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L.A. agency uses taxpayer money on lavish parties, alcohol

LOS ANGELES A public agency that provides health care for Los Angeles' poorest families has been using taxpayer money on lavish parties and alcohol, reports CBS Los Angeles.

The station's investigative reporter David Goldstein reviewed L.A. Care Health Plan's credit card statements and salary information for 2012.

The agency's executives spent more than $8,100 for a 59-person dinner at Roy's Hawaiian Fusion in downtown Los Angeles. To wash down the meal, they bought 29 bottles of wine worth more than $1,100.

The organization also spent more than $58,000 on a 2011 holiday party for 550 people at the Westin Bonaventure in downtown L.A., $16,000 on American Express gift cards and more than $5,000 on personalized cookies with the L.A. Care logo.

In addition, the agency spent thousands of dollars on catered working lunches from the Corner Bakery Cafe and meals at swanky restaurants like the Los Angeles Athletic Club, where one lunch cost more than $1,400.

Howard Kahn, the CEO of L.A. Care, defended all the charges Goldstein found, including the food and wine at Roy's, which he said was an appreciation dinner for the agency's Board of Governors.

"I think we've been very responsible in our use of our funds here at L.A. Care. I understand that people looking at isolation at one particular expenditure might say, 'Gee, why are they doing that?' But I think you have to look at the whole picture," he said.

Kahn said the agency's administrative costs are extremely low and the organization is well-run.

Goldstein, however, discovered that the latest financial statement showed a $20 million deficit for this year, and earlier in the year, the agency had to cancel its Healthy Kids program due to a lack of funds.

Kahn made a large amount of money last year, including a $434,000 salary, $86,000 in incentive compensation, $10,000 in parking and car allowance, and nearly $200,000 in benefits, for a total of nearly $730,000 in taxpayer money.

By comparison, the president of the United States only makes $400,000.

"I don't compare my salary to the president's or anybody else's," said Kahn.

Kahn referred Goldstein to board chairman Dr. Thomas Horowitz.

"I believe he is worth what we are paying him considering the job he is doing," said Horowitz.

U.S. Rep. Darrell Issa, a California Republican who chairs the House Committee on Oversight and Government Reform, disagreed.

"The idea that if you are going to do public service you have to be paid nearly $1 million means you are not there for public service. You're there for personal profit," he said.

Bob Stern, an expert on government ethics, said the lavish expenditures and dinners on taxpayer expense need to stop.

"The big problem is they think that they can get away with it because nobody is looking at their expenditures. I'm sure after your report comes out, there won't be any more of these lavish dinners and lavish parties," he said.

An area woman who is on Medi-Cal, California's Medicaid program, and receives her health-care coverage through L.A. Care was stunned by Goldstein's findings. Demetria Saffore of Palmadale, who was born with albinism, or lack of pigment in the skin, hair and eyes, said she relies on food stamps.

"I get $114 for a whole month for food and that's to feed three people," she said.

Staffore was shocked when she read the receipts from L.A. Care's executives.

"Oh my God. Yikes. Whoa. I can't even dream of going to a restaurant of that caliber," she said.