DWP boss withdraws pension request

One day after coming under fire from City Controller Laura Chick, the head of the Los Angeles Department of Water and Power said Thursday that he would withdraw a proposal to give a $152,000 pension boost to his No. 2 executive.

Chick had refused to write a check to Raman Raj, the DWP’s chief operating officer, calling the agency’s offer unprecedented and saying she wanted a public discussion of the proposal by the City Council. Raj receives an annual salary of $247,000.

DWP General Manager H. David Nahai said in a prepared statement that he was dropping the request -- part of an agreement to lure Raj to the DWP in December -- because of questions about its “appropriateness.”

“Questions have arisen regarding the advisability of this matter and how it may be perceived,” Nahai said. “We wish to be sensitive to these concerns and responsive to them and have therefore decided to withdraw this request for retirement benefits altogether.”

Chick said in a statement that she was “pleased” with the decision by DWP officials and hoped that in the future “they remember that their transactions need to hold up under the light of day.”

“When taxpayer dollars are allocated behind closed doors there is a reason, and usually it’s not a good one.”

Raj has been a subject of controversy for weeks. Council members has repeatedly voiced concern over the DWP’s public discussion of contracts with at least four companies that had been clients of Raj last year, when he worked as a private consultant before returning to the DWP.

Two contracts with former Raj clients were scheduled to come up for a vote today.

With both proposals facing a chance of being rejected by the council, Mayor Antonio Villaraigosa sent a letter late Thursday asking the panel to reject them -- and give the DWP time to craft a conflict-of-interest policy.

Council President Eric Garcetti welcomed the request, saying it was “unfortunate” that it had taken so much effort to get such a policy.

“We’re pleased that the mayor shares our perspective that these contracts don’t pass the smell test,” he added.

Raj had previously worked as a top DWP administrator, but was forced out in 2001.

At the time, he was the subject of a scathing internal report that warned that he could not be trusted to “act in the department’s interests when they may conflict with his own agenda.”

The document, whose contents were reported by The Times two months ago, was commissioned after the DWP had paid $3.3 million to employees who had alleged discrimination by other DWP workers.

The report concluded that Raj had discouraged employee discrimination complaints and shielded union employees from disciplinary action.

Nahai brought Raj back to the DWP in December, tapping him to run day-to-day operations.

But Chick did not learn of the pension request until seven months later, when she received a $76,000 invoice to cover three years’ worth of DWP pension payments, plus state and federal taxes.

Chick declined to pay the bill, saying she did not understand the rationale.

Chick said that her office demanded a vote on the pension boost by the full DWP board.

The board did so on Tuesday. DWP board President Nick Patsaouras said Thursday that the proposal would not have been withdrawn had it not been brought to light.

Patsaouras, who voted for the pension increase earlier this week, also said that if he had been told of Nahai’s agreement with Raj last year, he would have recommended against it.

“If I were making the decision back in December, I would not have offered it,” he said. “We were in the midst of begging the public and the City Council for rate increases.”

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david.zahniser@latimes.com