SEIU Local 721 Calls for Attorney General to Investigate Self-Dealing and $22 Million in Extra Costs at Tarzana Treatment Center

SEIU Local 721 submitted an investigative report to the office of Attorney General Jerry Brown today providing evidence that executives at the Tarzana Treatment Center may have diverted, or allowed the diversion of, up to $22 million in assets that could been used to help thousands of people overcome substance abuse, mental health issues, and HIV/AIDS.

The report, by the Center for Public Accountability at SEIU Local 721, found what appears to be improper self-dealing by the management team at the largely government-funded nonprofit organization, one of Southern California's longest-established substance-abuse clinics. It found that four Tarzana management team members lease their own real estate properties to the organization at up to triple market rates, and that directors approved executive salaries so excessive that they may have violated their fiduciary duty to the organization.

The estimated $22 million in extra costs could have funded 177 years of residential medical detoxification treatment, 402 years of alcohol and drug residential treatment or 155,163 one-hour sessions of HIV/AIDS-related treatment and counseling.

In a letter attached to the report, SEIU Local 721 Executive Director John Tanner called on the office of state Attorney General Jerry Brown to investigate and, if appropriate, demand that the management team reimburse the nonprofit.

"No one should get rich on public funds that are designated to help people get on a road to recovery," Tanner said. "No matter how irresponsible these executives have been, people rely on the services they receive at Tarzana Treatment Center, and those services help avoid the need for more costly public services through the justice, prison and emergency health systems."

A Los Angeles Times investigation in June 2009 disclosed that Tarzana executives were extraordinarily well-paid and also rented properties to the nonprofit. The Center for Public Accountability report also builds on an official investigation by the Los Angeles County Auditor-Controller that found evidence of $1.5 million in excess payments in a single year by the organization to officers and directors from whom it leases real estate.

About SEIU Local 721 and the Center for Public Accountability

SEIU Local 721 represents more than 80,000 county and city employees across Southern California, including Ventura, Los Angeles, Orange, and Riverside counties and numerous cities in the region, as well as employees of special districts and publicly-funded non-profits such as health clinics.

SEIU Local 721 members created the Center for Public Accountability to help make government work better for Californians and expose waste in public services through original investigative research and commentary.