Joint Task Force Formed to Probe O.C. Water District

Federal and state prosecutors officially announced Tuesday they have formed a joint task force to investigate the Santa Margarita Water District, noting that similar teams have been successfully used in high-profile investigations such as the one involving Lincoln Savings & Loan.

In a public announcement, the two agencies took the unusual step of pointing out four highly visible investigations they pursued jointly: Lincoln Savings, the W. Patrick Moriarty political corruption case, an ongoing probe into mortgage loan fraud and the Blake Yoon organized-crime murder conspiracy.

“We’ve been very successful in the past in pursuing joint investigations,” U.S. Atty. Terree A. Bowers said. “It allows us to maximize resources in evaluating the more complex cases.”

Santa Margarita Water District General Manager Walter W. (Bill) Knitz and deputy Michael P. Lord are under investigation by the FBI and the Orange County district attorney’s office in connection with their acceptance of what now amounts to nearly $60,000 in gifts over the past six years from contractors, some of whom won multimillion-dollar contracts based in part on the men’s recommendations.

Federal and state laws prohibit public officials from accepting substantial gifts in exchange for contract approvals.

Knitz and Lord have strongly denied any impropriety.

Marshall M. Schulman, Knitz’s attorney, criticized the investigation and said his client has not broken any laws.

“I think to bring in the feds on a case of this nature is ridiculous,” said Schulman.

Lord’s attorney, Gary M. Pohlson, said he is convinced the joint investigation will clear his client.

“I’m confident that once all the facts are out they will see he did not violate any laws or did not knowingly violate any laws and always acted as he was instructed to do by the water district’s attorney,” Pohlson said.