Embattled ethics watchdog to step down amid turmoil at water agency

The Metropolitan Water District’s embattled ethics watchdog announced her resignation Tuesday amid a monthslong internal struggle over her office and its investigations.

Ethics officer Deena Ghaly informed the MWD of her decision hours before the agency’s 38-member board was scheduled to evaluate her performance. Ghaly, whose office is the subject of an ongoing outside review, said it had become “impossible” for her to carry out her duties of creating, administering and enforcing ethics rules.

“There are concerns at the board level, as I understand them, about whether the ethics office should proceed with the work that it does,” she said. “And yet, I report to the board. So … there was no way to reconcile the law with the responses about my work from at least some of the board members.”

The board weighed in hours later, putting Ghaly on paid administrative leave until Oct. 10, her last day on the job. MWD spokesman Bob Muir said no reason was given for the decision, which was discussed during a closed session meeting.

Tuesday’s developments alarmed board member Sylvia Ballin, who argued that her MWD colleagues had failed to give the ethics office the tools to operate independently. Before the board went behind closed doors, Ballin questioned whether Ghaly was the subject of a “witch hunt.”

“This is a substantial loss for the public interest and public transparency,” she said.

Ghaly’s critics had a less charitable view, saying her office had been “running amok” for months.

“She abused her authority,” said attorney James Sutton, who represented three people investigated by the ethics office.

The debate over Ghaly’s office reflected, in part, the longstanding divide between the MWD’s representatives from San Diego and many other board members. Some within the San Diego delegation were among the most forceful in questioning the MWD’s recent decision to hire Alejandro Mayorkas, a former U.S. attorney in Los Angeles, to review Ghaly’s office.

Board chairman Randy Record, who represents a water agency in Riverside County, said Mayorkas’ hiring showed the agency is committed to effective oversight. “I want to emphasize that the board continues to support a strong and independent ethics office,” he said in a statement acknowledging Ghaly’s resignation.

Mayorkas, hired at nearly $1,100 an hour, plans to examine issues stemming from at least two MWD ethics investigations.

One focused on former MWD Chief Operating Officer Debra Man, who is seeking $50,000 for legal bills she incurred after being investigated.

Sutton, Man’s attorney, said the MWD’s ethics office spent roughly 18 months investigating whether Man gave false and misleading statements during public meetings about a recycled water project planned in Carson. After initially concluding that Man had deliberately misled board members, the ethics office reversed course and issued a letter clearing her, Sutton said.

Man retired as chief operating officer in June. She had been earning $288,704 annually in that post.

In 2015, the MWD’s San Diego representatives opposed a plan to put $15 million into the Carson project, saying the agency had been waiting for years for the results of a study of the cost and feasibility of such initiatives.

At one meeting, San Diego board member Keith Lewinger asked Man if the document — first authorized in 2010 — had been completed. Man said there was no formal study. Moments later, she said there was a draft working document but “no issued study.”

The following day, at another public meeting, Lewinger said he had obtained a 363-page document filled with additional financial estimates. He accused MWD staffers of keeping the draft document’s “relevant and substantial information” away from the board.

The board approved the project over San Diego’s objections. After that vote, Ghaly’s office opened its investigation into Man.

Sutton pushed back against the investigation’s initial findings, saying that Ghaly’s office had misinterpreted the ethics rules. He also said an investigator had taken quotes out of context and omitted certain information.

“It was bungled from the outset,” he said, adding: “It was an ethics office trying to justify its existence and using my client as the pawn.”

Ghaly disagreed, and said the ethics office had been responsive to Sutton’s concerns about that and other investigations.

“We actually went the extra mile to protect the subject’s — all subjects’ — due process rights,” Ghaly said.

Man, for her part, issued a statement saying her comments in 2015 were not as clear or concise as she had wished, but that she nevertheless “did not misrepresent any facts.”

“I was completely vindicated and found not to have violated any ethics laws or policies,” she said.

In the other investigation, Ghaly’s office had looked into an allegation that Lewinger had improperly released confidential information. Lewinger was cleared of any wrongdoing and afterward, he suspected that at least some colleagues were unhappy with the outcome.

Lewinger said that in the wake of Ghaly’s departure, the board will need to reassess the role of its ethics office, created as part of a state law in 1999.

“We have to have a soul searching on how our ethics department operates, and whether it’s independent from the board,” he said.

david.zahniser@latimes.com

Twitter: @DavidZahniser

UPDATES:

6:25 p.m.: This article was updated with ethics officer Deena Ghaly being placed on administrative leave, and additional reaction.

This article was originally published at 11:10 a.m.