Since 1778, whistle-blowing has been one of the best tools to fight government corruption. However, Culver City officials recently engaged in a secret switcheroo that makes one observer wonder whether Culver City is truly committed to establishing an effective fraud, waste, and abuse hotline (FWA Hotline)—one that inspires trust and confidence.
As of September 9, 2019, everyone involved—the City Council, the Ad-Hoc Subcommittee on Internal Controls, the Finance Advisory Committee (FAC), City Attorney Carol Schwab, City Manager John Nachbar, Chief Financial Officer Onyx Jones and Moss Adams LLP (Moss) –totally agreed. Pursuant to Moss’s 2017 recommendation, Moss—as Culver City’s Internal Auditor—would process FWA-Hotline complaints received through a FWA-Hotline-answering service.
Less than one month later, Schwab drafted a contract with Lighthouse Services LLC—a FWA-hotline-answering service. Schwab, Nachbar, and Jones signed it. However, WITHOUT knowledge of the FAC or the City Council and contrary to Culver City’s public commitment to Moss’s recommendations, Lighthouse would deliver all complaints directly to Schwab, Jones and Assistant City Manager Serena Wright. None is an Internal Auditor. They call it a “pilot program.”
For details of this sordid affair, see www.LGEsquire.com/191112_FWA-Hotline Problems.pdf
So, what occurred in that one month to justify the secret switcheroo?
On November 20, after complaining about staff playing hide-the-ball, I exposed the previously secret “pilot program” to the FAC. The FAC inquired of CFO Jones. She claimed “things changed,” but did not explain any need for the change and the secrecy, only saying she informed Nachbar and Moss. In other words, they formed a conspiracy of silence. She stated that, by March 2020, Culver City would hire an employee as Internal Auditor, and switch back to Moss’s original recommendation. Moss’s contract expires in June 2020, but she said that Moss cannot be used as the Internal Auditor to receive FWA-Hotline complaints. Huh? That was the plan until Schwab drafted the Lighthouse contract. The Moss representative stayed mum. I provided Jones with a copy of Beverly Hills’s well-constructed FWA-Hotline manual. She claimed that Beverly Hills spends $500,000 per year on its FWA Hotline. (Fact check: Beverly Hills’s FWA Hotline has been in operation for 2-1/2 months. Therefore, no annual expense information is available.) Without suggesting how or by whom, the FAC recommended that the City Council be informed about the “pilot program” and its termination in March 2020.
There are several problems operating Culver City’s not-ready-for-prime-time FWA Hotline. Culver City’s current FWA-Hotline website is confusing, contradictory, and misleading. Potential whistle-blowers are not informed of the switcheroo or the identity of the decider-in-chief. Further, there is a confidence problem.
Moss produced a 59-page City of Culver City Enterprise Risk Assessment (November 15, 2019). A critically annotated copy is available at www.LGEsquire.com/191115_Enterprise Risk Assessment.pdf . Buried at pages 40-42, Moss warns that 44% of Culver City’s supervisors, managers and director-level employees do NOT affirmatively believe whistle-blowers would be protected from retaliation. The low confidence level was measured before anyone knew that, in the middle of the night, the wolves took over the chicken coop.
A long-time resident and cynic explained it to me: Culver City has whistle-blower- retaliation risk and a not-ready-for prime-time FWA-Hotline website. Before March 2020, potential whistle-blowers will shy-away. Culver City will announce that, due to very few people using the FWA Hotline, it is not economically justified, and, thus, the “pilot program” will remain in place. Paraphrasing Mick Mulvaney, the cynic stated, “That is the way we do government in Culver City. Get used to it.” He said he will comment further in March 2020.
The preferred solution: Culver City should shutter its FWA Hotline until it publishes a professionally-written operating manual, its website is cleaned-up and Moss or another Internal Auditor is named to administer the FWA Hotline.
Les Greenberg, Esquire