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 Times with 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't charging 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.
While Guttmann won't be filing criminal charges, Szokowski remains outraged. He says he plans to push for more investigations.
Given his vehemence, why did it take him two years before he finally quit and complained? Szokowski says one reason was that, as an avid golfer, he loved working at Orangebrook. But the main reason, he says, was that he was becoming worried that he might be blamed if an external audit uncovered the alleged misappropriation. He says it's against the law for any company to mismatch expenses and revenues -- which is exactly what he believes was happening with the parking funds. "Lottes is always talking about customer service," says Szokowski, "but here he was servicing his own pocket while he was charging the city."
Szokowski suspects Lottes pocketed the money himself but admits he has no proof. He claims Lottes often picked up the parking money just before going on vacations, like a cruise with his parents or a trip to Mexico with Alan Koslow, an influential lobbyist around city hall. Koslow is also Lottes' lawyer and the corporate agent for Golf Hollywood.
Lottes says it's absolutely ludicrous to suggest that he spent the cash out of pocket. He refused to respond to questions about this claim except to note that he has taken several trips with Koslow, none of them paid for with parking money.
To be sure, Lottes would seem to be making enough money to afford a few vacations. In addition to Orangebrook, which paid him and his partner together more than $100,000 last year, he also has contracts to run Hollywood's two other municipal courses, Hollywood Beach and Eco. Lottes has been widely credited with making Hollywood's golf courses profitable after years of financial failure. All told, the three golf clubs produce some $4 million in revenues.
But success hasn't kept him out of controversy's way. A small group of detractors led by Hollywood activist Howard Sher has long complained about Lottes. They claim he's become Hollywood's golf king through the use of generous campaign contributions to city commissioners and by hiring the influential Koslow. Lottes says the key to his success is simply that he's done a great job. He concedes that he's made contributions to commission candidates, though he says the total amount is likely under $5000. And Koslow, Lottes says, "has been very, very effective for us in regards to opening doors -- obviously, he has contacts in city hall that have helped us."
Sher carps about the fact that Koslow should never have opened any city hall door for Lottes; the city's request for proposals for the Orangebrook contract explicitly forbids the use of hired lobbyists to help secure the contract. "If he used Koslow to help him get the contract, then it nullifies the contract," says Sher, who is a proponent of using a nonprofit organization to run municipal golf courses.
Sher, who has spoken with Guttmann about the investigation, also complains that two years ago, when Lottes was bidding for the Orangebrook contract, city staffers rated his company, Golf Hollywood, as the worst of four companies that were vying for the job. The commission disregarded those ratings and gave him the contract anyway. "Sometimes staff reports are wrong," Lottes explains. "The commission was obviously very happy with our performance."
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Former commissioner Eleanor Sobel, who is now a state representative, says she voted to give Lottes the Orangebrook contract in 1997 because she knew him and felt he'd done well with Hollywood Beach and Eco. Sobel says Koslow did in fact lobby her on Lottes' behalf, but she also claims it had no effect on her decision.
Lottes says he's used to being hounded by his critics who believe he's getting rich on the taxpayers. But he laughs at that notion, saying the city golf business is only as good as the weather. "It's September," he says, "and it's been raining every day, and all these guys are saying I'm getting rich? I'm not."
Contact Bob Norman at his e-mail address: