Site last updated: Saturday, April 25, 2026

Log In

Reset Password
MENU
Butler County's great daily newspaper

LA case stirs memories of abuses by Fumo, Veon

If officials in Los Angeles had followed news reports about the abuse of nonprofits by two state lawmakers in Pennsylvania, they might have avoided their current predicament.

What’s going on in Los Angeles brings to mind what happened at Citizens for Better Neighborhoods, a nonprofit organization created by former state Sen. Vince Fumo, and at the Beaver Initiative for Growth (BIG), a nonprofit created and run by former state Rep. Mike Veon of Beaver.

Fumo was found guilty of misusing state funds and of misusing the nonprofit’s assets and funds for his personal financial gain. Veon was found guilty of using BIG for political and financial gain for himself and his political supporters. Both Fumo and Veon were sentenced to serve prison terms.

In Los Angeles, city officials have for months been asking for detailed spending records of two nonprofit trusts created by the Los Angeles Department of Water and Power and funded with ratepayer money to the tune of $40 million over the past decade. So far, the local leader of the International Brotherhood of Electrical Workers, and a key person controlling the trusts, refuses to release detailed spending records.

The records released so far are broad and raise more questions. For instance, $1.7 million or about 44 percent of the trusts’ revenue for 2013 was spent on salaries and benefits for eight employees. The records also reveal that $360,000 was spend on meetings and travel from 2009 to 2011, but records don’t say who went where and for what purpose. What work do the trusts do other than pad salaries of a few union officers?

Tax records reveal two trust administrators, both high-ranking union officials, were paid $212,236 and $171,361 in 2012. Those same records show $2.4 million being spent on “other.”

Some trust board members have voted to release detailed spending records, but they were outvoted by union members on the board.

The union leader at the city’s Water and Power agency claims that the trusts are not subject to the state Public Records Act or requests by city officials. But being funded with ratepayer dollars paid to a monopoly utility should be treated the same as tax dollars, meaning full transparency.

The city’s district attorney joined LA’s mayor in pressing for full disclosure of spending from the trusts. So far, with no success.

The trusts were set up to improve relations between labor and management and were created following tough labor negotiations following layoffs at the city owned utility.

The abuse of nonprofit organizations by Veon and Fumo should have raised red flags across the country, sending a warning that when an elected official or politically powerful person creates, runs or otherwise controls a nonprofit organization, extra scrutiny is necessary.

The potential for abuse is obvious. During Fumo’s trial, it was learned he was given free office space worth $600,000 by the nonprofit run by his former Senate aide. He also had the nonprofit buy tens of thousands of dollars worth of tools that were delivered to each of his four homes. Fumo also had the nonprofit buy a $27,000 bulldozer for use at his Harrisburg-area farm.

In Veon’s case, his leadership position in the state House of Representatives allowed him to direct $10 million in taxpayer money to BIG, which he and one other lawmaker controlled. In Veon’s trial for misuse of funds at BIG, which happened while he was in prison for his role in the “Bonusgate” scandal, prosecutors revealed that much of BIG’s spending benefited Veon or his friends politically.

To a certain degree, Fumo and Veon created and controlled nonprofits that functioned as personal piggy banks. It’s starting to look like much the same has happened at the Los Angeles utility.

For nonprofits with politically powerful people in control to not be abused, full transparency for spending should required. The lessons of Fumo and Veon cannot be forgotten.

More in Our Opinion

Subscribe to our Daily Newsletter

* indicates required
TODAY'S PHOTOS