L.A. County Fair Assn. Under Scrutiny

The county Board of Supervisors Nov. 3 ordered a wide-ranging audit of the association and said it would seek to renegotiate terms of a lease that gives the organization year-round control of the taxpayer-owned fairgrounds, known as the  the Times said.

“It’s out of whack,” Supervisor Michael D. Antonovich said of the annual pay received by the association’s managers, including nearly $900,000 in total compensation for CEO James Henwood Jr. in 2013. “It’s not logical or reasonable.”

Rep. Norma Torres, whose district includes the fairgrounds, said she would ask the Internal Revenue Service to investigate the association, with an eye on possibly revoking its tax exemption as a nonprofit.

“It is time to bring proper oversight and accountability to the Fairplex’s management,” she said. Torres added that when the fair association avoids paying taxes as a nonprofit, it is withholding money from local schools, the county and the cash-strapped city of Pomona. She said it’s hard to justify the high compensation in a predominantly minority, working-class city, according to the Times.

Association spokeswoman Renee Hernandez said in a statement to the paper that the organization welcomed the scrutiny.

“We are audited regularly by the county,” Hernandez said. “We were actually expecting an audit in early 2016. And we have been working with the county on lease negotiations for several years. We are delighted to see it moving forward.”

Hernandez previously said in a series of emails that the association has generated revenue for the county through rent payments on the fairgrounds and a tax that promoters pay to use the property for concerts and other events. She also said the association has expanded its acreage and programming devoted to agriculture. However, the Times reported that the association lost $6.25 million from 2010 through 2013, the most recent year that tax records are available.

Bonuses and incentive pay collected by Henwood and four of his managers during that time totaled $2.8 million, boosting their combined compensation to $8.75 million, the IRS filings show.

Henwood averaged about $846,000 in annual compensation those four years. The association’s original purpose of promoting the interests of local farmers seems to have gone by the wayside as the organization has gone on to own a hotel, conference center and a catering firm. That shift in focus was apparent in August when the association hosted a rave concert at the fairgrounds. Two young women who attended the rave were rushed to hospitals and died of apparent overdoses, the paper said.

The audit and calls for an IRS investigation were applauded by neighbors who have objected to association’s decision to open the fairgrounds to raves and other events they say are disruptive, according to the Times.