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Water agency looks into its own ethics office, sparking fears the office will be undermined

The Metropolitan Water District has opened a review into its own ethics office, hiring a Washington, D.C.-based law firm to look into at least two investigations carried out at the agency.

The MWD is paying attorney Alejandro Mayorkas, the former deputy secretary for the Department of Homeland Security, nearly $1,100 per hour to examine the policies and procedures of the office, which investigates potential violations of internal ethics rules.

Mayorkas, a partner with the firm WilmerHale, said the review was initiated at least in part as the result of concerns over two ethics office investigations. He declined to say who the subjects were. But he said the cases had sparked disagreements at the agency over policy issues, such as confidentiality.

“We are reviewing documents. We are interviewing individuals at the district. We are looking at the investigative record of these two cases. And [if] we determine that it would be helpful to review records of other investigations conducted, we will certainly request the ability to do so,” he said in an interview.

Mayorkas, a former U.S. attorney in Los Angeles, billed his work as a “governance review” — one that will ultimately strengthen the workings of the ethics office.

Some on the agency’s 38-member board are not so sure. MWD board member Sylvia Ballin, who represents San Fernando, said she fears the law firm’s work is part of a larger effort at the agency to undermine the office’s independence.

“For the first time, I thought we really and truly had an ethics officer that believed in ethics,” said Ballin, a former MWD employee herself. “And I feel like her hands are being tied.”

The MWD is a regional wholesaler that provides water to 26 cities and water agencies, which in turn deliver water to 19 million people in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties. The agency’s ethics office was created in 1999 to establish and enforce rules involving conflicts of interest, contracting, campaign contributions and other issues.

Since the outside review began, the ethics office has turned over thousands of pages of documents. Ethics officer Deena Ghaly said she is worried that someone at the MWD is seeking a particular result from the review.

"Of course we have concerns,” she said. “We handled a couple of politically sensitive matters, and it seems like this was kind of a response to that. That feels different from an overall review of what our office does.”

Ghaly would not identify the people targeted in the two investigations mentioned by Mayorkas. But Keith Lewinger, an MWD board member who represents San Diego, identified himself as the subject of one of them.

Lewinger said investigators looked into the question of whether he improperly released confidential information — and cleared him of any wrongdoing.

“I have no problem with the way the ethics office handled the investigation. My only issue was that they didn’t inform me in a timely manner that the investigation had been closed when no wrongdoing had been found,” he said. “Is that their fault? I don’t know.”

Ghaly said her office did look into an MWD board member and found no wrongdoing. The other investigation, she said, centered on a member of senior management.

In the second case, Ghaly said, investigators made factual findings that they believed supported the conclusion that wrongdoing occurred. However, the office decided not to move forward with a finding of any MWD ethics violations after determining such a move would not be “entirely fair to the subject,” Ghaly said.

The investigation’s findings were sent to the MWD’s general manager for review and action, she added.

Word of the outside review into the ethics office became public three months ago, when MWD board chairman Randy Record disclosed at a meeting that he had formed a temporary subcommittee to examine Ghaly’s office.

A week later, Ghaly criticized Record’s decision, informing board members in an email that the new subcommittee would not be subject to the state’s open meeting law. The process, Ghaly warned, would “likely result in an inaccurate and incomplete evaluation.”

“Moreover, it cannot protect the board from the perception that it is unreasonably interfering with Metropolitan’s legally mandated duty to maintain an independent, properly resourced and supported ethics office,” she wrote.

Record responded with his own email, saying he had formed the subcommittee after receiving a letter from a lawyer representing an MWD employee investigated by Ghaly’s office. Record said the investigation appeared to put the MWD at risk of a lawsuit, according to the email, a copy of which was obtained by The Times.

“After reviewing Deena’s email to the board, I am further convinced this is the appropriate process,” he wrote.

The agency’s legal committee is set to meet Sept. 12 to discuss a claim for attorneys’ fees and other costs involving the investigation of an “executive manager.”

Record, who represents a water district based in Riverside County, said there have been disagreements at the agency over whether the findings of certain investigations should be made public. Record also said he is concerned about situations in which the subject of an investigation disputes the findings of the MWD’s ethics investigators.

“It’s important for the ethics office to be independent,” he said. “But it’s also important for the ethics office to be accountable. And there are issues with the rights of people that may be investigated.”

James Sutton, an attorney who has represented three people investigated by the MWD’s ethics office over the last five years, offered a much stronger take, saying the board needs to rein in Ghaly’s office.

“The ethics office is running amok,” he said. “It is judge, jury and prosecutor all rolled into one. And there’s no oversight.”

Sutton declined to say whether he represented either person in the two investigations that helped trigger Mayorkas’ review.

Ghaly disputed Sutton’s assertions, saying there are already “multiple internal controls” over her office’s activities. The MWD’s in-house lawyer also plays a large role in reviewing investigative reports, she said. Ghaly reports directly to the board.

“We are very cautious and conservative,” she said. “We will put the due process rights of the subject [of an investigation] ahead of going forward with any finding of violation.”

Mayorkas said he plans to update the board on his activities in October. Because the contract with Mayorkas’ firm was for less than $250,000, it did not require a board vote, an MWD official said.

david.zahniser@latimes.com

Twitter: @DavidZahniser

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