations and Section 8 Housing Assistance Payment program.

In addition, through its non-profit HACLA manages an additional 45,900 vouchers in its Performance Based Contract Administrator (PBCA) contracts with HUD in Southern California counties.

Brian M, Downey, Investigative Assistant October 25, 2010
Senate Finance Committee Page 2 of 2
Subject; Compensation for Rudolf C. President CEO

Housing Authority of the City of Los Angeles, California

In response to your question. aside from health insurance and retirement package, Mr. Montiel currently receives an annual salary of $271,055. For the years 2008 and 2009, his salary was $255,507 and $263,182. respectively,

In 2009, Mr. Montiel received a bonus of $25000 He did not receive a bonus in either 2007 or 2008. Additionally, by contract, Mr. Montiel receives a housing allowance of $3,600 per month, which has not been altered during these 3 years. He has the use of a 2006 Toyota Prius hybrid vehicle. We estimate the value of his use of this car to be approximately $7,200 per year.

For clarification, please note that Mr. Montiei's compensation is limited to what he receives from the Housing Authority of the City of Los Angeles. He receives no additional compensation from LOMOD (referenced above) or any other non-profit entity managed by this agency.

Should you have any additional questions, please do not hesitate to contact me by phone at or by email.


David Esparza
Chief Financial Officer
Housing Authority ofthe City of Los Angeles
Cc: Rudolf C. Montiel, President CEO
Ken Simmons, COO-->

RELATED POST ON L.A. CITY CORRUPTION ALLEGATIONS UNDER L.A. MAYOR ANTONIO VILLARAIGOSA'S L.A. CITY HALL, CURRENTLY UNDER FBI, FED GRAND JURY, DA and other investigations into Housing Authority (HUD), Planning Dept., Dept of Transportation, Housing Dept. (Rent Escrow/REAP), PENSIONS...and a whole bunch of other stuff: FBI, Eric Holder, Obama Justice Department, Federal Grand Jury: Details on MORE Alleged CORRUPTION Under Villaraiogsa's City Hall (Pensions, Housing) (ONE OF MANY POSTS ON L.A. CITY HALL CORRUPTION. A good place to start.)


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