Riordan Backed DWP Contract for Ally Alatorre

Former Mayor Richard Riordan early this year pushed the Department of Water and Power to give a consulting contract to his longtime ally Richard Alatorre, a pact that paid him $15,000 and continued even after he pleaded guilty to felony tax evasion in a federal corruption probe, according to records and interviews.

Alatorre, who is expected to be sentenced next week, is still owed thousands of dollars more. The city’s financial watchdog is threatening to block the remaining payment because the DWP has not produced records showing what Alatorre did for the money.

The former lawmaker, who was a powerful assemblyman before winning a City Council seat in 1985, decided not to seek reelection two years ago amid the corruption investigation.

He was hired in March partly to help the DWP collect $190 million for emergency power it sold to help the state keep the lights on during the darkest days of the electricity crisis. The city has yet to collect the money.

A month after he signed his contract, Alatorre pleaded guilty, admitting that he failed to report almost $42,000 he received from individuals attempting to influence him in his official duties.

His DWP contract continued until the end of May.

The deal could prove an embarrassment as Riordan gears up for a possible gubernatorial run. The former mayor’s critics have already attacked his administration’s hiring of a consultant who had been caught up in the Clinton administration’s Whitewater scandal.

Riordan is out of the country on vacation, but former Deputy Mayor Ben Austin confirmed that the DWP hired Alatorre after he was recommended by Riordan. However, Austin stressed, it was the DWP that was responsible for supervising Alatorre.

“This contract,” he said, “was not with the mayor’s office.”

S. David Freeman, the former general manager of DWP, disputed that point. Although Alatorre’s contract was with the DWP, Freeman said, as a practical matter, Riordan’s office coordinated the ex-councilman’s activity.

“He wasn’t working for me,” said Freeman, whose relationship with Riordan was strained at the time. “We were funding a person that the mayor wanted to hire.”

Freeman recalled a meeting early in the year in Riordan’s City Hall office with the mayor and Alatorre, in which the ex-lawmaker’s role was discussed. He said he didn’t object to the consulting deal because of Alatorre’s Sacramento ties.

“The mayor directed us to employ Mr. Alatorre,” said Freeman, who is now the head of the state’s new public power authority and a top energy advisor to Gov. Gray Davis.

The amount of the contract, up to $95,000, fell just below the threshold that would have required the City Council’s approval, City Controller Laura Chick said.

When Alatorre pleaded guilty, Freeman said he told a top assistant the utility needed to reconsider its Alatorre contract. “I did say, ‘We can’t just keep this up,’ ” he said. However, Freeman acknowledged that he never followed up and left the DWP shortly afterward.

“I did not feel any obligation to follow up because he wasn’t working for us,” Freeman said.

Austin said he did not know whether Riordan played a role in terminating Alatorre’s contract.

Austin also discounted the significance of the controversy on Riordan’s possible gubernatorial run.

“The mayor navigated Los Angeles through very treacherous waters in the energy crisis,” Austin said.

Alatorre declined to discuss the contract Monday. “There is nothing to talk about,” he said.

At the time he was hired by DWP, under a contract that required him to be available on a full-time basis, Alatorre already had a $9,500-a-month political appointment on the state Workers Compensation Appeals Board. It is unclear what Alatorre did to earn his DWP fees. An agency spokeswoman said Alatorre submitted no written summaries of his activities, instead giving verbal updates to a DWP official.

Chick said she wants more evidence of the work performed by Alatorre.

“I have no intention of cutting checks on the invoices until I get the documentation,” said Chick, noting that a $7,500 payment request is pending. Among other things, Chick has demanded records showing what the ex-councilman was supposed to do, what he accomplished and how his contract was supervised.

“If they can’t answer those questions,” Chick said, “the contractor doesn’t get paid. Period.”

DWP spokeswoman Lucia Alvelais said the deal was put together jointly by Riordan, Freeman and City Legislative Analyst Ron Deaton. All were “part of the decision to enlist Mr. Alatorre’s services,” she said.

At the time, state officials were criticizing the DWP for allegedly overcharging the state for electricity. Some officials were threatening to limit what the agency could collect and even to seize the utility’s power lines. “We needed assistance. . . . Mr. Alatorre is very well-connected in Sacramento,” Alvelais said.

Asked to describe what Alatorre achieved, Alvelais said he provided “strategic assistance” and cited a telephone call he set up between DWP and state officials in charge of power buying to discuss faster payments for electricity.

Alatorre is expected to be sentenced Monday under a plea agreement to eight months of house detention, during which he’ll wear an electronic surveillance device.