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Tracing Coliseum's fiscal decay

As stadium's finances nose-dived, commissioners took little notice

December 31, 2011|By Paul Pringle and Rong-Gong Lin II | Los Angeles Times
  • A file photo of the Los Angeles Memorial Coliseum in 2010.
A file photo of the Los Angeles Memorial Coliseum in 2010. (John W. Adkisson / Los Angeles…)

Month after month, the financial forecasts for the Los Angeles Memorial Coliseum seemed as sunny as could be.

General Manager Patrick Lynch would tell his bosses on the Coliseum Commission that the box office from rave concerts was brisk and a lucrative deal for naming rights to the stadium could be just around the corner, records show.

For the most part, the nine-member commission took the affable Lynch at his word. And why not? As L.A. County Supervisor Don Knabe, who sits on the panel, said: "We were making money."

Despite Lynch's assurances, there was a different reality: The Coliseum had become mired in conflicts of interest, spending irregularities and loose accounting that eroded its fiscal foundation and had all but bankrupted its future as one of the nation's most-storied public landmarks.

Lynch resigned in February after The Times began a series of reports on the Coliseum's finances. He and his former events manager, Todd DeStefano, who quit shortly before the first story appeared, are the subjects of a criminal investigation by county prosecutors involving alleged kickbacks and self-dealing. State regulators and the Los Angeles city controller's office have also launched inquiries.

Three other Coliseum managers and employees have gone on leave or left the stadium's employment after The Times' investigation questioned the propriety of their financial dealings. All deny wrongdoing.

How a multimillion-dollar scandal at such a high-profile venue could go undetected for so long is not entirely clear. But the groundwork for alleged abuse lay in a history of clumsy stewardship, inattentiveness by commission members and a cozy relationship between Lynch and his overseers.

The commission was empowered to safeguard the interests of the state, county and city. But it became more of a sportsmen's club than a watchdog.

"The place was on autopilot," said mall developer Rick Caruso, who resigned as a commissioner earlier this year. He was often a lone voice in challenging Lynch, with scant results. "There was no accountability."

The Coliseum is now so broke that it is unable to make upgrades promised in its lease with USC, whose football Trojans are the stadium's main tenant. As a result, the panel is about to turn over day-to-day control of the taxpayer-owned property to the private school.

Jessica Levinson, a Loyola Law School professor who studies public corruption, described the commission's failure to spot warning signs of the scandal as a "great tragedy."

"This was below the standards of how you would run a neighborhood lemonade stand," she said.

The Coliseum, completed in 1923 when Warren G. Harding was in the White House, was heralded as a symbol of a burgeoning metropolis' ambitions to play on the global stage.

Its design by Los Angeles architect John Parkinson evoked the grandeur of its Roman namesake. When it opened, it was the crown jewel of the city.

Such a grand project, costing $800,000 at the time, required a compromise among often-competing interests -- private boosters and the city and county governments. The state, which owns the land, also had a stake.

The result was a hydra-like commission that eventually was made up of three members from each of the governments, with none empowered to take decisive action. The commission presidency rotates annually among members.

It was an awkward arrangement, but the venue's bottom line thrived for decades.

The Coliseum became the site of the 1932 Summer Olympics; it was already home to USC and UCLA football. After World War II, the stadium picked up pro football's Rams and, briefly, Chargers. It was the playing field for the Dodgers upon their arrival from Brooklyn, and would host the World Series, Super Bowl and a second Olympics in 1984.

The companion Sports Arena made its debut in 1959, the year before it staged the convention that gave John F. Kennedy the Democratic presidential nomination. It became the home of the NBA's Lakers and Clippers and the NHL's Kings.

By the late 1960s, however, the professional teams began to decamp -- in part because of their frustrations with what was viewed as the commission's inability to get things done.

The Rams took off for Anaheim in 1979, complaining that the agency had failed to improve the concession stands, parking, sound system and scoreboard. Ending its half-century stay, UCLA moved to the Rose Bowl in 1982, angered by the commission's plan to install luxury boxes for the Raiders, which would have supplanted seats for college games.

The Raiders returned to Oakland in 1995, after the Coliseum did not build those luxury boxes.

The loss of the franchises meant there were fewer eyes on the commission and a waning interest in its affairs, including by the members themselves.

It was around this time that the panel hired Lynch. With the commission's blessing, he filled the leadership vacuum.

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