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Editorial: Another scandal? Is anyone running Los Angeles City Hall?

Two men wearing jackets with the word FBI leave a multi-story building
FBI agents leave the downtown headquarters of the Los Angeles Department of Water and Power after serving a search warrant in July 2019.
(Al Seib / Los Angeles Times)

It can be hard to keep up with all the scandals emanating from Los Angeles City Hall these days, with its various indicted City Council members and ongoing federal investigations into corruption and self-dealing.

This week, the dirty laundry comes from the Los Angeles Department of Water and Power. A lawyer hired by City Atty. Mike Feuer’s office in late 2014 to deal with the utility’s overbilling debacle pleaded guilty to bribery in a kickback scheme that involved a sham class-action lawsuit ostensibly on behalf of ratepayers. As part of the plea agreement, lawyer Paul Paradis also admitted he’d bribed the former DWP general manager and a former DWP commissioner.

Paradis’ case is the first, but probably not the last, to come out of the federal investigation into the DWP billing system fiasco and the subsequent legal shenanigans. The FBI is still investigating, and Paradis is cooperating, according to the U.S. attorney’s office.

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But whether or not charges are filed, Paradis’ plea agreement raises big questions about Feuer’s role. Feuer, who is running for mayor, hired Paradis and was ultimately responsible for overseeing his office’s management — and mismanagement — of the DWP case. It’s also a strike against Mayor Eric Garcetti’s record. He ran in 2013 on the promise of reforming the DWP and protecting ratepayers, but two of his appointees are accused of scheming to accept bribes from Paradis in exchange for backing a $30-million no-bid contract to his company.

All of this began in 2013, when the DWP rolled out a flawed computer system that produced wildly inaccurate bills that collectively overcharged ratepayers by tens of millions of dollars and saddled them with unwarranted penalties.

The city attorney’s office hired Paradis to go after PricewaterhouseCoopers, the firm that oversaw the launch of the billing system. At that time, Paradis was also representing a ratepayer who had filed a claim against the city for overbilling charges, the plea agreement said. Unbeknownst to the ratepayer, Paradis recruited a lawyer from Ohio to take over the class-action lawsuit as part of a plan to quickly settle customer complaints in a manner most favorable to the DWP. At least one senior member of the city attorney’s office was present as the plan was hatched, according to prosecutors.

Meanwhile, Paradis made a secret kickback agreement with the Ohio lawyer to receive 20% of any attorney fees from the case, which worked out to $2.2 million that was funneled to Paradis through shell companies, prosecutors said.

Feuer has said he directed his office to sever ties with Paradis when he learned of suspected improprieties in 2019 — several years after observers raised red flags about the class-action lawsuit and settlement. He said in a statement that he is “beyond outraged that anyone would breach their duties to the public we serve.”

Paradis created a company called Aventador Utility Solutions to continue working with the DWP. In his plea agreement, Paradis said the DWP general manager at the time — who was David Wright, though he has not been named or charged by prosecutors — would work to pass a $30-million no-bid contract with Aventador in exchange for a job with the company when he retired from the utility. Wright would receive an annual salary of about $1 million and a new Mercedes SL 550 as his company car, according to the plea deal. Paradis also said he did free legal work for a former DWP commissioner to win approval for the contract. The commissioner, Bill Funderburk, denies any wrongdoing and has said he acted honorably.

The DWP billing system has been a case study in botched decision-making and government bungling from Day One. Now it’s another example of how corruption has been allowed to fester and grow within city government. Feuer and Garcetti, as well as City Council members who have oversight responsibility, need to account for how this corruption was allowed to happen under their watch and what they’re doing to make sure it doesn’t happen again.


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