City probes Convention Center facilities fund
Management company and site president deny wrongdoing alleged by former finance director
Long Beach is conducting an audit of a Convention Center revenue fund and temporarily has frozen the account, a city official said Tuesday evening, a day after reporting revealed a former Convention Center finance director had filed a lawsuit accusing CVB President and CEO Steve Goodling of financial mismanagement, an allegation he denied.
ASM Global, the management company contracted by the city to operate the center, also is a defendant in the lawsuit. A spokesman for that company declined comment on the lawsuit but has supported the spending program in the past.
The fund in question is called the $5 Fund, or Facilities Fund. Money goes into that account from parking revenue, with $1 set aside from every $5 collected. As part of the agreement between the city and ASM (previously SMG Holdings), the money is for facility enhancements and improvements at the center.
City spokesman Kevin Lee said in a Tuesday statement that the complaint was received in September, and an audit began in October. A letter to ASM also asked that spending from the fund be suspended.
“The city then contracted an independent accounting firm to review the complaint and the associated policies and procedures used by ASM Global/SMG to account for and manage the fund,” Lee wrote in an email. “The city and our contracted accounting firm are in the final stages of that review.”
Former Finance Director Paul Falzon has filed a wrongful termination lawsuit, in which he accused Goodling of using money from that fund for furniture and associated materials purchases without getting proper authorization. Falzon said Goodling's improper purchases totaled $1.3 million. He also said, in the lawsuit, that his firing was in retaliation for making the complaint to ASM management and the city.
Goodling's board at the Long Beach Convention & Visitors Bureau called the lawsuit “wholly without merit.”
“The allegations and assertions made in this complaint are absurd,” Goodling said in his own statement.
Lee did not comment on Goodling or the contract the city has with the CVB to promote tourism.
“The city and ASM Global/ SMG,” Lee said, “will integrate any recommendations (from the audit) into standard operations at the Center.”
The lawsuit was assigned to Superior Court Judge Elaine Lu at the Stanley Mosk Courthouse, in downtown L.A. Barrera & Associates have asked for a jury trial.