A Great Park Success Story: Stu Mollrich’s House

Yehudi Gaffen of Gafcon and Stu Mollrich of Forde & Mollrich had the most interesting financial arrangements.

According to the formal contracts, Gafcon, led by its CEO Yehudi “Gaf” Gaffen, was a “prime contractor” of the Great Park and controlled the Great Park Design Studio.  Among the Design Studios’ many sub-contractors was Stu Mollrich‘s PR firm Forde and Mollrich.  Thus, contractually, F&M submitted invoices to Gafcon, and Gafcon vetted whether F&M performed satisfactorily and approved payments.  After 2006, F&M had no direct contactual relation with the City of Irvine, the Great Park Board, nor any other Great Park entity except the Design Studio.

The reality was far more interesting.

Both Stu Mollrich and Arnold Forde, the principals of F&M, “consulted” on most Great Park decisions, including influencing who got paid. For example, Great Park CEO Wally Kreutzen’s challenged Design Studio invoices multiple times but was dismissed by Stu saying “We have three votes. Just pay it.” (Wally Kreutzen deposition, pp 39-41)  F&M had enough pull with the city council majority to get invoices approved over the CEO’s objections.

This made for an interesting dynamic.  Gafcon was responsible for approving F&Ms invoices, but F&M influenced which invoices, including Gafcon’s, the Board approved.   No wonder Gafcon never put F&M’s “PR contract” out for competitive bidding.

But there was still more Gaf and Stu’s relationship….

In 2007 Stu remodeled his Laguna Beach house. He hired Gafcon to manage the project.  So, in addition to relaxing the city’s scrutiny of F&M invoices, (per Sean Joyce and Sharon Landers depositions), Gaf determined what got done on Stu’s house and how much it cost.

If that sounds odd to you, you’re not alone.  The IRS thought so too, performing its own audit that led to a settlement (Stu Mollrich depostion, p 211).  Too bad we’ll never find out what was in that settlement.