Watch CBS News

Goldstein Investigation: City Sells Off Yacht For Fraction Of What Taxpayers Paid

LOS ANGELES ( — This is a story about turning $4.1 million of public money into just a fraction of that amount.

CBS2 Investigative Reporter David Goldstein first told us about the city-owned Port of Los Angeles yacht, the Angelena, back in February 2012.

The Angelena was used for tours of the harbor for companies that use the port, as well as college students and even interns for former Mayor Antonio Villaraigosa.

When the port wanted to convert the engines into a hybrid system, Goldstein documented the projected $700,000 cost, which ultimately ballooned to $4.1 million.

And even then, the yacht was never certified for use by the U.S. Coast Guard.

At first, the then-port director didn't want to talk about it, and the former mayor even denied the luxuries of a 73-foot yacht.

"It's not a yacht," then-Mayor Villaraigosa said, "it's a boat."

But ultimately, new port director Gene Seroka, who inherited the mess, made a decision.

When asked if the hefty price tag was worth it, Seroka said: "I don't think so, and that's why I stopped the project."

He pulled the plug and the Angelena sailed to the auction block, where it was put up for sale just like any other discarded item for the city of L.A.

The ad featured flashy pictures trying to entice the highest bidder. But when the gavel sounded, the public's $4.1 million investment sold for just $100,000, a loss of roughly $4 million in taxpayer money.

"After all that money, it only sold for $100,000. What does that tell you?" Goldstein asked Seroka.

"It tells me that we need to move forward, again, and realistically speaking, this is not an area that we focus on," Seroka said.

"You want to put this to bed?" asked Goldstein.

"Absolutely," Seroka replied.

But while the Angelena set sail as far as the city is concerned, it hasn't stopped the port from using public money for free tours of the harbor.

Goldstein found tens of thousands of dollars in invoices for charter tours just last year.

In July, there were 11 boats chartered by the city-owned Port of L.A. at $1,250 a pop - some spent on the 83-foot catamaran Triumphant.

From January through September 2015, Goldstein found the port book 73 charters using public money totaling more than $92,000.

Goldstein obtained the reservation forms and found some appeared to be for business purposes to show potential companies around the port.

But others were for college students both here and abroad, plus community groups and friends of the port, the same type of groups that set sail on the Angelena.

Seroka defended the tours, calling them more fiscally responsible than before.

"Why is it more fiscally responsible now that you're renting boats as opposed to owning one?" asked Goldstein.

"Simple math," Seroka said. "It would take us 35 years of rented vessels to spend the amount of money that was put into the Angelena."

Money that went down the drain, and while the Angelena is now gone, the tours seem to remain.

The Angelena was purchased by a private company that claims they will produce hybrid yachts.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.