Acting Head of DWP Resigns

The acting head of the Los Angeles Department of Water and Power stepped down Tuesday after Mayor James K. Hahn, saying he wanted a “change of direction,” sought his resignation.

Frank Salas, who had been the municipal utility’s acting general manager since February, oversaw a contract with public relations firm Fleishman-Hillard, which has been accused of routinely inflating its bills.

Salas will return to his former post as the DWP’s chief administrative officer.

“I have always respected the integrity and propriety of the department and its employees,” Salas said in a letter to the commission that oversees the department. “However, recent events have hampered my ability to effectively lead this organization as acting general manager.”

Salas, a career DWP employee who took over after General Manager David Wiggs went on disability leave, did not provide further details.

Hahn said his decision to remove Salas was unrelated to his involvement with the Fleishman-Hillard contract.

“Frank certainly has been with the department for a long time. He’s someone I know takes the job very seriously,” Hahn said. “He’s indicated he intends to retire, so I thought it was a good time to make a change.”

The mayor announced that Henry Martinez, an assistant general manager in charge of power, will become the DWP’s acting general manager effective Monday.

Hahn would not elaborate on what new direction he envisioned for the department.

A Times investigation last week reported that former Fleishman employees said they were encouraged to inflate their monthly billings under the firm’s lucrative DWP contract.

Until the contract expired earlier this year, DWP was paying $3 million a year to improve its public image.

As acting general manager -- and before that as chief administrative officer -- Salas oversaw that PR contract and had been given authority by the DWP commission to approve annual $3-million extensions to the deal on his own, which he did.

The Times also reported last week that Fleishman had hired a friend of Salas’ daughter in late 2002 as he was overseeing an audit that questioned nearly $300,000 in Fleishman billings. Several months after the friend began work at Fleishman, Salas overturned the audit’s finding and allowed Fleishman to keep all but $26,400 of the disputed amount, according to The Times’ report.

DWP commission President Dominick Rubalcava said Tuesday that Wiggs, not Salas, had made the decision to overturn the audit.

Since the Times report, City Atty. Rocky Delgadillo has filed a lawsuit against Fleishman, alleging that the company submitted false invoices while billing the DWP for more than $20 million from 1998 to 2004.

Rubalcava defended Salas and the DWP on Tuesday, saying, if anything, both are victims. “Even the most diligent, focused individual can be the victim of a crime,” he said, pointing out that any overbilling had not been detected either by DWP auditors or the city controller’s office.

City Council members Antonio Villaraigosa and Jack Weiss, who last week called on the city to put in place new measures to prevent mismanagement of contracting, said much more is needed than the replacement of one top official.

“I think the problems at the Department of Water and Power go well beyond one individual,” said Villaraigosa, who is pondering a challenge to Hahn in next year’s mayoral race. “The reports we have heard in the last week continue a troubling practice of mismanagement and fraud and potential corruption in city contracting.”

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Times staff writer Jessica Garrison contributed to this report.