City Controller Wendy Greuel's audit on lax fuel controls helped lead to the arrest of at least one city employee who was allegedly stealing fuel and then turning around and selling the gas on the streets of LA.
In case you missed it, here's today's LA Times story on the investigation:
L.A. gardener arrested on suspicion of selling city-owned gas.
He and another man are accused of selling thousands of dollars of city fuel on the black market. A tipster saw sales being made from a city vehicle.
By Andrew Blankstein and Kate Linthicum, Los Angeles Times
A gardener for the city of Los Angeles has been arrested on suspicion of embezzlement for allegedly selling thousands of dollars of city-owned gasoline on the black market.
Michael Lee, a 12-year veteran of the Recreation and Parks Department, was arrested Monday along with another man who police say worked with him to steal the fuel. According to police, the pair was detained after officers watched Lee fill up portable gas cans at a city fueling site in South Los Angeles and transfer the cans into a private vehicle several blocks away.
Police say the suspect and his alleged accomplice, Shane Gansterer, stole at least 800 gallons of fuel over the last three months, although the theft may have started some time before then. A third man, who was not identified, was briefly detained but later released.
Police were tipped to the alleged scheme in early April when a caller reported seeing a man selling fuel from the back of a city truck near the corner of 109th Street and VermontAvenue. The woman alerted police after seeing a televised news conference in which City Controller Wendy Greuel announced that the city was missing $7 million worth of fuel.
Greuel's audit of records and dozens of city fueling sites found that millions of gallons had been pumped over a three-year-period with no record of where they went, despite a $12-million tracking system the city put in place more than a decade ago.
Since 1999, the city has paid an outside company to help it monitor fuel levels and usage. Every transaction is recorded in a database managed by the Department of General Services, which in turn makes the data available to other departments. But according to the audit, only the Police Department analyzes the data on a regular basis.
Greuel, who is running for mayor, found that most departments don't effectively track employees' use of fuel, and warned that some of the unaccounted-for gasoline may have been used for personal vehicles.
A similar audit conducted in 2009 by then-Controller Laura Chick also found serious gaps in how the city tracks its fuel.
Every year the city spends close to $29 million buying 14 million gallons of gasoline, natural gas and diesel fuel to power police cruisers, garbage trucks and helicopters as well as light machinery like leaf blowers.
Some employees are issued fuel cards and use a keypad to sign in with their vehicle number and an odometer reading. Other city employees are assigned to vehicles that are equipped with a system that automatically logs mileage and gas consumption. According to Greuel's audit, those tracking systems can be bypassed, either manually or with so-called "master cards" that are assigned to each of the city's 141 fuel sites.
Auditors found the bypass mechanisms were used to dispense millions of gallons of fuel over a nearly two-year period beginning in 2009.
At 22 Los Angeles Police Department fueling sites, an override button meant for emergencies was used to pump $3.9 million in gas.
According to Los Angeles Police Department officials, Lee was allegedly pilfering gas from two LAPD pumps and a Department of Transportation fueling station. Jon Kirk Mukri, the general manager of the Recreation and Parks Department, said he did not know exactly how Lee was able to take the fuel, but he said, "This employee will be dealt with and he will lose his job."