Coliseum official’s own companies made $1.7 million in deals

Todd DeStefano’s income began growing about the time the Coliseum and Sports Arena slipped into the red, records show.

June 25, 2011|By Andrew Blankstein, Rong-Gong Lin II and Paul Pringle, Los Angeles Times

“Instead of being praised for bringing profitable events for the Coliseum on a continuous basis, he’s become a victim of his own success,” Blatt said.

The Coliseum and Sports Arena have been in the red since fiscal 2008-09, about the time that DeStefano’s side income began to grow substantially, according to county and state records and interviews.

The $800,000 in fees from Insomniac equaled the profit the commission hoped to earn this year from an Electric Daisy rave, according to agency financial documents. The event was canceled in the wake of the DeStefano controversy and has moved to Las Vegas.

The Los Angeles County district attorney’s office and state Fair Political Practices Commission are investigating DeStefano’s relationship with Insomniac. Three weeks ago, authorities took computers and other items from the homes of DeStefano and Lynch.

The Times has learned that district attorney’s investigators also have served search warrants at the office and home of Insomniac head Pasquale Rotella. And they have seized information from five banks, a district attorney’s spokeswoman confirmed.

An attorney for Insomniac and Rotella said investigators told him Rotella and the company are not subjects of the probe. Insomniac hired DeStefano’s firms in the belief that he “was the authorized representative of the Coliseum,” said the lawyer, Gary Jay Kaufman. “Insomniac has done nothing wrong and always conducted itself in a legal and ethical manner.”

In February, Lynch resigned under pressure because he approved DeStefano’s side work with Insomniac. DeStefano left after the current president of the commission, David Israel, ordered him to choose between his government job and his work for Insomniac.

The Go Ventures executive, Gerami, said he, too, got Lynch’s go-ahead to retain DeStefano’s firms. Gerami said he was concerned that DeStefano had a conflict of interest, but Lynch assured him that DeStefano had his blessing. “I do business by the book,” Gerami said.

Lynch’s lawyer expressed doubt that his client had the conversation Gerami described. Capozzola said Lynch “was aware” that DeStefano worked for Go Ventures while employed at the Coliseum, but Lynch did not know how much money his firms were being paid.

Go Ventures agreed to pay DeStefano’s LAC Events a percentage of its concert grosses at the Sports Arena, from which the DeStefano firm covered certain expenses, including the $25,000 cost of leasing the venue, Gerami said. He said DeStefano did a good job, and no one at the commission advised him that DeStefano’s government duties included the same tasks.

DeStefano’s massage expenses were for a back injury he suffered on the job, his lawyer said. DeStefano billed them as expenses because it was easier and less costly than filing a workers’ compensation claim, according to Lederkramer, the financial officer.

DeStefano received the car allowance because he drove to meetings on commission business, said Sandbrook, the interim general manager.

Commission policy allows staff members to get free tickets to “obtain firsthand knowledge” of event operations.

He also received a 50% rental discount and free guest parking — breaks generally not available to the public — when he held his 2009 wedding reception at the state’s California Science Center, next to the Coliseum.