City Seeks Accounting of Marathon’s Free Ads : Audit: Controller wants to determine if group has adhered to contract terms. Officials say they have more than met their obligations.

Los Angeles City Controller Rick Tuttle said Friday that his office will launch an inquiry to determine whether the city receives adequate compensation from the operators of the Los Angeles Marathon, who recently admitted to illegally laundering campaign donations to city officials.

Tuttle said a preliminary inquiry by his office had found inadequate records to determine whether Los Angeles Marathon Inc. is providing the $300,000 in free billboard advertising that it is required to give the city annually in exchange for the right to stage the race.

“I have decided that a thorough review of contract compliance should be undertaken by my staff to determine whether the city of Los Angeles is owed additional compensation and free advertising as specified in the contract” with the marathon firm, Tuttle said in a prepared statement.

Los Angeles Marathon President William Burke has sent a letter to the city saying that his firm has met its obligations to the city many times over. He valued free advertising the city has received over the last three years at nearly $2.2 million, well above the approximately $900,000 required by the city.

Burke was responding to a letter from City Administrative Officer Keith Comrie that asked the marathon firm to explain apparent deficiencies in complying with a city contract.

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Comrie asked Burke to provide invoices detailing the advertising that the city has received. He has also asked Burke to assure that the city is not being required to buy advertising in order to get more advertising free--as specifically prohibited in its contract with the city. Finally, Comrie questioned the marathon firm’s claim that it had lived up to its obligations, in part, by placing ads for the city-owned Los Angeles Zoo on millions of milk cartons.

“We are not aware of any authorization to substitute milk carton advertising for the billboards,” Comrie wrote.

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Burke so far has not provided invoices detailing billboard advertising, but did forward invoices from the dairy that provided the milk carton ads.

Scrutiny of the marathon’s operations has intensified greatly since Burke and one of his top assistants, George Beasley, signed a legal settlement last month acknowledging that the marathon illegally concealed that it was the true source of $73,000 in campaign donations to City Council members and others. The illegal donations came about the time that the council was extending the marathon’s contract through the year 2000.

Questions raised by Comrie and Tuttle center around the marathon’s arrangement for providing the city advertising. Through an intermediate firm, Patrick Media, the marathon has said it would provide roughly $300,000 a year in billboard space to advertise the Los Angeles Zoo, city recycling efforts and other city programs.

But Zoo Public Relations Director Lora LaMarca told The Times, and later Comrie’s office, that the zoo has been asked to pay for advertising, in order to get a like amount of billboard space free.

Burke, who could not be reached for comment, said in his letter to the city that “there has been no change in (Patrick Media’s) philosophy relating to free billboard space utilization since the inception of this program.”

Patrick Media officials also could not be reached for comment, but have previously said in a written statement that they have provided the city well above the minimum advertising required in the marathon contract.