The Southern California branch of the Better Business Bureau (BBB) was expelled by the national parent association this week, bringing to an end a pay-to-play scandal that stretched back to 2010.

The local bureau, largest in the nation, claimed it was just following orders when it bumped up the ratings for dues-paying members, an allegation denied by the home office in Arlington, Virginia.

“It is ironic that the BBB accuses us of failing to follow organizational policy on the one hand, and then labels us a ‘bad apple’ when we do,”  former local BBB chief Kiry Peng said in a statement. “The reality is very simple: the pay-for-play policy was the BBB's, not ours.”

Whose ever idea it was, it wasn’t hard to spot some of the rating incongruities. Reports by ABC-TV and the Los Angeles Times highlighted some of the worst abuses. Several Southland restaurants owned by world famous foodie Wolfgang Puck, who was not a BBB member, received substandard grades (one got an “F”), while less delectable alternatives that were members received an “A+.” Puck told ABC that he was told he had to pay dues to get a better rating.

A sting operation by a group of disgruntled members found that they could obtain an “A-” rating for a non-existent business called Hamas—although that is also the name of a group recognized as a terrorist organization by the United States—just by paying the  dues. Other less glamorous examples of pay-to-play included businesses getting rating bumps from “C” to “A” immediately after becoming dues-paying BBB members.  

Around 18,000 businesses in the Los Angeles area are accredited by the bureau, which will continue to have an online presence and rely on other BBBs around the country while re-establishing the local office, which also handles complaints and issues reports about businesses.

Meanwhile, Peng wasted little time reconstituting the bureau into a new organization called the Business Consumer Alliance, of which he is now chief executive. Judging by its website, the alliance is performing the same services for the same clientele, but without the Better Business Bureau imprimatur.

According to the site, it changed its name after 77 years “to allow for an expansion of the services we provide to consumers and businesses, and to broaden our service area from the greater Los Angeles area to North America.”

There is no mention of pay-to-play.

–Ken Broder

To Learn More:

Better Business Bureau of Southern California Expelled after Apparent Pay-to-Play Scandal (by Robert Jablon, Associated Press)

Better Business Bureau Gives Itself an “F” in Los Angeles (by Cindy Galli and Brian Ross, ABC News)

Better Business Bureau Expels Los Angeles Chapter, Largest in Nation (by Ricardo Lopez, Los Angeles Times)