LA County Fair Lined Executives' Pockets While Stiffing Taxpayers: Report

LOS ANGELES, CA- State and county audits have found that taxpayers have been denied millions of dollars in revenue from the Los Angeles County Fair Association because the private nonprofit did not pay enough rent for the publicly owned land it operates on, even as it granted its executives rich compensation packages, it was reported Friday.

The separate, critical reviews determined that the county has been losing as much as $1 million a year in unpaid rent from a hotel and conference center and other enterprises the nonprofit association runs at the Fairplex property in Pomona, the Los Angeles Times reported.

A spokeswoman for the fair disputed the state audit findings, citing a series of county audits that found the fair in compliance with its rent agreement.

"In fact, the county audited LACFA seven times between 2000 and 2011 and in every instance, those audits concluded that LACFA fully complied with its obligations to pay rent under the agreement, including lease calculations pertaining to the hotel," fair officials said in an email to Patch.com. "As for the State audit on this issue, we are at a loss to understand why the State Auditor would take it upon itself to re-interpret the terms and practices of a 28-year-old lease agreement between the County and LACFA. As the County’s audit noted, the current interpretation of the lease has been clear and consistent since 1992, through seven audits, and with the written confirmation of the-then CAO and County Counsel in 2006. The State Auditor’s attempt to re-interpret the lease at this point is not only wrong-headed, but grossly unfair to County as well as the Fair."

The state auditors, however, said the county, which leases the land to the association, should seek payment of back rent from the organization. State auditors said the county likely gave up more than $6 million in total rent that it should have received since 2005 under a lease agreement approved by the Los Angeles County Board of Supervisors.

``Failure to collect all rent due under the terms of the lease allowed the association to retain revenue it otherwise would have owed the county and thus potentially contributed to the association's ability to pay its executives such high salaries, the state audit found, according to The Times.

Both audits grew out of a Times investigation last year that reported the association had paid its executives far more than other fair managers in California earn, while showing annual losses on its federal tax returns and drifting from its mission to promote local agriculture.

City News Service; Photo: TheRealThummer via wikimedia commons