Ex city controller says city of Oakland fired her for whistle

0 Comments | Oakland Tribune, Mar 19, 2008 | by Kelly Rayburn

OAKLAND _ Former city Controller LaRae Brown has sued the city, saying she lost her job after trying to blow the whistle on woeful financial practices at City Hall.

Brown left city government in March 2007. Her lawsuit, filed this week, alleges the city overstated its cash balance by $172 million in September 2006 and that City Administrator Deborah Edgerly and others concealed the true state of Oakland's finances.

Edgerly strongly denied Brown's allegations.

The former controller was terminated four days before a scheduled meeting with city Auditor Courtney Ruby and a team of outside auditors, the lawsuit says.

``Our issue was she had been complaining for a while about some of these issues in the city,'' said attorney John Burris, who is representing Brown, ``and that at the end of the day, when she was about to have a conversation about it with the auditor, she was terminated and forbidden from talking to the auditor.''

The lawsuit seeks $1.5 million in general damages as well as other penalties, including unspecified punitive damages against Edgerly and other city officials.

Edgerly said it is ``really scary'' that someone who had such a bad understanding of the city's finances could have served as controller, which Edgerly described as the city's top accountant.

Asked about the $172 million, Edgerly said, ``That's emphatically incorrect. I believe she did bring that up to (Finance Director Bill Noland) in 2006 and Bill walked her through the financial statements. Even her assistant controller, who understood the books, knew it wasn't true. And Bill knew it wasn't true.''

Edgerly said that had there been anything wrong, outside financial auditors the city hires every year would have found it. They didn't, she said.

She also said neither her nor Noland knew Brown was meeting with Ruby.

``No one on the city side had any knowledge that she was scheduled to talk to the (auditors),'' Edgerly said. ``I don't know how that could be the reason for her leaving the city. None of us even knew.''

Ruby declined to comment for this story. When Brown left the city, Ruby's office was working on an audit of the city's payroll function.

Brown's lawsuit comes as the city grapples with a budget crisis. City staff is working to cut $9 million out of this year's spending plan _ and that's just the beginning. Oakland is looking at a $30 million budget hole for the 2008-2009 fiscal year, possibly more.

Brown was hired as controller in July 2004. The lawsuit describes a pattern of uncovering faulty financial practices and being stonewalled when trying to alert superiors.

At one point in March 2007, according to the lawsuit, Brown told Noland that the city would not even be able to make payroll except for its reliance on bond money. Noland responded, the lawsuit said, by saying he planned to retire in two years _ and that he hoped the money didn't run out before then.

Noland did not return a phone call seeking comment.

Edgerly said if the city was truthfully dealing with the financial problems Brown described, then it was Brown's job to address them.

``All these things that she complained about, it was her job to fix,'' Edgerly said. ``That's what our controller does. Our controller's charged with keeping our books. All these things that she complained to Bill about, if they were true _ and they weren't _ it was her job to fix them.''

City Attorney John Russo said his office had not yet been served with the lawsuit and could not comment.

Contact Kelly Rayburn at (510) 208-6435 or krayburn@bayareanewsgroup.com. Read CityWise in Metro on Fridays.