A city auditor was investigating DWP contracts. She says she was warned not to be ‘thorough’
As a high-level government auditor, Beth Kennedy has investigated or reviewed the spending of many city of Los Angeles departments without serious incident, she says.
But now, Kennedy, a chief internal auditor for City Controller Ron Galperin, is alleging that she was warned not to delve too deeply into controversial contracts awarded by the Department of Water and Power, according to a legal claim she filed against the city last month.
In her claim, she says city officials failed to protect her after she began investigating several contracts, including a $30-million, no-bid consulting contract to fix the DWP’s billing system — an agreement that is now under scrutiny by the FBI.
Kennedy claims that a superior in her office told her in May that, for personal safety reasons, she should “not be as thorough” with her audit. Then in June, someone smashed a glass patio door at Kennedy’s home in Orange County, according to La Habra police.
In an interview with The Times, Kennedy said she believed that the break-in was intended to harm or intimidate her because she was investigating the DWP contracts. No items were taken from her home, she said.
Jose Rocha, a spokesman for the La Habra Police Department, said investigators had identified no suspects and the motive for the crime was unknown. He said it was unclear whether there’s a link between the incident and her work for the city.
In a statement to The Times, Bob Wingenroth, the superior Kennedy referred to in her complaint, who is the director of auditing for the city controller’s office, said Kennedy misrepresented their conversation about the DWP contracts. He said his words were “given in the spirit of continuing to move forward with an audit in an environment of concern. Ms. Kennedy was worried about beginning to do field work at the Department of Water and Power because of issues unrelated to this audit.”
Wingenroth declined to describe the “issues.” But he said he told Kennedy and other staff to move forward with the audit “in a time-efficient and professional manner.”
Ian Thompson, a spokesman for the controller’s office, added that “our office has always vetted each and every complaint we’ve received about the DWP in a proper and responsible way.”
City Atty. Mike Feuer’s office declined to comment on Kennedy’s claim, which was filed Aug. 12. Claims are typically submitted to the city before the filing of a lawsuit and are lodged to preserve a claimant’s right to sue.
Kennedy’s filing seeks damages of $450,000. She said in her claim that she had spent thousands of dollars to secure her residence following the June 10 incident, which left her and her children traumatized.
She said she didn’t know who broke into her home, but her claim cites the FBI investigation into the DWP contracts and Wingenroth’s alleged comments. It also alleges that the city placed her in a dangerous situation.
“The city should have hired an outside investigation firm or auditing firm or contacted LAPD commercial crimes division” to review the DWP contracts, her claim says.
A 16-year employee of the city, Kennedy formerly worked at the Los Angeles Police Department, including in the inspector general’s office.
Kennedy’s allegations are the latest in a widening scandal that has ensnared the city attorney’s office and the DWP.
The FBI raided the utility on July 22, seeking documents related to cybersecurity issues and contracts, including one with Aventador, a Santa Monica consulting company. David Wright stepped down as the DWP’s general manager the next day.
Wright and Los Angeles Mayor Eric Garcetti’s appointees on the DWP board supported the Aventador agreement in 2017, despite warnings from the head of the utility’s contracting division that the contractor’s rates were neither fair nor reasonable. The contract was needed, city officials said, to fix the utility’s billing system after hundreds of thousands of customers were overcharged.
Paul Paradis, the owner of Aventador, also had been working in 2017 for the city attorney’s office. He was later accused by an outside consulting firm of concealing from the court his role in a lawsuit against the city over inflated bills from the DWP. Through his attorney, Paradis earlier this year denied wrongdoing.
Attorneys for Paradis didn’t respond to a request for comment about Kennedy’s claim. A representative for Aventador and its successor company, Ardent, also didn’t respond.
Her claim states that the controller’s office ignored “several significant complaints” about the Aventador contract dating back to 2017, including allegations of contracting fraud by the DWP’s executive management.
But the “management decided that instead of doing an investigation, we would let DWP’s executive management provide an official response to the allegations, which we never received,” the claim says. “They were never responsive, which is a red flag of fraud.”
Then, in May 2019, Kennedy was assigned to look into agreements awarded to Aventador and Ardent.
She was warned by Wingenroth that she should “not be as thorough” in her review, according to her claim. In the same conversation, her claim says, Wingenroth mentioned a DWP whistle-blower who had later died in an accident.
Kennedy alleges that Wingenroth told her that the whistle-blower’s death was “basically murder.” He warned her to be careful in doing her review and told her be “in and out,” the claim says.
At a June 10 meeting with DWP managers, Kennedy and her staff asked about the handling of those contracts. That night, her home was broken into, her claim states. She said she heard noises downstairs, opened her bedroom door and saw flashlight beams shining up the stairwell. The intruders fled when she yelled out, her claim says.
LAPD spokeswoman Rosario Cervantes said there was no criminal investigation into the death of the DWP worker that Kennedy alleges Wingenroth referenced. DWP spokesman Joe Ramallo said the utility was unaware of any connection between Kennedy’s claim and the death of a DWP employee.
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