Culver City Is An
Ethical Desert

It is expected that there would be unanimous agreement on the importance of implementing an independently managed fraud, waste, and abuse program along with a hotline (FWA Program/Hotline). However, there is some disagreement within the Culver City community on this matter.

A report from Culver City's former Internal Auditor indicates that a significant portion of supervisors, managers, and director-level employees do not feel protected from retaliation when reporting wrongdoing. Additionally, a substantial number believe that Culver City faces a notable risk of fraud, waste, and abuse.

Culver City invested significant resources and time into developing and evaluating an effective FWA Program/Hotline. On September 9, 2019, the City Council conducted a thorough evaluation and unanimously approved an independently managed FWA Program/Hotline. Independent management is crucial to encouraging individuals to report potential issues, ensuring their concerns are taken seriously, and safeguarding their anonymity.

Unfortunately, despite the City Council's approval, the implementation of an independently managed FWA Program/Hotline was not carried out by the Staff. Instead, City Manager Nachbar, former City Attorney Schwab, and former Chief Financial Officer Onyx Jones — who could potentially be subjects of whistle-blower complaints — secretly took control of the management. The current City Council has taken no action to address this issue.

The following information describes how Culver City government lost its ethical compass. (Actually, that assumes a fact not in evidence — that it ever had an ethical compass to lose.) "Why?" is a more difficult question to answer. So far, Culver City's most detailed explanation has been "things changed."

In 2015, Culver City put out a Request for Proposals to hire an Internal Auditor and, in particular, to design an effective FWA Program/Hotline. Moss applied and won the contract. By June 30, 2017, Moss made written recommendations for an independently managed FWA Program/Hotline. The heart of the program is that the answering service receiving tips would report directly to the Internal Auditor. Culver City Staff responded: "The City is committed to fully implement a Fraud, Waste and Abuse Program per the recommendations of Moss Adams."

At the September 12, 2016 City Council meeting, members of the public requested that the City Council place the creation of an Ethics Hotline on its agenda for public discussion. They alleged that a City Council Member had improperly influenced Staff to rig a study in favor of the Council Member's constituent. The City Council neither informed the public of Moss's engagement nor placed the Ethics-Hotline topic on a future agenda. City Attorney Schwab idly sat on her hands.

The FWA-Program/Hotline project remained hidden and languished for years. On April 8, 2019, after being prodded by my wife and me, the City Council created the Ad-Hoc Subcommittee on Internal Controls and appointed Council Members Thomas Small and Fisch to expedite Staff's progress through its implementation of Moss's recommendations. The Subcommittee delegated duties to the Finance Advisory Committee (FAC).

At the June 12, 2019 FAC meeting, the FAC fully vetted the FWA Program/Hotline recommended by Moss and, by a unanimous vote, passed it on to the City Council. City Council Member Small, City Manager Nachbar, City Attorney Schwab, and Chief Financial Officer Jones attended. Small was laudatory, expressing "appreciation to the Greenbergs for their advocacy." The Minutes reflect: "acknowledgement that things need to change."

If Culver City's Internal Auditor (vis-à-vis Staff) receives tips through the hotline, Culver City has an absolute defense from disclosing the whistle-blower's identity. Otherwise, one could seek a whistle-blower's identity by serving a Public Records Act (PRA) request upon Culver City. Use of an Internal Auditor would protect Culver City from unnecessary litigation costs and absolutely protect the identity of any whistle-blower.

At the September 9, 2019 City Council Meeting, the City Council vetted and voted unanimously to accept the FWA Program/Hotline recommended by Moss. In substance, Staff reiterated: "The City is committed to fully implement a Fraud, Waste and Abuse Program per the recommendations of Moss Adams."

The next day, Moss reminded Chief Financial Officer Jones that best practices require the Internal Auditor to manage the FWA Program/Hotline.

Within days, Chief Financial Officer Jones arranged to have all FWA Program/Hotline tips forwarded only to Punit Chokshi, a Finance Department employee inexperienced in FWA-Program/Hotline matters.

Two days later, at the October 16, 2019 FAC Meeting, Chokshi announced that Culver City had entered into a contract with Lighthouse — however, he misleadingly failed to mention Staff's secret switcheroo that put him in command of the FWA Program/Hotline and cut out the Internal Auditor.

On October 19, 2019, still unaware of Staff's switcheroo, I informed Chief Financial Officer Jones of material problems with Culver City's newly-minted FWA website, and offered to meet in person to discuss them. No one responded. My letter stated, in part:

On March 22, 2021, Culver City implemented a FWA Program/Hotline that has raised concerns regarding its effectiveness. Some stakeholders believe that the program was inadequately designed, potentially misrepresenting the level of security provided to residents.

Culver City has issued approximately 85 credit cards to its approximately 650 employees. Culver City City Council Policy No. 4209 (5/13/13) sets forth the do's and don'ts associated with using credit cards issued to employees. Policy No. 4209 states, in part: "The PCard is intended for low value purchases (generally under $500.00 for the total order including sales tax and shipping) that meet the requirements for approved purchases." Culver City employees have ignored that purpose. Further, no one is watching the store. After all, it is only other peoples' money.

In early 2019, the City Council was informed of Culver City's PCard problem.

The City Council gave the appearance that it was listening.

But the runaway cost of seminars and training sessions that did not produce one idea to benefit Culver City was another clue as to the depth of the problem.

Follow-up research demonstrated that the PCard problem had not abated.

Subcommittee co-Chairpersons Small and Fisch and then Mayor Sahli-Wells were advised of the continuing problem. No one responded.

The Finance Advisory Committee washed its hands of the matter by claiming that its job is not to determine the merits of a matter.

Years ago, City Attorney Carol Schwab publicly informed the City Council that she does not determine whether a City Council Member is biased or has a conflict-of-interest. The May 27, 2014 City Council Meeting Minutes state, in part: "Carol Schwab, City Attorney, discussed instances where a conflict of interest arises; the appearance of bias; and she clarified that it is up to the individual Councilmember to make the decision."

Council Member Small publicly announced that he: (1) would not seek a second term; (2) had opened up shop as the Chief Executive Officer of Culver City Forward; and (3) would move on from the City Council after his term expires in November. His statements led to a first article concerning his probable conflicts of interest.

An anonymous tipster suggested looking into an alleged "Small-Hackman" relationship. A cursory investigation led to a second article, which sets forth details of the relationships and their ramifications. Michael Hackman and related entities have large real-estate interests in Culver City.

A copy of that second article was promptly emailed to the City Council. No City Council Member responded.

The Culver City Cross Roads recently interviewed Small. He spoke of his relationships with Hackman Capital Partners, LLP (Hackman) and Culver City Forward, and his "extensive discussions" with City Attorney Schwab and City Manager Nachbar.

Hackman does much business in Culver City.

Culver City has a conflict-of-interest policy against gifts in excess of $25 to Council Members.

Hackman's General Counsel incorporated Culver City Forward and caused other legal work to be done on its behalf, e.g., he requested that the IRS grant Culver City Forward tax-exempt status.

According to the IRS, "An exempt organization must make available for public inspection its exemption application. … In addition, an exempt organization must make available for public inspection and copying its annual return." (Emphasis added.) Culver City Forward and its representatives have ignored multiple requests for this information. A Freedom of Information Act request has been filed with the Internal Revenue Service.

CCF's 2019 Form 990 reveals: from March 2019, CCF had only one employee — Chief Executive Officer Small — who supposedly worked 40 hours per week for CCF, receiving benefits of $84,973 (averaging about $8,500 per month). CCF took in exactly $300,000. (Consistent with one giant tax-deductible contribution by Hackman.) CCF paid no rent but had total expenses of $138,037, even though CCF was still "in the process of forming." Schedule B identifies "contributors" and amounts contributed as "RESTRICTED." Worst of all, CCF expended nothing directly to benefit those who are not able to care for themselves.

The search for truth and justice continues. What did: (1) City Attorney Schwab; (2) City Manager Nachbar; and (3) fellow City Council Members know, and when did they know it? Did City Attorney Schwab and/or City Manager Nachbar grant a special dispensation to Small? We learned that, on September 24, 2019, the City Attorney, the City Manager and Council Member Small met to discuss potential conflicts of interest.

The City Attorney revealed another method by which she hinders objective-independent investigations. In addition to representing Culver City, she made Small her "client." Attorneys run into ethical problems investigating their "clients" or former "clients."

A second supplemental and broader request for an independent investigation of the Hackman-CCF-Small relationship has been filed with the City Attorney.

According to Hackman's April 20, 2018 publication, "[w]ith his architectural background, Small worked on the plan [for Culver Studios] for two years, helping to integrate the architecture from the old stages." Questions arise: In what capacity did Small "work"? Was Small paid by Hackman for that "work"?

It appears that Hackman's political contributions continue to influence additional City Council Members, who appear to be blind to the conflict-of-interest concept.

Using questionable tactics, Culver City business interests converted residents' protected parking area to their parking lot. Culver City government has no shame — it's business as usual.

Grace Evangelical Lutheran Church enlisted the help of a City Council Member to revoke its neighbors' protective-parking restrictions. Council Member Andrew Weissman had both an undisclosed social and business relationship with a Church VIP.

Years before, the City permitted the Church to build without providing for any on-site parking. The Church morphed into a business. It rented its membership-dwindling facility to other organizations and to other churches.

Residents easily demonstrated that arguments by the Church's few supporters were without merit.

Some Council Members accused the residents of underhandedly opposing their favorite City-Council candidates. One besmirched the residents on a private-media website managed by another Church VIP (Dan O'Brien), and encouraged others to do so. The Chamber of Commerce put in its two cents.

After extensive due diligence, the residents presented irrefutable documentary evidence of the aforesaid biases and shenanigans to the City Council and to the City Attorney. Both yawned. Culver City is an ethical desert.

Most information about related litigation and settlements has been omitted. Some articles have been redacted. None of which modifies the material underlying facts.

Culver City residents recognize and appreciate services provided by the Culver City Police Department (CCPD). However, that does not mean that residents unthinkingly support the purchase of every toy CCPD wants in its arsenal. Taxpayers' money is tight, and there are alternatives competing for it.

It appears that the CCPD anticipates an invasion by the Symbionese Liberation Army or some similar group.

The City Council declined to authorize the purchase of a pig-in-a-poke.

Discussion at the Culver City Senior Center demonstrated that fear is a potent motivator.

It might be hard for proponents of CCPD's purposed purchase of a BearCat to acknowledge the obvious: BearCats — no matter how fearsome — do NOT prevent emergencies, but respond AFTER an emergency occurs.