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Tax records reveal DCA corruption & who cashed in big at the California State Athletic Commission

By Zach Arnold | July 23, 2012

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DOWNLOADABLE/PRINTABLE PDF VERSION (27 pages)

As we laid out in our June 16th budget analysis of exploding inspector & in-state travel costs at the California State Athletic Commission, we didn’t have any names initially to connect to the murky data on the spreadsheets. All we knew is that somebody was getting paid a lot of money on the taxpayer’s dime to work shows.

Then, we discovered that a significant reason for costs being so high was due to the fact that those who benefited the most were also full-time state employees during the day. The reason this was important to note is because full-time state employees get paid time-and-a-half when working as inspectors at CSAC. The time-and-a-half is based on what salary is higher: your day job salary x 1.5 or regular CSAC salary (around $30/hour) x 1.5. If your day job pays $40 an hour, suddenly working as a CSAC inspector meant you were getting paid $60/hour for salary. On top of that, the state employees got all sorts of travel benefits including airplane tickets, Cadillac Escalade car rentals, meal money, and other goodies. The end result is that you had figures such as $729,000 and $668,000 a year for inspector salary costs, while in-state travel was well into the hundreds of thousands of dollars per year.

The reason these costs raised so many eyebrows amongst those who work at other state athletic commissions in America is because most inspectors are paid a flat fee to work a show, usually a few hundred dollars at most. Forget benefits like getting your travel costs getting picked up by the taxpayer, too. Inspectors in Nevada & New Jersey were flabbergasted to see just how much money was being dished out in California.

The apex of the civil war between the lowly California State Athletic Commission and the politicians at the Department of Consumer Affairs, which controls CSAC, was on June 26th in El Monte, California when DCA sent a dozen officials to get George Dodd terminated as Executive Director of CSAC. As we previously reported, there was allegedly pressure from the state Senate’s Rules Committee via Governor Jerry Brown’s office to commissioners at CSAC to either fire Dodd or else have their one-year appointments expire. Linda Forster, Brian Edwards, and Mike Munoz were all appointed by Governor Brown to CSAC last year. They are all gone from CSAC a year later. CSAC voted to censure, but not fire Dodd. This drove DCA crazy and they were determined to make life hell for those working at CSAC, including ambush fake 9 AM emergency meetings to get a loan from the state’s General Fund.

A loan? For an athletic commission? The truth is that CSAC didn’t need a loan. Yes, there was a money crunch, but the commission simply needed to adjust their budgeting costs for inspectors and in-state travel. A few adjustments would have immediately raised revenues at CSAC and nobody would have complained. George Dodd asked DCA to tell the public that, no, CSAC was not in the red by $35,000 and that there was still money left in the bank account. DCA allegedly wouldn’t acknowledge this, as it would have made getting a loan for CSAC more difficult. Even after George Dodd’s resignation last Monday from CSAC, DCA press flacks sent out e-mail talking points to The LA Times, other newspapers, and members of the MMA media. Virtually no one challenged their claim that CSAC was in the red by $35,000 and that CSAC would be in the red by $700,000 at the end of the 2012-2013 Fiscal Year. The $700,000-in-the-red claim was absolutely absurd to make because it was propaganda by DCA from their insolvency letter which claimed that spending would stay static… despite the fact that everyone at CSAC said it would not.

Put the actions of DCA into context. This is a government behemoth that gets hundreds of millions of California taxpayer dollars each year. There is a level of paranoia at Sacramento HQ that is pungent. When trouble happens at one board or agency, DCA management simply shifts those employees around to other agencies in order to keep individuals on the payroll. There are employees at DCA who got sued for sexual harassment, resulting in the agency using taxpayer dollars to pay out enormous legal settlements. And, yet, those employees still hang around at DCA today while George Dodd, who got paid $88,000 as head of CSAC, was bum-rushed out of the commission despite the fact that DCA hand-picked him from Seattle just a couple of years ago.

I am not an apologist for George Dodd. You’ve never heard me make any comments judging his level of competency to try to cover for the mistakes he has made. Others can do that. However, the fact is that the media has devoured the talking points from Consumer Affairs that Dodd is individually responsible for the chaos at CSAC. It’s a scam. Don’t hate the player, hate the game. Our focus in our investigation at CSAC has been all about the antics of politicians at Consumer Affairs who have turned a lowly athletic commission into a high-stakes political circus revealing fingerprints from the biggest names in California politics. Why a board like the California State Athletic Commission, which generates $1.3M in revenue, has attracted so much attention from so many powerful politicians is beyond logic. As Jordan Breen detailed on Sherdog Radio a few weeks ago, DCA became paranoid about CSAC because CSAC is simply a dumping & transfer ground for other employees at various DCA boards. It’s simply a mechanism to keep individuals in Sacramento so that they can draw paychecks.

The old adage follow the money always applies to these kinds of stories, so that’s exactly what we did. We decided to go through the publicly-disclosed tax records of officials at the Department of Consumer Affairs to find out what has been going on. Where did the money at CSAC go? Who benefited the most? Why were certainly individuals paid more than others? Why is top management at DCA always so involved in the activity at CSAC?

What we discovered provides more pieces of the on-going puzzle.

Key background information

The Department of Consumer Affairs, as of 2011, had around 4,000 employees under their umbrella in Sacramento. Nearly 900 of them make more than $60,000 and around 1,500 make over $50,000. The upper echelon class, starting at $70,000 and above, is loaded with people classified as project managers or investigators. I’d hazard to say that up to a quarter of the DCA workforce falls into these categories. By general estimates, DCA deals with a tens, if not hundreds of millions of dollars worth of California taxpayer dollars. They have more boards & bureaus than you can shake a stick at. There are so many boards, most people at the agency can’t keep up with the activity at every single agency.

Which is why the particular focus by so many bureaucrats & politicians in Sacramento towards a lowly athletic commission that generated $1.3M USD in the last Fiscal Year is even more of a mystery.

There are a tremendous amount of bureaucrats at DCA that are political fixers. The sole job of these fixers is to shift around employees from one department to another based on budgeting issues or if political & liability problems arise. It’s a shell game. Once you get your feet inside DCA, it’s like a vortex that sucks you in. As long as you play the political game right, you can easily get decades of employment in Sacramento.

The surprise DCA dropped on George Dodd’s lap

George Dodd was hand-picked by Brian Stiger, then a top bureaucrat at DCA, to take over as Executive Director of the California State Athletic Commission in 2010. George is from Seattle, so he’s not exactly a creature of the Sacramento clan. He didn’t know what the politics at DCA were all about. That’s how DCA wanted it to be. They wanted full control over him and of CSAC.

As we went through the tax records of the Department of Consumer Affairs in 2011, we noticed some very unusual filings. In 2011, DCA paid money out to 51 different people for athletic inspector work at CSAC. The payouts widely vary, but there was a curious trend at the top of the pay scale. We noticed that there were several inspectors who got inflated payments in 2011 despite the fact that they either aren’t working now or weren’t working in the past but only started working again.

The secret? Political sabotage and incompetence by the Department of Consumer Affairs towards various athletic inspectors. Between issues regarding back pay owed to inspectors along with claims filed with the Equal Employment Opportunity Commission (EEOC), all of a sudden inspectors that hadn’t been getting paid or getting event bookings started seeing some money come their way. The result? DCA threw a stink bomb George Dodd’s way on the balance sheet and resulted in extra inspector salary costs. Keep in mind, some of the inspectors in question were around before George Dodd became the Executive Director. In other words, he had nothing to do with DCA’s political decisions and yet they threw these inflated salaries his way and had him try to manage the situation.

Potential motivation for Denise Brown’s desire to fire George Dodd

Put yourself in the shoes of one Denise Brown, the person appointed by Governor Jerry Brown last January to take over as the top boss at the Department of Consumer Affairs. You’ve been working at DCA since the days of the Jimmy Carter administration. You’ve gone in-and-out of various bureaus, from cosmetology to CARB (California Air Resources Board). You’ve had years where you made peanuts and other years where you drew a 6-figure paycheck. Governor Brown really, really wants you as the head of DCA. Although he appointed you to the top position at DCA, you have to be confirmed by the state Senate’s Rules Committee. If they don’t go along with your confirmation, your career is finished.

Here’s a layout of Denise Brown’s work history at Consumer Affairs:

Brown was an advisor to the executive officer and staff of the California Air Resources Board from 2009 to 2011. She served in the Department of Consumer Affairs in multiple positions from 1977 to 2009, including chief deputy director. Brown was chief deputy registrar at the Contractors State License Board from 2004 to 2009, chief deputy director at the Department of Consumer Affairs from 1999 to 2004 and a program administrator at the California Architects Board from 1998 to 1999.

She worked in multiple positions at the California State Board of Barbering and Cosmetology from 1994 to 1998 and from 1987 to 1991, including executive officer of the board. She was deputy chief of the Division of Consumer Affairs from 1981 to 1983 and a legislative aide from 1977 to 1981. This position requires Senate confirmation and the compensation is $144,504. Brown is a Democrat.

Two factors to consider here: a) The recent payouts from DCA to Denise Brown & b) how much she stands to make as DCA’s #1. The answer to point A is right below in graphic form. The answer to point B is: potentially over $200,000 a year plus benefits.

Tax data: 2007 -> 2009 -> 2010 -> 2011

With so much money the line, George Dodd & CSAC proved to be an easy whack-a-mole for Brown to make an example out of and show to the players in the state Senate’s Rule Committee that she would rule DCA with an iron fist. At the July 2nd SRC meeting, they believed her. The rest is history.

A Preamble (of sorts) about the tax records for athletic inspectors

We are going to list the tax data of the inspectors here for you to look at. Some qualifiers should be noted. First, we’re not going to break down each individual listed. We simply can’t and won’t. We’re not going to label every individual a good person or a bad person. Certainly, we will do that for some of the individuals listed in order to give you more pieces of this on-going puzzle as to why the Department of Consumer Affairs is so invested in what happens at CSAC.

About half of the inspectors listed on the 2011 tax records are, in fact, full-time state employees in California. It’s important to note this because full-time state employees who work as inspectors get paid time-and-a-half (1.5 times their day job hourly rate or inspector rate, whichever is higher) plus all the travel benefits. We don’t have the time sheets for all the inspectors in front of us, so we can’t match up salary totals with hours claimed. We also don’t have the individual travel claim sheets for the inspectors, either. So, what we are going with here for data is the salary totals listed along with any state employment connections.

I think that the tax data along with the state employment connections will reveal some interesting developments that will warrant further investigation in the future.

A look at who cashed in big at CSAC and who is most favored by DCA

1. Ernest Che Guevara – $59,913

Che Guevara earned the job title of Chief Athletic Inspector at CSAC under a cloud of controversy. He was the inspector who failed to detect the illegal hand wraps that Antonio Margarito had on his hands when he was going to fight Shane Mosley. If it wasn’t for Nazim Richardson pointing out what was going on, a tragedy could have happened in the ring. Dean Lohuis, who was the Chief Athletic Inspector at the time, along with inspector Mike Bray, were called in and handled the situation.

When Margarito was called in to discuss the matter in front of the commission, sketchy California Deputy Attorney General Karen Chappelle prepared her case with Che Guevara and sided with Che’s recollection of events. When it came time for testimony, what Che said was different than what Mike Bray had to say.

The truth is that there was no need for any sort of elaborate plan to suspend Margarito and his trainer. The evidence was there for everyone to see. Instead, Karen Chappelle turned the situation into a mess. Remember, she’s the same attorney who signed off on millions of dollars of tax breaks for The Contender and Next Great Champ reality boxing TV shows. The lack of incoming revenue resulted in CSAC having to get a $320,000 loan. Chappelle is the same attorney who had her credibility attacked by a judge over an arbitration proceeding involving boxer Robert Guerrero and promoters Goossen-Tutor & Golden Boy. The judge said that the decision supervised by Chappelle “was procured by corruption, fraud or other undue means.”

Instead of siding with Lohuis & Bray, Chappelle sided with Che Guevara. The end result? The Department of Consumer Affairs personally and professionally destroyed Dean Lohuis. His career as Chief Athletic Inspector was finished. Guess who got that job? Che Guevara, the man who missed the illegal Margarito hand wraps. And what about Mike Bray, the other competent inspector in the case? The tax records tell you everything you need to know.

Bray was getting work as a regular inspector at CSAC. Then the Margarito incident happened. Instead of continuing to work and being acknowledged for doing his job right, Mike Bray became a victim of retaliation by the Department of Consumer Affairs. They stopped booking him for shows after the Margarito testimony. Just like the way DCA destroyed Dean Lohuis and effectively ended his career, they pulled the same stunt on Mike Bray. Che Guevara, for his incompetence, got Dean’s job and Karen Chappelle continues to make big cash at the California DOJ despite her terrible track record in CSAC affairs.

If you think the size of Karen Chappelle’s paychecks is sickening, you should see how much DCA lawyers make. Hint: Outside of the younger lawyers on staff, they’re all making anywhere from $100,000 to $130,000 a year.

DCA destroyed the careers of Dean Lohuis and Mike Bray. They have a unit, the Department of Investigation, that regularly confiscates computer equipment and harasses employees. You can only imagine the kinds of tactics DCA has used against George Dodd that we don’t know about yet (publicly). Their behavior is disgraceful.

2. Dean Lohuis – $50,040

After having his career destroyed by DCA a few years ago, mysteriously this new figure popped up in 2011. A payment of $50,000. Make of it what you will.

Just remember, this inspector salary cost was dumped onto George Dodd’s lap for budgeting matters. Things were messy enough at CSAC for budgeting, but to throw extra salaries onto the balance sheet like this made George’s job more difficult. Since he wasn’t around as Executive Director when DCA pulled their stunt on Dean, George wouldn’t have seen this development coming his way.

As you’ll notice with the Boxrec report, Dean worked a couple of months more after the Margarito incident… and then DCA pulled the plug on him and Mike Bray.

3. Sid Segovia – $41,238

He’s technically someone who has only a high school diploma and isn’t a full-time state employee. And, yet, he’s managed to significantly increase how much he has made each year as an inspector at CSAC while revenues at the commission were stagnant or declining.

Given that he’s not technically a full-time state employee, this would mean that his hourly wage as inspector would be somewhere in the $35-40/hour or so range. Take 2011 for example. $41,000 was paid out to him. Divide that by $35 and you get 1,171 billable hours. That means, under our hypothetical, that he was billing CSAC for approximate 20-22 hours worth of pay each week.

If that doesn’t raise an eyebrow for you, perhaps this picture and the circumstances surrounding it might do the trick.

4. Mohammad Noor – $34,458

No one has cashed in more as a CSAC inspector over the last five years than Mo Noor. He’s a favorite at DCA HQ, too. Since he’s a full-time state employee at the Department of Finance, he gets the 1.5 times salary rate plus perks.

Look at the 2009 tax data. Mo Noor made more money as an athletic inspector than he made at his day job. Over the last five years as a CSAC inspector, Noor has made nearly $180,000.

5. Larry Ervin – $31,353

Like fellow Southern California CSAC inspector Mo Noor, Larry Ervin has made his own little fortune on the taxpayer’s dime — to the tune of over $160,000 over the last five years.

6. Mark Relyea – $20,065

When I was referring to payments ballooning, here’s a perfect example. Mark Relyea, who worked as an LA County Sheriff, has a good reputation in terms of his overall inspector performance. And, yet, this $20,000 got dumped onto George Dodd’s lap in 2011 for budgeting.

7. Sarah Waklee – $19,860

As you can see here with the numbers, for some inspectors the amount of money they make working at CSAC is equal to at least half of what they make during their day job.

8. Joe Ulrey – $19,522

See the ballooning payment in 2011? You can thank DCA for their mistreatment of people for this happening. And yet they want everyone to believe that this was George Dodd’s doing.

9. Dave Rasmussen – $18,762

10. Richard Estrada – $18,406

11. Roy Farhi – $16,809

Look at how the good times were rolling in 2009. These inspector costs exploded during the end of Armando Garcia’s tenure and during the tenure of Bill Douglas & Dave Thornton.

12. Jim Russell – $16,669

13. Raul Oseguera – $15,101

14. Michael Guzman – $14,360

15. Brandon Saucedo – $14,312

16. Valerie Douglas – $14,152

17. Bruce Rasmussen – $13,462

18. Brett Correia – $12,941

19. Frank Munoz – $12,618

This gets an honorable mention because Frank was around at CSAC during the end of the Armando days and when Bill Douglas was around. Bill Douglas got a lateral transfer from CSAC to the Pest Control Board after Dean Lohuis got trashed by DCA. Frank ended up transferring to where Bill works.

As I went through the DCA tax records, you notice a lot of this kind of activity happening where the bureau/political managers like Gil De Luna (who was a “CSAC manager” after the exodus of Armando & when Dave Thornton was around) help certain protected species maintain work in a different department.

20. Brian Morris- $12,137

Brian works/worked as a facility captain at the correctional institution (corrections & rehabilitation). Some years, he made a 6-figure salary at corrections.

21. Joe Guevara – $9,792

An honorable mention here because Che knows Uncle Joe well.

22. Nate Arnold – $9,566

Nate’s day job with the state is being a Fish and Game captain.

23. Burton Alejandre – $9,290

24. Anthony Olivas – $8,492

Anthony’s day job with the state is for DCA as a class Inspector I.

25. Nichole Bowles – $8,284

26. Ty Trimm – $6,901

27. Carlos Moreno – $6,621

Carlos has a day job with the state for the DMV as an investigator.

28. Dan Powers – $6,448

Dan’s day job with the state is as a supervising investigator at DMV.

29. Kurt Larson – $6,076

Kurt’s day job is being a correctional officer.

Inspectors who made less than $6,000 in 2011

30. Brad Ehrman – $5,986

31. Tim Huff – $5,960

Tim’s day job is working as an investigator for DMV.

32. David Pereda – $5,666

33. Gil Urbano – $5,163

34. Dwayne Woodard – $4,708

35. Monica Larson – $4,088

Monica’s day job for the state is working as a correctional officer.

36. JD Foreman – $3,989

37. Armando Gutierrez – $3,894

38. Frank Gonzales Jr. – $3,729

Frank’s day job is as a program representative at DCA.

39. Brian O’Hara – $3,600

Brian’s day job for the state is working as a staff services manager at the Toxic Substances Control bureau. In 2009, he made $7,476 as an inspector. The Dave Thornton era at CSAC proved to be very lucrative for many people.

40. Mike Figueroa – $3,518

41. Raymond Villalva – $3,372

Raymond’s day job for the state is as a correctional counselor. In 2009 (second year as an athletic inspector), he made $14,151.

42. Kevin Highbaugh – $3,291

43. Rick Davis – $3,182

44. Danny Cruz – $2,949

Danny’s day job is working for the Employment Development Department.

45. Jeff Ervin – $2,599

46. Christopher Guzman – $1,896

47. Erin Brown – $1,048

48. Mike Bray – $994

49. Richard Novoa (deceased) – $909

50. Rena Lopez – $268

Rena worked as an investigator for DMV.

51. Peter Arnold – $175

Conclusion

The grand total of salaries paid out by DCA in 2011 was $598,632. These numbers reflect a typical calendar year from January 1st to December 31st. However, the state’s Fiscal Years start July 1st and end on June 30th, so the data presented here won’t necessarily match up with what is listed on their spreadsheets.

Topics: Boxing, CSAC, Media, MMA, Zach Arnold | 16 Comments » | Permalink | Trackback |

16 Responses to “Tax records reveal DCA corruption & who cashed in big at the California State Athletic Commission”

  1. Steve says:

    Nice job. Look deeper into Bill Douglas.

  2. KBY says:

    great work, Zach. Hopefully other media outlets will pick up on this continuing story, instead of doing their usual pro-Zuffa propaganda pieces.

  3. Jonathan Snowden says:

    “If you think the size of Karen Chappelle’s paychecks is sickening, you should see how much DCA lawyers make. Hint: Outside of the younger lawyers on staff, they’re all making anywhere from $100,000 to $130,000 a year.”

    Wait, are you suggesting that this is actually good money for an experienced attorney? I couldn’t live in California with my family for that.

    • Tomer says:

      Yeah, I’m not in CA but I know a few graduates from Cardozo and Fordham here in NY (which are decent schools but not T-14) that made ~$150,000 coming out of law school at big law firms. While $100,000 is a big income in general that puts you in the top quintile of income (around the Top 15% if that’s for a household and Top 5% if it’s individual), it’s not large by legal profession standards.

      • The Gaijin says:

        I’m not in CA either, so I don’t purport to know how the government/agencies run out there, but just curious if you know any friends that scored legal jobs with government agencies? Because from my understanding they’re typically pulling in a heck of a lot less than what people pull in at white shoe firms/big law in general.

        I think on the whole pulling in $130k at a government agency is considered a pretty cushy gig.

        • Tomer says:

          That was the point of my post and (I think) Jonathan’s post – $130,000 is pretty high for a governmental agency but not particularly high overall (yet not as terrible as a number of attorneys I know that basically are glorfied collaters pulling barely above minimum wage at private firms). It’s not a bad salary (although from what I remember governmental agencies have pay ranges based on your pay grade so that’s probably at the top of the heap (executive level) and most governmental workers tend to make less than that).

        • The Gaijin says:

          I hear ya. But considering that big law is incredibly stressful and grinding and most associates are out after 2-3 years, having a gov’t gig pulling in 100-130k and probably working a somewhat 9-5 sched probably ain’t so bad in the long run. That said, the people pulling that probably stuck around a few years and politicked their way around.

  4. Jonathan Snowden says:

    What is this info dump supposed to tell us?

    Some people are paid more than others? Likely due to working more?

    I don’t understand what the scandal is supposed to be. Can you break it down?

  5. Eric says:

    The salary of Karen Chappelle is modest. Look around California and you will find many public employees making way more than that.
    A. Bell City Scandal
    B. http://www.sacbee.com/2011/03/03/3446569/see-average-police-firefighter.html
    C. Nurses, http://www.huffingtonpost.com/2011/10/27/jean-keller-prison-nurse-nets-270000-overtime-pay_n_1035372.html

  6. Joe Ulrey says:

    I would suggest that when you refer to “ballooning” due to mismanagement and “mistreatment of people” that a more intelligent approach may be to evaluate employees by the actual hours that they were and the proximity of the venues that they traveled to from their homes.

    If you find that in actuality lower paid inspectors (non state employees) who live closer to the venues where they work are working more events, I believe this is better management, not “ballooning”.

    If California is going to “right the ship” the effective way to do this is to use less expensive inspectors who work close to where they live.

    I would also suggest that you go a little further back in time with your research and compare the hourly pay and distance travelled under Mr. Douglas and Mr. Garcia where “A Teams” were established and they would work local venues regardless of the distance traveled and cost to the taxpayers. You should also question why local inspectors were not used instead. This unfortunately established a precedent that George Dodd inherited.

    It may be creative to “take a snapshot and print assumptions” but
    I ask that you look a little more in depth and evaluate compensation per hour worked and DISTANCE TRAVELLED to work at a venue. Again, please go back a few more years and evaluate as well

    • Zach Arnold says:

      The Preamble part of our article pretty much addressed why these issues weren’t covered here. I suspect you will see data on these matters in the future.

  7. Thank you very much for this article. It really appears to be a major mess unfolding within DCA, CSAC. I must admit that all of my dealings with Mr. George Dodd as a promoter, have been highly professional and attentive. He always struck me as an individual working hard to do his job, balance his responsibilities. I am of hope, things are resolved soon.

  8. […] Tax records reveal DCA corruption & who cashed in big at the California State Athletic Commissi… (July 23rd, 2012) […]

  9. […] Tax records reveal DCA corruption & who cashed in big at the California State Athletic Commissi… (July 23rd, 2012) […]

  10. […] was a prime target for DCA’s u-turn and sabotage attempt because he was the highest paid athletic inspector in the state for years. Our tax records proved it. A few years ago, he made more money as an athletic inspector […]

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