MWD Chairman’s Political Fund-Raising Questioned

The chairman of the Metropolitan Water District used his government position to solicit campaign dollars for an influential Democratic lawmaker from consultants who have contracts with the giant water agency, records and interviews show.

In late June, on stationery bearing the official name and seal of the MWD, board Chairman Phillip J. Pace sought thousands of dollars in contributions on behalf of Assemblyman Bob Hertzberg (D-Sherman Oaks), a popular legislative leader viewed as the front-runner to succeed Antonio Villaraigosa (D-Los Angeles) as speaker.

The letter invited recipients to serve as co-sponsors of a July 15 fund-raiser Pace was hosting for Hertzberg by making contributions of $500. It suggested that checks be made payable to Hertzberg’s political committee and “mailed to Phillip J. Pace, chairman MWD board of directors.”

Among those receiving the letter were companies and individuals who have contracts with the agency. Several confirmed that they had received the solicitation but asked not to be identified.

Almost immediately, the solicitation prompted an anonymous complaint to the Fair Political Practices Commission, the state’s ethical watchdog, and criticism from some other members of the board.

The writer of the complaint was identified only as a consultant who held a contract with the MWD and was angered at being asked by the head of the agency’s board of directors to make political contributions.

“I feel threatened by this letter and I believe they are keeping track of who responds and who doesn’t,” the contractor wrote the FPPC.

A spokeswoman for the watchdog agency said all complaints are confidential, and she could not confirm that the FPPC had received the complaint or that it was being investigated.

A spokesman for Hertzberg said the assemblyman was on a cruise in the Mediterranean and would be unavailable for comment. Hertzberg does not have to report the contributions he received until next January.

Pace declined to be interviewed. But a spokesman for the MWD said the chairman had sought legal advice from the MWD’s general counsel, Greg Taylor, and his private attorney, former state Sen. Charles Calderon, before he sent the letter.

Adan Ortega, executive assistant to the general manager for external affairs, said the chairman was not a paid employee of the agency and had not used MWD staff to help prepare the political solicitation.

“That is something that he did and he obviously did it with advice through his own resources,” Ortega said.

He noted that the request for campaign funds was not written on official MWD stationery--Pace had his own letterhead printed, reading “Metropolitan Water District of Southern California, Phillip J. Pace, chairman board of directors,” and carrying the seal of the agency. A notation at the bottom of the solicitation said, “Not printed or mailed at public expense.”

Taylor said the chairman had shown him a copy of the proposed letter and he had advised Pace that there would be no problem as long as it was clear that it had not been paid for out of public funds. “I know of no law that was violated by what he was doing, at least in the use of the stationery,” Taylor said.

He said the chairman did not tell him who would be the recipients of the letter.

Even so, some other board members called Pace’s actions unusual and improper.

“[Pace] is actually utilizing the office of MWD and its corporate persona,” said Mark W. Watton of San Diego, a frequent critic of the agency. “It’s kind of like pulling people over on the freeway with a fake badge and a red light. . . . The whole thing is just a sordid affair . . . and I think it’s unfortunate.”

Watton said the letter was mailed only a few weeks before the board voted unanimously to establish an office of ethics and endorse a bill by state Sen. Tom Hayden (D-Los Angeles) that would require the MWD to adopt certain rules of behavior.

One rule required by the measure says officials should avoid potential ethical abuses created by “the solicitation of campaign contributions by board members, officers or employees and the receipt of contributions from bidders, contractors, or subcontractors.”

“It was just real odd that we were sitting around the room discussing the office of ethics while I knew we all knew the chairman had sent out this letter,” Watton said.

Another board member from San Diego, Francesca Krauel, described her delegation to the MWD board as being concerned about the chairman’s action. “I think that it’s at best highly improper,” she said.

A legal memorandum prepared for the delegation by Daniel Hentschke, general counsel of the San Diego County Water Authority, said it is generally proper for public officials to engage in political activity as long as they do it as private citizens.

But the memo added that “there is a question of whether Mr. Pace’s conduct can ultimately be attributable to MWD or instead constitutes the unauthorized use of MWD’s identity and Mr. Pace’s office for private purposes.”

Tom Graff, senior attorney for the Environmental Defense Fund, read excerpts from the solicitation letter at a recent hearing to show what he called contradictory messages from MWD officials.

He said the MWD had argued against the use of its aqueduct by other agencies, contending that it had such an abundance of water that it had no room for any more. But then, he said, in the solicitation letter, Pace asked contributors to give to Hertzberg’s campaign because the assemblyman would help the district cope with its water shortages.

As chairman, Pace heads a 51-member board that oversees an agency that provides nearly 60% of the water used by 16 million people in six counties. The MWD, which imports water from the Colorado River and Northern California, has a 5,200-square-mile service area, including most of urban Southern California.

Pace, a developer from Montebello, has been chairman since late last year.