By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
By Kyle Swenson
By Chris Joseph
By Michael E. Miller
When a golfer pulls up to the Orangebrook Country Club in Hollywood, he can go first class for a buck. The dollar gives him access to the preferred-parking lot, which is the closest lot to the clubhouse and comes with an attendant who dutifully ferries golf clubs to the first tee.
May not seem like much, but those extra dollars add up at Orangebrook, which is owned by the City of Hollywood. The parking attendant keeps the money carefully tucked in an envelope. On busy days there might be $70 in the envelope by dusk, when the cash is transferred to a cloth bank bag in a safe. According to Phil Szokowski, a former accountant at Orangebrook, over the course of two years about $20,000 in cash went through that cloth bag.
Szokowski says he believed the preferred-parking proceeds, as they were called, should have gone where the rest of the Orangebrook golf revenues went: to the city. That was the deal as he understood it: The city gets all revenues, pays all expenses, and collects two-thirds of the profits. The other third of the profits goes to Golf Hollywood, the management company that contracted with the city to operate the course. Because the city footed the bill for the parking attendant, it followed that the parking money should have gone to the city. But Szokowski says it didn't. Instead the money in the cloth bag was periodically emptied into the hands of David Lottes, the co-owner of Golf Hollywood.
Szokowski says he has no idea what Lottes did with the parking money. He says he only knows that it didn't show up in any Orangebrook-related account that he knew about. Szokowski felt so sure that the parking money was being misused that he quit last month and complained to the State Attorney's Office, which last Thursday completed a six-week-long investigation into the matter.
Lottes, who calls Szokowski a disgruntled employee, readily admits that the parking money never went to the city. But exactly where it went isn't clear. He says he put the parking money into one of about eight business accounts that he and his partner, Alan Weitzel, have established to run their golf companies, which manage all three of Hollywood's city-owned golf courses for a profit. Lottes -- who has been credited with revitalizing all three courses -- says he's not sure into which account he put the money. He says it might have been placed into an account set up to offset losses at Orangebrook's banquet hall, which was run independently from the city. (As part of his contract with the city, Lottes was granted use of the banquet hall rent-free.)
Lottes says he believes the money was likely listed in records as "miscellaneous income" and would therefore be difficult to pinpoint in financial ledgers. He refused to provide the New Timeswith verification that the cash was deposited and that he'd paid taxes on it.
"The bottom line is that it was deposited and reported," he says. "I'm not going to open up my books."
Christine Thrower, the city's parks director, says she clearly remembers meeting with Lottes two years ago, after he was awarded the Orangebrook contract, to discuss the parking revenues. She told him the city should get its share, because the city pays to staff the lot. She says Lottes told her that the banquet hall should get the money because the parking lot is primarily used by banquet hall customers, not golfers. Thrower says she agreed to this on the condition that the city no longer pay to staff the lot. She says she distinctly remembers that Lottes agreed that he wouldn't charge the city for the staffing. "I never gave it another thought," Thrower says.
Never, that is, until last week, when she was informed that the city had actually reimbursed Lottes for staffing the lot for the past two years. "If that is the case, then we're going to have to sit down and figure out how much [Lottes] owes the city," Thrower said. "If he was reimbursed with city money to pay for the attendant, then the revenue should also have come to the city. It's that simple."
Lottes says he doesn't recall ever discussing parking revenues or staffing with Thrower. And he says that, while some banquet hall customers do park in the lot, it is primarily used by golfers.
Strangely, after her initial outrage, Thrower apparently had a change of heart: She now says she doesn't think Lottes should be forced to pay the city back what she believes it deserves: two-thirds of the $20,000, or about $13,300. After meeting with Lottes last week, she says she believes he made an honest mistake and notes that, under a new city contract, the parking money will be deposited with the city through the year 2004. "It was wrong," she says, "but it's not happening anymore. We have resolved it."
Thrower (who will leave her post October 22 for another job) also was responsible for resolving the State Attorney's Office's investigation, according to prosecutors. During her deposition with state investigators on September 16, she said Lottes had done nothing wrong. At the time, however, she didn't know that the city was footing the bill for staffing the lot. In fact she assured prosecutors that Lottes wasn'tcharging the city for parking lot expenses, according to state records. When closing the investigation, assistant state attorney Alesh Guttmann wrote in a memo to his boss: "Because Ms. Thrower approved the way these monies were handled, criminal charges are unwarranted." When Guttmann learned last week that Thrower in fact made no such approval, he spoke with city officials and determined that "even if the expenses associated with the parking fees were charged to the city, the city does not wish to dispute the payment of these expenses," according to Guttmann's memo.