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Labor nonprofit's consulting fees to officials investigated

Payments of $30,000 each to former L.A. Unified Board of Education members David Tokofsky and Jose Huizar, now an L.A. city councilman, are the focus of the federal probe.

August 06, 2009|Howard Blume, Scott Glover and David Zahniser

Federal investigators are examining whether a labor-affiliated nonprofit improperly funneled consulting fees to Los Angeles City Councilman Jose Huizar and former Board of Education member David Tokofsky, according to sources close to the probe.

The inquiry is looking into payments of about $30,000 each to Huizar and Tokofsky by Voter Improvement Program Inc., a nonprofit headed by former local labor leader Miguel Contreras, who died in 2005. Investigators want to determine if Contreras was, in effect, using the nonprofit as a slush fund to reward allies, said the sources, who declined to be named because the investigation is ongoing and confidential.

The probe apparently extends beyond the two officials whose names have come to light.

The fees to Huizar and Tokofsky were paid in 2003 and 2004 -- when both were on the Los Angeles Board of Education, sources said.

As part of the inquiry, a federal grand jury summoned current school board President Monica Garcia to testify, but she has not agreed to appear. Garcia, considered a witness rather than a suspect, could agree instead to an interview with prosecutors under a promise of limited immunity, a source familiar with the probe said.

Garcia served as chief of staff to Huizar during his five years on the school board, from 2001 through 2005. She also worked as his campaign manager during his initial and successful City Council bid in 2005.

Federal authorities declined comment.

Garcia is traveling in Mexico and could not be reached. She has retained an attorney, who also declined to comment.

Tokofsky, who recently returned from travel abroad, also could not be reached.

Approached in City Council chambers, Huizar would not answer questions. In a statement he said that he "followed all rules and regulations" while on the school board and that he "would be willing to cooperate with any inquiry."

In required disclosure forms, Huizar and Tokofsky listed their work with Voter Improvement. The broader issue is what work they performed and whether that employment relationship was appropriate, sources said.

Elected officials can legally earn outside income, but not from entities related to their official duties. There's an exception for employment with another government entity and for nonprofits. But if officials working under that exemption have a conflict of interest, they must recuse themselves.

Tokofsky navigated that situation when he accepted a job with Green Dot Public Schools, a nonprofit that operates charter schools within L.A. Unified.

During the period in question, the part-time school board members received $24,000 a year from the Los Angeles Unified School District. An extra job with Voter Improvement ostensibly would fall under the nonprofit exemption, but the link with labor raises questions because board members must approve all labor contracts.

Tax filings from 2004 state that Voter Improvement spent $93,054 on "nonpartisan voter registration, get out the vote, voter education and ballot measure advocacy." But this amount was dwarfed by $233,038 spent on consulting fees. These included $35,000 a year once paid to former state Assembly Speaker Fabian Nunez.

Not long after Contreras' death the group folded, turning its remaining assets over to another nonprofit, Los Angeles Alliance for a New Economy, whose efforts include a "living wage" campaign and environmental cleanup at the Port of Los Angeles.

Word of an investigation into Huizar and Tokofsky first appeared this week in the Daily Journal.

Although grand jury testimony is legally confidential, witness interviews outside of court are not -- and several current and former school district officials verified that they had been questioned over the last six months.

One of them, former school board member Marlene Canter, said she was interviewed in May by investigators from the federal Department of Labor and the U.S. attorney's office.

She said that until that interview she had never heard of the Voter Improvement Program.

Other sources have reported that FBI agents also have been involved.

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howard.blume@latimes.com

scott.glover@latimes.com

david zahniser@latimes.com

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