Citing big pay, lawmaker calls for state audit of L.A. County Fair Assn.
Fairgoers walk through the carnival game areas of the Los Angeles County fair in Pomona.
A Pomona assemblyman called Thursday on the state Legislature to conduct a far-reaching audit of the Los Angeles County Fair Assn., saying he was shocked to learn of the large pay packages awarded to its top managers in years when the organization lost money.
“How can this happen?” said Assemblyman Freddie Rodriguez, a Democrat whose district includes the county-owned fairgrounds in Pomona. “The salary and bonuses being paid to the executive staff at the association are way out of line with salaries paid at other fairs across California.”
Citing federal tax records, a Times investigation last week found that association Chief Executive James Henwood Jr. collected nearly $900,000 in total compensation in 2013, a year the organization lost $3.4 million. Four members of Henwood’s executive staff received pay and benefits that ranged from about $321,000 to about $389,000 that year, the most recent year for which the Internal Revenue Service filings were available.
Jorge Iturbe, of Ontario, and his sister Elodia Castro, of Fontana, walk through the Los Angeles County fair in Pomona where they had just purchased two new Vitamix machines. ( Rick Loomis / Los Angeles Times )
Rodriguez asked the Joint Legislative Audit Committee to determine whether the nonprofit association has mismanaged any state funds and whether the state has the authority to set caps on executive pay.
“There appears to be a complete lack of transparency in its operations, and taxpayers are paying the price,” Rodriguez said.
In an email, association spokeswoman Renee Hernandez defended the organization’s pay levels and said a state audit is not warranted.
“The L.A. County Fair Assn. should not be compared to other fairs in California,” Hernandez said. “We are not county or state employees.”
Hernandez said the association conducts “salary and compensation reviews with outside compensation experts. With their guidance, we create compensation packages that help us recruit and retain the best in the industry.”
Rodriguez is the latest to demand a review of the association’s pay packages after The Times’ investigation. Last week, the Board of Supervisors ordered an audit of the association and indicated the county would seek changes in the fairground lease. In addition, Rep. Norma Torres (D-Pomona) has asked the IRS and state attorney general’s office to investigate the organization, questioning whether it should retain its tax exemption as a nonprofit.
Most fairs in California are operated by state or county agencies. Others, like the L.A. event, are staged by nonprofit groups. The compensation paid to the L.A. association’s leaders in 2013 dwarfed the amounts received by other fair executives in California, according to records and officials.
The state agency that runs the San Diego County Fair brought in about as much total revenue in 2013 as the L.A. association, and has long been profitable, according to state records. Timothy Fennell, chief executive of the Del Mar Fairgrounds, where the San Diego fair is held, had a salary-and-benefits package that year of about $184,000, roughly a fifth of Henwood’s compensation. The other four executives for the L.A. association also made more than Fennell.
The head of the Alameda County Agricultural Fair Assn., a nonprofit organization, earned roughly $262,000 in total compensation last year (a comparable number was not available for 2013), a spokeswoman said. Another nonprofit in the field, the San Mateo County Expo & Fair Assn., paid its general manager about $225,000 in 2013, its tax filings show.
“When you compare it to other salaries ... it’s totally upside down,” Rodriguez said of the L.A. association. “And why is it?”
The Times investigation found the association has banked millions of dollars in government grants in recent years, according to its tax filings, and received other support from taxpayers, including a steep discount on the lease payments it makes to the county for year-round use of the fairgrounds.
Despite the public subsidies, it lost a total of $6.25 million from 2010 through 2013. Henwood and the four other managers received $2.8 million in bonuses and incentive pay in that same period, boosting their total compensation to $8.75 million, the tax records show. Over those four years, Henwood averaged about $846,000 in annual compensation.
In her email Thursday, Hernandez said the association is “not subsidized by the government, and we operate under a lease that encourages economic growth, development and job creation.”
Hernandez said the association will “cooperate with the committee at every level.”
ron.lin@latimes.com | Twitter: @ronlin
richard.winton@latimes.com | Twitter: @lacrimes
paul.pringle@latimes.com | Twitter: @PringleLATimes
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