DWP board laughs as it adds up cost of DWP corruption
because the joke is on us
The news came and went, buried at the end of another 47-hour LADWP board meeting that touched on things like planting trees. On April 12, the Los Angeles Department of Water and Power revealed the financial damage caused by the DWP billing fracas over the past 10 years. There was no press release, no news stories.
Instead, the number—$122 million—was presented by a board financial auditor in hushed tones and mundane spreadsheets. The board called for an accounting of fees once DWP criminal action started dropping at the end of last year. It so far has engulfed DWP’s former general manager, security specialist, and two attorneys. The board’s accounting includes no-bid contracts, attorney’s fees, consulting, and investigation costs, but leaves out a bunch of other expenses (more on that below).
And after the board was briefed, it had a nice laugh.
“That’s a lot of money,” said board president Cynthia McClain-Hill, nervously laughing as she scrolled on her computer. “We don’t see numbers this big.”
Commissioner Jill Banks Barad-Hopkins, also laughing said, “That’s not just chump change.”
I was laughing too, because both those board members had a direct hand in the cost of DWP corruption, but they don’t wanna talk about it. They both voted for bogus, multi-million dollar no-bid contracts awarded to companies run by Paul Paradis, the city’s former lawyer who is awaiting sentencing for a federal crime.
Barad-Hopkins, a nice lady who looks like she trashes her grandchildren while holding court in between board meetings at an English tea house, was part of a unanimous vote in favor of the $30 million Aventador contract in 2017. She also voted for the initial Paradis Law Group contract to “remediate” DWP. And her most recent work includes holding a fundraiser for Paul Koretz’ city controller campaign, an apparent violation of city ethics laws.
After the shady news came out that Aventador was awarded these contracts, they were canceled, although most of it already paid out. Aventador then changed its name to Ardent, but the city kept paying it some $4 million dollars. In April 2019, McClain-Hill and Barad-Hopkins both voted to approve an Ardent contract.
Remember, this is a company that had no expertise in the job it was hired to do—information technology—and very similar work was already being done by Oracle and Bender Consulting. So why was it hired? It was a thank you from DWP and the city attorney’s office to Paradis, their boy on the inside. As the special master’s investigation noted:
The apparent answer for hiring Mr. Paradis was that the city’s upper management wanted to reward Mr. Paradis for the outstanding job he had done in staging the sham Jones lawsuit to make the DWP’s political problems disappear as well as attempt, by backdating those lucrative contracts, to create a baseless claim of attorney-client privilege to wall off any efforts by PwC to uncover the inner workings of the DWP’s billing errors.
McClain-Hill went on to comment on the $122 million figure.
“These costs remain a small overall impact on the department’s overall operating capacity…and our multiple failures with respect to the impact and our huge mistake of not listening to the internal voices that said ‘slow down,’ and the tragic mistakes made both from an oversight and also significantly from the perspective of the city attorney’s management of this litigation, and the resulting impact on the reputation of the department…remain in calculable,” said McClain-Hill.
Wow, that’s a really long sentence.
The $122 million figure, it should be noted, is how much ratepayers have so far paid for the DWP mess. It is not a global amount of the corruption, from the misfired billing system suit on down to the suckhole of no-bid contracts to hiring even more attorneys. It does not include the $67 million Jones settlement in which the city had to pay back ratepayers, an additional $39 million in back-billing, and $2.5 million in city sanctions over how the city handled the case. There is also litigation the city is involved in on the federal court level, and anticipated litigation once Mike Feuer is out of office. As one person told me, related litigation will keep grinding on. The amount will be well over $200 million, according to a tally I did with Consumer Watchdog.
But there are some notable line items in the board’s tally that we previously didn’t know about. A total of $10.2 million for 19,000 billable hours is going to the law firm Ellis George Cipollone O'Brien Annaguey LLP, which came in during the 4th quarter to cover up for Feuer’s disaster in handling these cases. The firm’s name partners include Eric George, whose father is a former State Supreme Court Justice, and former Trump advisor Pat Cipollone. So Mike Feuer is represented by a firm that has five former Trump officials. The Left is the Right. The city attorney’s office has over 500 attorneys who were available for the job, but Feuer had us pay $10 million so George could defend Feuer’s political future. And now Feuer is polling at 2 percent. What a sick investment.
The Liner Firm, which previously represented the city, racked up $3.7 million in fees for 10,000 hours of work. Other fees include a total of $17.8 million to KCC Class Action Services LLC. The board couldn’t even come up with the number of billable hours for the city’s fake attorney for the ratepayers, probably because he didn’t do anything except read a few emails he was CC’d on. That guy collected $10 million. He’s dead now.
No one is really covering the DWP board. And how could you blame people? The board, which is appointed by the mayor, just gives each other awards and waxes poetic on the lunar new year. But it’s a diverse, all-female board, so nothing to see here. And so the grift carries on.