In January 2008, Larry Agran--the leader of a three-council-member, Democratic alliance that then controlled the city of Irvine for more than half a decade--desperately needed to enlist outside professional help to manage what had spiraled out of control: plans to build the Orange County Great Park, then one of California's largest public-works projects.
But there was a problem.
Agran, a career politician who had no clue how to build a massive public park despite his promises otherwise, didn't just crave a competent CEO for the $1.6 billion project. The county's living liberal icon with frightening Nixonian tendencies hoped the park would be an unbreakable monument to his legacy, so he needed someone who would obey his wishes, no matter how ridiculous or shady.
Excluding the four other elected representatives on the council, as well as the other eight members of the Great Park's Board of Directors, Agran--a losing Democratic Party presidential-primary candidate in 1992--met Mike Ellzey at an Irvine Denny's off I-5 on Sand Canyon Avenue.
Ellzey's background with private corporations, at a university and as CEO of the Golden Gate Park Concourse Authority made him a suitable candidate for the Great Park job. Demonstrating his dictatorial sensibilities that allowed him to dismiss notions of government transparency and the participation of his colleagues, Agran unilaterally offered Ellzey a taxpayer-funded job worth more than $175,000 annually.
Of course, there was a catch.
The CEO job would remain vacant. Ellzey was invited take a government post that Agran--a Chicago native--conjured up on the spot: deputy CEO. Agan wanted to see how far he could trust Irvine's newest public employee.
As I'd reported in detail for years before this secret Denny's powwow, Agran's public pronouncements about alleged strides in developing the Great Park had been a sham masking brazen corruption. Paranoid of the public learning more about his shenanigans, he nervously watched Ellzey and--apparently satisfied he could control him after about six months--elevated the outsider to the CEO post.
Yet, given this was Agran's world--a theater of endless, conniving plots that would impress Shakespeare--Ellzey quietly learned he'd become CEO of nothing. He didn't answer to the Great Park board or the City Council. He answered to Agran and two Great Park subcontractors: Arnold Forde (of Forde and Mollrich) and Yehudi Gaffen (of Gafcon Inc.), two of the Democrat's pals who've taken millions of dollars in diverted park funds for no-bid, consulting contracts.
In a sworn, June 18 deposition made public this afternoon as a result of an ongoing audit of Great Park finances and the reasons why Agran and his political allies spent $200 million with very little to show, Ellzey talks about his first realization that something was terribly wrong in Irvine.
Scanning budget items when he took the job in 2008, he saw that Forde, Agran's chief political consultant based in Newport Beach, was receiving $100,000 per month to do public relations for a park that didn't exist. Perhaps worse, the contract required nothing of Forde and Mollich. It was merely a retainer won without a single bid. The private consultants enjoyed a remarkable deal: They could stay in bed all day and still collect the public funds.
"I remember as though it was yesterday," he told Anthony R. Taylor, the private attorney representing the city in its probe of the Great Park. Shocked, Ellzey approached two veteran Great Park managers and asked, "'What is this $100,000 a month for Forde and Mollrich?' And they told me it was for public relations. And I said, 'We've got to reduce that. I mean, that's way too much. We've got to reduce that.'"
The response was memorable.
"And they literally laughed," said Ellzey. "I asked them, 'Why are you laughing?' [They replied], 'Good luck on that.'"
"I didn't know at the time, but here I was, new guy coming in, starting to make changes because it was now my shop, and one of the things I wanted to change was how could we possibly be using a $100,000 a month for public relations?" Ellzey testified. "We have to lower that. Doesn't anybody see this?"
When other experienced consultants offered to take the Forde and Mollrich monthly contract for $15,000, Ellzey tried to get Agran, Councilwoman Beth Krom--Agran's whiny, robotic sidekick on the council and park board--and Forde to downsize the deal he thought was worth no more than $25,000 per month. But even a suggestion to lower the contract to $50,000 per month met seething anger.
"And so I knew exactly how, how strong and powerful Forde and Mollrich were," Ellzey said. "How connected they were to Larry Agran and how powerful Larry Agran was as an individual, and don't even think of messing with it because you will get smothered if you even try. And so I didn't for a variety of reasons. I realized I was not powerful enough to come in, brand-new kid on the block, and mess with that contract. And so I left it alone."
It also weighed on Ellzey that, though a brilliant strategist, Forde acted like a "Mafioso" and "threatened to come after [his job]," according to the deposition transcript.
During public hearings, Ellzey says, he "was [repeatedly] put in a position of publicly justifying a $100,000 a month" deal, which he called "low points for me as a public executive."
He recalled during Taylor's inquiry, "If pressed, I could never justify that [Forde and Mollrich] brought that much value. I just couldn't do it. . . . So, somebody was making a lot of money."
Agran's Democratic machine, slyly renamed "The Great Park Team," couldn't operate in such a fashion unless the voters of Irvine ignorantly kept it in power, and Ellzey's bombshell deposition sheds new, insider light on that scam.
Instead of focusing on building the Great Park they'd promised, Agran and Forde regularly manipulated the park's budget and schedule to trick voters into a false sense of security all was well at the proposed development, though they'd failed to meet a single, significant construction milestone.
"The project team was also under extreme pressure to deliver projects in advance of Irvine's elections," testified Ellzey, who acknowledged at the outset of his deposition that he anticipates retribution for his revelations. "Project scopes were designed and scheduled to be completed in advance of the bi-annual elections, and Arnold Forde was the enforcer of these project dynamics, and Yehudi Gaffen was the implementer of the program."
The dubious election scheme had a second, self-serving component. Theoretically, the Great Park belongs to the citizens of Orange County, but Ellzey says Agran essentially raided the park's funds for his city political campaigns. Expensive, glossy, taxpayer-funded mailers touting alleged park progress were timed for distribution two months prior to crucial council elections and sent only to Irvine residents.
In comparison with Agran's electoral objectives to keep control of the city, and thus all Great Park spending, the park's professional staff and aboveboard consultants working to build the park were given "virtual irrelevance" status, Ellzey stated.
Other park spending is steeped purposefully in mystery. Observing suspicious financial irregularities, Ellzey asked government contractors to comply with the contracts and reveal expense documentation. But the contractors, all Agran buddies, replied, "Shove it," he recalled.
Ellzey specifically remembers trying to investigate an odd $3.1 million deal to see if records had been falsified. "Nothing" bothered the Great Park's professional staff more than the refusals of the contractors to "give us" payment records.
"We were essentially told--communicated to me by Arnold--to back off on that because we are just not going to get it," Ellzey testified. "And so we dropped it, and I'm not terribly proud of that."
Forde, he said, "was just a scary man."
In a second deposition released today, Marsha Burgess, formerly the city's Public Affairs manager and a Great Park staffer, admitted she had no experience auditing major government programs but was put in charge by Agran of reviewing Forde and Mollrich invoices. How thorough was she? Not once did she ever object to any payment.
Taylor asked Burgess, a reluctant witness who now works at the nonprofit Families Forward, how she verified the hours billed to the park treasury by Forde and Mollrich.
Her answer: "There was no way of verifying that."
But, in her view, the Forde and Mollrich contract "was excessive."
She told Taylor, "I though that was a lot of money," but she felt she wasn't in a position to challenge the spending because Agran "was operating under his own direction" with the aid of Forde, whom she described as "vulgar and condescending and arrogant."
Despite the glossy, half-truths and outright lies mailed to voters by Agran, a guarded Burgess testified the Great Park operation was "just chaos," though a moment later, she remembered her words would eventually become public and amended her statement.
"So 'chaotic' is probably a bit of an overstatement," she said. "But I would say that it was, there was just a lot of going on, very high expectations, very unclear roles and responsibilities, you know, things being produced quickly without--the processes seemed to--that's all I can say. . . . It was like herding cats."
The political shenanigans plus the incompetence manifested in various ways to block meaningful park construction.
For example, Ellzey recalled that Agran unilaterally came up with an idea to divert staff focus from major issues by constructing a playground. The CEO wasn't necessarily against the idea, especially for the $150,000 original price tag. But once Agran was done, the playground oozed lefty, environmental lessons and cost nearly $1.2 million--and still doesn't even have a swing set.
Agran also drew park staff away from major projects by ordering them to design a plan to fuel the carousel with energy stemming from nearby stationary bicycles.
"Larry had a lot of ideas, and some of them were great ideas," recalled Ellzey. "A lot of them were not practical or not realizable in a physical way."
Off the top of his head, Ellzey said, he could list "about a dozen" Agran spending screw-ups at the park, but Taylor redacted much of the discussion from public view in the released deposition.
Nothing supports Ellzey's assertion more than the laughable, unachievable park design that cost taxpayers more than $42 million--$42 million!--and never had a chance for implementation because Agran-approved feasibility studies had been "terrible." Ellzey called the design "a waste," noting that the elaborate concept--loaded with manmade canyons, lakes and waterfalls--was created without appreciation of financial constraints of a government operation during an economic depression.
"It just never really made a lot of sense, even though it was a very popular part of the original design," said Ellzey. "It was more of a master plan design that was magnificent as opposed to a relationship to what was constructable."
With the politicization of the park, the alarming lack of progress after years of planning and the diversion of valuable funds to what Ellzey calls "FOL"--or "Friends of Larry"--the culture of corruption and incompetence largely went unchallenged internally out of fear.
Agran declared everything was going great, and by God, nobody was going to say otherwise.
"Larry was the classic surround yourself with yes men, yes people," Ellzey testified. "And he would walk around and do a tour, and he would have an entourage of eight or 10 or 12 people with clipboards, and [they'd be] writing down notes of everything he said. And that was who he surrounded himself with."
The current audit, ordered by the city's Republican council majority of Steven Choi, Jeff Lalloway and Christina Shea, remains ongoing.
In January, an earlier limited audit found as I described in a news report: Page after page of the audit reveals how Agran, Krom and their bureaucrats shamelessly treated hundreds of millions of dollars in public funds as their own money. They repeatedly botched park planning, hid spending from other elected officials, hired cronies, doctored public records, concocted shell games, inflated sweetheart deals, lied to the public about the success of park planning and wasted tens of millions of dollars through sheer incompetence. Perhaps most troubling, they essentially used the park piggy bank as their re-election treasuries.
In Ellzey's view, the park operation was stuck in a design stage for years while Agran's contractors, despite "poor work product," continually sought ways to win new, lucrative contracts.
Agran and allies Krom and (possibly) Sukhee Kang hope Irvine's voters don't learn of their deeds and return them to power in the November elections.
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Taylor--one of the lawyers who represented Bell residents in the recovery of public funds secretly diverted to that city's council members and bureaucrats for outrageous compensation packages--is expected to issue a comprehensive report in coming months.