Past roles for DWP executive draw fire

A top executive hired to run day-to-day operations at the Los Angeles Department of Water and Power has come under fire as the latest example of the revolving door between city government and businesses that seek lucrative public contracts.

Before returning to the DWP in December after a six-year absence, Raman Raj, who earns $247,000 annually as the utility’s chief operating officer, worked most of last year as a consultant for at least three DWP contractors. He also worked for a company being discussed as the possible subject of a lawsuit over a 2005 power outage.

DWP General Manager H. David Nahai said Raj has “religiously” avoided any discussions of those companies, stepping out of the room on three occasions since Dec. 1, the day he took the job.

But lingering questions about Raj prompted the City Council on Friday to reject a proposed $1.5-million contract to one of Raj’s former clients. Council members said they were not told of Raj’s recent relationship with the contractor -- or of any strategy to isolate him from potential conflicts.

“As a committee chair, I feel I got played, because we didn’t understand the context of those contracts, and we needed to hear it up front,” said Councilwoman Jan Perry, who heads the council’s Energy and Environment Committee.

“He should have told us. He should have told me,” she said.

Friday’s vote will require the DWP to reconsider its proposed three-year contract with Osmose Inc., which is seeking to maintain computer software that gathers data on power outages.

Under the city charter, commissioners are required to step down after three recusals in a single year -- or rid themselves of their potential conflict. No such rule exists, however, for city department heads and their top executives, including Raj.

Raj, 58, said he has severed ties with his former clients and will have no trouble avoiding discussion of them. And Nahai, who was hired last year by Mayor Antonio Villaraigosa, said the DWP erected a “Chinese wall” around Raj to insulate him from potential conflicts.

Nahai said he knew of Raj’s consulting work before he hired him and had no trouble with it.

“I regarded his working with clients that were working with the department as actually a positive thing in bringing him to this post,” Nahai said. “He brings a private-sector perspective and an understanding of how the outside world views contracting with the DWP.”

Council members have grown touchy over revolving-door issues in recent months. Last fall, Councilman Bill Rosendahl voiced dismay when a top city land-use lawyer jumped to Latham and Watkins, a law firm with dozens of City Hall lobbying clients.

And two weeks ago, Councilwoman Janice Hahn raised concerns about Marcus Allen, who was picked by Villaraigosa to become the city’s top financial analyst. Allen, who had worked closely with two City Hall lobbyists over the last year, later dropped out of the running.

Despite the talk of a wall, DWP Commission President Nick Patsaouras said no one from the agency informed him of Raj’s former clients or efforts to isolate him from them. And DWP documents show that Raj was sent copies of at least two DWP memos involving his former clients.

Until November, Raj was a consultant for the firm Resources Roundtable, meeting with various DWP officials about work performed by his clients.

Those clients were publicly disclosed March 20, the day the Ethics Commission received a form from Raj naming each company that paid him more than $10,000 in 2007. They include:

* Smartsynch, which received a $3.5-million contract in September to provide the DWP with meter-reading software.

* Itron Inc., which has a $2.9-million software contract with the utility. The DWP Commission extended the contract in October, two months before Raj took his new job.

* Osmose, whose contract was rejected Friday by the council. Osmose has another contract pending before the DWP commission next month.

* Enspiria, a Denver-based company whose subsidiary, Convergent Group, received a $53-million contract to upgrade scores of DWP substations.

Three weeks ago, DWP commissioners met behind closed doors to discuss whether Enspiria played a role in a September 2005 power outage, according to utility officials.

The outage, which affected 2 million people, was triggered by a series of events, including a decision by DWP employees to cut wiring at a facility being upgraded in Toluca Lake.

“I’m of the opinion, after my research, that there’s culpability,” said Patsaouras, who is also an engineer. “It will be up to the city attorney and the remainder of the board to decide on whether to sue.”

Patsaouras said no one from the DWP staff mentioned that Raj had been an Enspiria consultant before or after the closed-door discussion. No one mentioned Raj’s business ties to Osmose when the board voted on that company’s contract, he said.

“I think the commission as a whole should have been apprised,” he added.

Raj also represented GKK Works, an architectural firm that worked on the new $454-million police headquarters. Patsaouras is on a committee overseeing that project.

Raj said he worked at the DWP until 2001 and left because his bosses in the Hahn administration viewed him as too close to Villaraigosa and the former general manager, S. David Freeman.

“I’ve been gone six years, so I don’t see this as a revolving door,” Raj said. “I see it as coming back with a wider perspective.”

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david.zahniser@latimes.com