Water Official Convicted of Fraud Charges

The former head of a public agency that provides water to nearly a million Los Angeles County residents was convicted Friday on federal bribery, money laundering, fraud and conspiracy charges.

R. Keith McDonald, who served as president of the West Basin Municipal Water District board, was found guilty of receiving $30,000 in kickbacks in exchange for the awarding of a multimillion-dollar pipeline contract.

The jury also found that he funneled $15,000 in kickbacks to three members of the Carson City Council in exchange for their votes on a municipal bus contract.

McDonald, a 40-year-old professional football player turned venture capitalist, is the son of Rep. Juanita Millender-McDonald (D-Carson). The congresswoman, who attended the trial in Santa Ana federal court, was not implicated in the corruption case.

After deliberating four days, the jury returned a split verdict, convicting McDonald on 10 criminal counts, but acquitting him on three others. The panel deadlocked on eight remaining charges. U.S. District Judge Alicemarie H. Stotler set sentencing for Feb. 14.

McDonald’s prosecution was an outgrowth of a sweeping federal probe into official corruption in Carson. He is the 12th person convicted and the only defendant to stand trial. The others pleaded guilty to a variety of corruption charges.

Three of those defendants -- former Carson Mayors Daryl Sweeney and Pete Fajardo and former Councilman Manny Ontal -- testified against McDonald, telling jurors that he gave them envelopes stuffed with $5,000 in cash in exchange for their votes to renew a municipal bus service contract with Transportation Concepts Inc. of Irvine.

Most of the charges against McDonald revolved around his activities as president of the West Basin board. The water district serves residents in 17 communities, including the South Bay beach cities, the Palos Verdes Peninsula cities, Carson, Hawthorne, Gardena, Malibu, Culver City, West Hollywood, Ladera Heights, Lennox and Inglewood.

With a $100-million annual budget, the board purchases water from the Metropolitan Water District and resells it to local water companies. West Basin also recycles sewage for industrial use and awards multimillion-dollar contracts to build pipelines as well as recycling and desalination plants.

Prosecutors said McDonald did not directly accept extortion payments but instead funneled them through firms controlled by associates and business partners. He then fraudulently claimed that those companies employed him as a salaried consultant, according to the indictment that was returned by a federal grand jury in July 2003.

Besides receiving the $30,000 in kickbacks, McDonald also demanded a $50,000 contribution to his unsuccessful state Assembly campaign from a political consulting firm that represented the district, the jury found.

A fellow board member, Tyrone Smith, 47, of Ladera Heights, was indicted with McDonald. He pleaded guilty to charges stemming from a scheme to extort $25,000 from a New York-based investment-banking firm and agreed to cooperate with the government.

McDonald, who lives in Carson, did not testify during his trial, but his attorney, John Potter, attacked the government’s witnesses, contending that some were lying in order to curry favor with the prosecution in hopes of receiving lenient sentences.

Potter told jurors that his client did not exchange his vote for cash on any of the water district contracts or influence the outcome of any voting.