An investigation by the Center for Public Accountability identifies $22 million in extra costs that have been or will be incurred, apparently to benefit executives and other insiders at the non-profit Tarzana Treatment Center, which receives 85% of its $45-million annual budget from government sources.
The costs could have been used to help thousands of people overcome substance abuse, mental health issues and HIV/AIDS.
The Center released a report today that details a pattern of self-dealing on real estate transactions and excessive executive compensation by the Tarzana Treatment Center management team:
Two Tarzana Treatment Center executives, along with other board members, rent properties to the nonprofit at up to triple the market rates. Tarzana Treatment Center could have saved an estimated $14 million if it had purchased those properties rather than leased them from its board members.
Over the last 11 years, the mid-sized non-profit organization spent $5.6 million more than industry standards to compensate its three top executives, who are also members of its board. The chief executive officer and chief operating officer of the $45-million nonprofit pay themselves more than the top executives at the American Cancer Society, Boys & Girls Clubs of America and YMCA, all billion-dollar organizations that operate nationwide.
The Center found that $22 million in extra costs could have funded:
• 177 years of residential medical detoxification treatment;
• 402 years of alcohol and drug residential treatment; or
• 155,163 one-hour sessions of HIV/AIDS-related treatment and counseling
Tarzana Treatment Center receives 85% of its $45-million annual budget from government sources, including $29 million from the County of Los Angeles.