Water Official Admits Extortion

A board member of one of the state’s largest water districts pleaded guilty Monday to extortion and money-laundering charges, and agreed to cooperate with federal authorities in a wide-ranging corruption probe.

West Basin Municipal Water District Director Tyrone Smith is the 11th defendant to plead guilty since the FBI began investigating corruption in Carson three years ago.

The Carson-based West Basin district serves nearly 1 million residents in southwest Los Angeles County and other areas. The agency came under scrutiny this summer after several Carson officials pleaded guilty in a bribery scandal, and agreed to assist in the water district probe.

Smith, a five-year board member who represents Inglewood, pleaded guilty to charges stemming from a scheme to extort $25,000 two years ago from a New York-based investment banking firm, M.R. Beal & Co.

Smith, who entered his guilty plea in a federal courtroom in downtown Los Angeles, faces a potential 24- to 30-month prison term. That sentence could be reduced if Smith “renders substantial cooperation,” said Assistant U.S. Atty. John Hueston, the government’s lead prosecutor.

“We have been successful in turning government cooperators into witnesses in new cases,” Hueston said. “This 11th plea is yet another significant development, and we are hopeful that we will develop new leads in our corruption probe.”

Smith’s defense attorney, Robert Ramsey, declined to comment.

Smith, who was charged in late July, is expected to resign from his water district seat Friday under terms of the agreement. He pleaded guilty to seven extortion, conspiracy and money-laundering counts, all felonies. Two mail fraud charges were dismissed, the prosecutor said.

In 2001, Smith extorted $25,000 from Beal, the investment banking firm, in exchange for his vote to let Rice Financial Products Co. refinance $140 million of the district’s debt. Beal, who represented Rice, stood to earn $250,000 from the arrangement, according to the indictment.

The investigation’s remaining defendant is West Basin Director R. Keith McDonald, the son of Rep. Juanita Millender-McDonald (D-Carson). He is charged with extorting kickbacks from contractors doing business with the water agency. He also is charged in a separate alleged scheme with extorting tens of thousands of dollars from a bus company seeking a contract extension from Carson.

In that case, McDonald allegedly ferried bribe payments to three Carson City Council members who have since acknowledged receiving them, and are expected to be witnesses at his trial.

Smith is expected to cooperate in the McDonald case, Hueston said. McDonald’s trial is scheduled to start in March.