June 25, 2011 – Coliseum official’s own companies made $1.7 million in deals, Los Angeles Times
Last year, Coca-Cola sent a $70,000 check to the Los Angeles Memorial Coliseum for its share of bottled water and soda sales at the historic stadium.
Then, said people familiar with the arrangement, the beverage giant got a curious call from a Coliseum representative with new instructions: Void that check. Coke was told to write a new one to a private firm — a business owned by the Coliseum’s events manager, Todd DeStefano.
Coca-Cola complied, cutting a fresh check to DeStefano’s company after receiving an invoice from him on the commission’s letterhead, said the sources, who are not authorized to speak publicly.
The redirected money was part of at least $1.7 million that companies owned by DeStefano received in about two years of making his own deals with firms that had business before the Coliseum Commission, according to interviews and agency records. The sum far exceeds the tens of thousands of dollars previously disclosed in a widening scandal surrounding DeStefano.
Other firms that paid him while he oversaw them in his government job included moviemakers, liquor vendors and the producer of the Electric Daisy Carnival rave. That event was marred by scores of drug arrests and ambulance calls, and led to the death of a teenage girl.
After The Times reported DeStefano’s financial relationships, state and county authorities launched conflict-of-interest investigations into his affairs. DeStefano quit his Coliseum job in January.
In addition to his extra income, he billed the commission last year for $1,584 in massages, was paid a $600 monthly car allowance and received $21,000 in free tickets to concerts, football games and other events at the taxpayer-owned Coliseum and Los Angeles Memorial Sports Arena. Those perks are detailed in copies of his expense reports and other documents obtained under the California Public Records Act.
An attorney for DeStefano, James Blatt, said his client has done nothing wrong. Blatt said Coca-Cola sent its original check to the Coliseum Commission by mistake, and DeStefano’s company was entitled to the $70,000 for negotiating the contract that allowed the bottler to sell beverages at the Sports Arena and Coliseum, the former Olympics site that is home to USC football.
The lawyer said DeStefano’s boss at the time, former commission General Manager Patrick Lynch, approved the Coca-Cola payment to the private company. Lynch’s attorney, Tony Capozzola, denied that but acknowledged that his client ordered the first check returned to Coke.
Lynch did not know the money would go to DeStefano’s separate firm and never told Coca-Cola to write a new check, Capozzola said. Others with knowledge of the matter said they did not know the name of the commission employee who gave those instructions.
The Coliseum Commission’s finance director said Lynch told him last year that DeStefano’s firm had a contract with Coca-Cola that would earn the commission about $20,000.
“I asked him several times after that, ‘Where’s our money? Where’s our money?'” said the financial officer, Ronald Lederkramer. “He would say, ‘I’ll talk to Todd.’ But we never got any money.”
DeStefano, in fact, had no authority to sign the contract and the Coliseum’s concessions arm never received proceeds from it, the commission’s interim general manager, John Sandbrook, told The Times earlier this month.
Coca-Cola spokesman Bob Phillips said his company was “disappointed to discover that Mr. DeStefano may not have been authorized to act on behalf of the L.A. Memorial Coliseum in his recent dealings with Coca-Cola. We are making every effort to work with the L.A Memorial Coliseum Commission and other public entities to rectify this situation.”
The $70,000 from Coke is a fraction of what two companies owned by DeStefano, LAC Events and Private Event Management, pulled in while he was on the commission’s payroll.
The firms were paid about $800,000 last year by the rave company Insomniac Inc., to help it stage rave concerts, said people familiar with the outlays — productions that fell under DeStefano’s normal responsibilities in his government job.
A second rave promoter, Go Ventures, has paid his firms about $876,000 since 2008 for work on Sports Arena shows, said the company’s chief executive, Reza Gerami.
DeStefano’s businesses also received tens of thousands of dollars from enterprises that shot film, rented space or had vendor contracts at commission properties. That income is shown in four years of state-mandated financial disclosures that DeStefano filed recently, after The Times reported that he had failed to submit them.
Blatt acknowledged that DeStefano’s take through his two firms — on top of a government paycheck of as much as $189,000 a year — “appears to be a significant number.” But he said it was justified by the years DeStefano devoted to drawing business to the site.
By Andrew Blankstein, Rong-Gong Lin II and Paul Pringle, Los Angeles Times
June 9, 2011 – L.A. Coliseum official profited from numerous side deals,
Todd DeStefano, the longtime events manager, collected tens of thousands of dollars in private payments from liquor and soft drink companies, television and movie firms, rave promoters and others that did business with the Coliseum.
A former top manager of the Los Angeles Memorial Coliseum Commission collected tens of thousands of dollars in private payments from liquor and soft drink companies, television and movie firms, rave promoters and other interests that did business with the agency, records and interviews show.
Todd DeStefano, who was the commission’s long-time events manager, entered into the lucrative arrangements with several of the enterprises while representing the Coliseum and companion Los Angeles Memorial Sports Arena in their dealings with the companies.
Among the deals:
• A company that DeStefano founded was paid $10,000 or more by Coca-Cola in 2010, the same year he signed a contract that gave the company the rights to sell its products at Coliseum events. He was not authorized to sign the contract, according to a commission official, and a $70,000 payment Coca-Cola was supposed to make to the commission’s concessions arm has not been received.
• DeStefano’s business received at least $10,000 from Southern Wine & Spirits, a company he helped to obtain a discount to lease the Coliseum for an employee party.
• His company took in more than $10,000 each from the film production “An American Carol,” the television show “American Gladiators” and a Santa Monica firm, Tool of North America, that shoots commercials.
• Separately, for several years DeStefano was guaranteed a 10% cut of contracts between the commission and companies that shot movies, television programs and commercials at the Coliseum and Sports Arena or advertised at the properties. This was on top of his salary and bonus.
The disclosures, which DeStefano made recently in state-mandated filings, chronicle a steep rise in his side income starting in 2008. The new information could widen the scandal surrounding the nine-member commission, which is appointed by the state, city and county. The Coliseum is home to the USC football team and has hosted two Olympiads, and the Sports Arena will be a temporary venue for UCLA basketball next season while the school’s Pauley Pavilion is renovated.
DeStefano has denied that he did anything wrong. After The Times reported his financial relationship with one of the rave promoters, Insomniac Inc., the Los Angeles County district attorney’s office and state Fair Political Practices Commission announced investigations into his affairs.
About the same time, the commission’s general manager, Patrick Lynch, who ran the Coliseum and Sports Arena for 17 years and approved DeStefano’s employment by Insomniac, resigned under pressure. Lynch’s lawyer, Tony Capozzola, said his client did not approve many of the other deals and received no compensation from DeStefano or any companies that did business with the commission.
The payments from DeStefano’s deals went to two companies he has, LAC Events and Private Event Management. The receipts are listed in four years of financial disclosures that he filed only recently. He submitted the declarations to the commission after The Times reported that he had failed to file them annually as required by state law.
An attorney for DeStefano, James Blatt, said his client “never acted surreptitiously. This was not secretive.” Blatt said DeStefano’s extra income was justified because he generated business to make the commission profitable. Last year, however, the agency’s financial statement showed that it sank into the red.
DeStefano’s government earnings were as much as $189,278 a year. Each of his private companies paid him more than $100,000 last year, according to his disclosures. His wife is listed as an officer in the companies and received salaries from both.
His companies each collected $10,000 or more from various interests that leased or otherwise used the Coliseum and Sports Arena properties. The forms require disclosure of dollar amounts only in broad ranges for those payments, without upper limits. Filers also are not required to list the reason they were paid.
DeStefano authorized the sale rights for Coca-Cola on behalf of the commission’s nonprofit concessions arm, but he was not empowered to act for that entity, said John Sandbrook, interim general manager of the commission. Under the contract, the beverage company was to pay up to $70,000 to the nonprofit last year.
But the concessions group received no payment, said Sandbrook, who could not explain why.
A Coca-Cola spokesman declined to comment, saying his company was looking into the matter.
For Southern Wine & Spirits, DeStefano arranged a one-day lease of the Coliseum for $2,000, which Sandbrook characterized as a discount. Sandbrook said an event planner for Southern Wine inquired about booking the site again this year but was informed that the fee would be $5,000 and declined.
“I told the company, ‘Look, there’s a lot of concerns we have, and I’d like to talk to someone at the company to get a fuller explanation of what the relationship was with Todd,’ ” Sandbrook said. “They declined and took their business elsewhere and did not talk to me.”
Southern Wine did not respond to Times requests for an interview.
DeStefano reported that one of his companies received a minimum of $10,000 in 2008 and in 2010 from the University of California. UCLA spokesman Phil Hampton said the school paid $11,248 in 2008 and $13,295 in 2010 for providing soft drinks and alcohol at receptions before Bruin-Trojan football games at the Coliseum.
The receptions were held at a city-owned swim stadium next door. Hampton said DeStefano offered to handle beverage service for the events, saying that he had the necessary permits.
DeStefano’s companies were also paid by a rave producer called Go Ventures, the filings show. Insomniac and Go Ventures each paid one or both of his firms at least $10,000 in each of the last three years.
Insomniac and Go Ventures did not return calls for comment.
An August 2006 memorandum obtained by The Times through the California Public Records Act granted DeStefano the 10% share of filming proceeds. The memo is signed by Lynch and DeStefano. DeStefano’s take was capped at $60,000 per year, but the memo stated that any funds above that amount could be paid to him the next year and guaranteed him $40,000 or a salary renegotiation if no film shoots occurred.
Sandbrook said DeStefano’s 10% arrangement ended after DeStefano asked and received permission from Lynch to be double-employed by Insomniac. Sandbrook, who succeeded Lynch, said he was “at a loss” to explain why the commission paid DeStefano a bonus for the location shoots, which typically require little of the agency’s staff.
Sandbrook, who was a longtime administrator at UCLA, said employees there helped accommodate location shoots as part of their routine duties and did not receive such commissions.
DeStefano also received a 10% commission from a contract between the Coliseum agency and the Hansen Beverage Co. to advertise the Monster energy drink. He was paid $41,375 under the three-year contract, which ended in 2010, according to Sandbrook.
Tool of North America and the company that produced “An American Carol,” Mpower Pictures, declined to comment on any transactions with DeStefano. Spokespersons for Reveille, which made “American Gladiators,” also would not disclose details of the company’s business with DeStefano.
DeStefano quit the commission in January after the panel’s current president, David Israel, required him to choose between his Coliseum job and his burgeoning career as a rave consultant.
By that time, his dual roles had become so intertwined that he hired his own lobbyist to push for the resumption of raves at the Coliseum, even as he advised the commission on the wisdom of such a move.
Israel said he had not known about DeStefano’s side deals.
“It ain’t gonna happen again,” he said.
Insomniac’s Electric Daisy Carnival rave was staged four times at the Coliseum, drawing about 185,000 people over two days in 2010. Last summer’s edition was marred by scores of drug-related arrests and ambulance calls. A 15-year-old girl died of an Ecstasy over-dose.
DeStefano helped oversee security and medical services for the concert, which has since moved to Las Vegas.
June 10, 2011 – Prosecutors raid homes of former Coliseum officials in ethics probe
County prosecutors have raided the homes of two former administrators for the Los Angeles Memorial Coliseum Commission, seizing computers, documents and other material in connection with a conflict-of-interest scandal surrounding the agency.
Investigators for the Los Angeles County district attorney’s office served search warrants last week at the residences of former General Manager Patrick Lynch and ex-events manager Todd DeStefano, attorneys for the two confirmed.
The early morning searches indicated that authorities had intensified a corruption investigation into dealings between DeStefano and companies that have done business with the Coliseum and companion Los Angeles Memorial Sports Arena. They also marked the first time that investigators have demonstrated a clear interest in Lynch.
An attorney for Lynch, Anthony Capozzola, said his client was not under suspicion and investigators were merely looking for information on DeStefano. He labeled the search “absolutely outrageous,” saying Lynch had done nothing wrong and was prepared to cooperate in the investigation.
“He has never been accused of one thing in his life,” Capozzola said.
Investigators briefly handcuffed DeStefano and his wife as they began the search, but Todd DeStefano’s attorney, James Blatt, said “both sides were polite and cooperative.” Blatt said DeStefano has committed no crime and had nothing to hide.
“The defense is confident that materials that the district attorney’s office will receive will exonerate Mr. DeStefano once and for all,” Blatt said.
A spokeswoman for the district attorney’s office Thursday declined to comment on the raids.
The Times reported in February that DeStefano worked on the side for a rave promoter at the same time he represented the commission in its dealings with the company. The district attorney’s office and state Fair Political Practices Commission subsequently announced investigations of the arrangement.
Lynch, who ran the Coliseum and Sports Arena for 17 years, resigned under pressure because he had approved DeStefano’s double employment. DeStefano quit the commission in January to work full-time as an event promoter.
On Thursday, The Times reported that two firms founded by DeStefano collected tens of thousands of dollars in private payments from Insomniac; a second rave promoter, Go Ventures; Hollywood production companies; and other interests that did business with the commission — all while he worked for the agency.
Blatt said DeStefano had Lynch’s permission to pursue the side ventures. Capozzola said Lynch approved only DeStefano’s relationship with Insomniac and an arrangement that paid him 10% of proceeds from production companies that shot movies, television shows and commercials on commission property.
Capozzola also said that Lynch never received any money from DeStefano’s businesses.
