LA's triple agent
LA's triple agent
In new court filings, former city lawyer Paul Paradis says DWP board members and officials close to Mayor Eric Garcetti skirted a bidding process and helped steer contracts to his former company.
Right before I left the Los Angeles Daily Journal I wrote a story about how Paul Paradis, the city’s former lawyer in DWP, was cooperating with the feds in their DWP investigation. And prosecutors told a judge that my story wasn’t true. A year and a half later, we learned from prosecutors that Paradis was in fact working in secret with the federal government practically from the moment the messy DWP saga was made public.
The following story is in collaboration with Knock LA, a nonprofit community newsroom. Thank you Knock for raising up local reporting.
Former City Lawyer Says Garcetti’s Office, DWP Steered Bogus Contracts
In new court filings, former city lawyer Paul Paradis says he was an FBI informant who covertly recorded DWP board members and officials close to Mayor Garcetti.
By Justin Kloczko and Jon Peltz
On the morning of April 18, 2019, Paul Paradis, an attorney who was doing business with the city of Los Angeles, texted Andrew Civetti, an FBI agent:
“Mayor’s office knows about bid rigging to steer Ardent contract and is actively involved in setting pricing strategy. Call recorded. Will call you afterward.”
Ardent was in reference to the DWP cyber security company Paradis was supposed to no longer have a financial interest in after news about the contracts and Paradis’s role in finessing a secret lawsuit against the city came out. Amid the controversy, the city canceled a $30 million no-bid contract awarded to Aventador Utility Solutions and Paradis “resigned” from his role as the city’s private counsel.
Aventador mutated into Ardent, and Paradis was supposed to transfer his ownership interest.Even though Paradis was apparently removed from the ownership and management of Ardent, Ardent’s California Secretary of State filing listed Paradis as president and sole manager. Ed Robbins, the former federal prosecutor who was hired by a Superior Court judge to investigate DWP, wrote in his report that he “was informed by the city it believes some of those proceeds were paid by Ardent to Mr. Paradis.”
Despite the red flags, officials at the mayor’s office and LADWP still dealt with Paradis and appeared to have helped facilitate multi-million dollar contracts on behalf of Ardent to skirt a competitive bidding process, according to new court filings by Paradis in his Arizona bankruptcy proceedings.
Paradis by this time was covertly working for the FBI and secretly recording a number of city officials, some of whom have since pleaded guilty in the DWP corruption scandal as a result.
Former DWP general manager David Wright recently got a six-year prison sentence for accepting a lucrative job in exchange for pushing Aventador contracts. David Alexander, a security executive at the DWP, faces five years in prison for lying to investigators over accepting a job at Ardent.
When companies in the Southern California Public Power Authority (SCPPA)—a consortium of utility companies—are approving a new contract, it goes through a competitive bidding process where multiple vendors submit proposals to be voted on by the SCCPA board. This vote is later approved by the board of DWP. It is ostensibly supposed to be a fair bidding process, and Alexander admitted to letting Paradis edit Ardent’s Request for Proposal before the SCCPA and influencing voting members.
According to a Public Records Act request, Paradis met with the mayor’s office in 2016 and 2018 regarding “DWP Cyber Security.” Knock LA previously reported that prior to the 2016 meeting, officials in the mayor’s office discussed litigation strategy over private email. Paradis later made a $1,400 donation to the mayor’s campaign in December 2016.
But if Paradis, who will be sentenced for kickbacks he received in the DWP saga, is to be believed, a number of high-level officials were helping Ardent receive lucrative DWP contacts. And despite contract votes not having yet taken place, Paradis’s briefings to the FBI show these officials were confident Ardent, a new company with high rates, would get those contracts.
At the direction of the FBI and federal prosecutors, Paradis said he secretly recorded conversations with former DWP board president and former US Congressman Mel Levine, Cynthia McClain-Hill, who is now the president of the DWP board, DWP officials, and a lobbyist who is also a close advisor to Mayor Eric Garcetti.
Transcripts of those records are in the hands of the federal government, so Knock LA has not been able to independently verify them. Paradis instead provided his take on those meetings to investigators. His credibility is certainly up in the air, as he is facing 10 years in prison and mountains of debt. But it is worth noting that criminal action was taken in response to some of these taped conversations. Paradis also must be truthful if he wants the lowest sentence.
It has been unclear what role, if any, the mayor’s office and other officials had in the sprawling DWP saga. Now, if Paradis’ correspondences with the FBI are to be believed, it goes deep.
On that day Paradis texted the FBI agent—April 18, 2019—the SCPPA gave Ardent the majority of a $17 million contract. But according to Paradis’ court filing, DWP board members and people close to Garcetti knew about the approval beforehand and were involved in setting the price. DWP board members are appointed by the mayor and confirmed LA City Council.
One of those people who knew, according to Paradis, was Josh Perttula, a registered lobbyist with the city of Los Angeles and one of Garcetti’s closest advisors. Perttula is the head of the lobbying firm Kirra LLC, whose clients include Uber, Live Nation, Verizon, and American Airlines. He is also a member of the California State Bar’s Board of Trustees. Paradis said he recorded Perttula on both audio and video, and that Perttula wanted to create the “false appearance” that the contracts being awarded to Ardent and the other security contacts were part of a competitive bidding process.
In a follow-up text to the FBI, Paradis wrote:
“Significantly, Josh also admitted on the video that the mayor’s office and DWP board all have actual knowledge that DWP is using the SCPPA contracting process to create the false appearance that the contracts to be awarded to Ardent and the two other vendors were the result of a competitive evaluation process when they all have actual knowledge that this is not true in actuality.”
Perttula tells Knock LA that "Paul Paradis is a felon who has been convicted of fraud, bribery and illegal kickbacks. He is trying to protect himself by making false claims. I can say without reservation that his allegations about me and what I supposedly knew and confirmed are simply false."
In another text, Paradis said, “both (David) Wright and Josh have now repeatedly admitted on recordings (and Josh on video) that the Mayor’s office, including the Mayor’s Chief of Staff Ana Guerrero and Deputy Mayor Barbara Romero, is actively involved in the fraudulent scheme to award the SCPPA contract to Ardent an [sic] that these two individuals are particularly involved in setting the $ amount of the contract to be awarded because of their ‘concern over the optics.’”
The Office of Mayor Garcetti tells Knock LA that they had no role in the SCPPA process, and that echoed Perttula’s comments on Paradis, saying that “It should surprise no one that a convicted criminal, who has already confessed to defrauding the public for his own personal gain, is extending that fraud with a desperate attempt to deflect blame and minimize his own wrongdoing.
That same month, before the SCPPA and DWP officially voted for the Ardent contract, Paradis texted Civetti, the FBI agent, about Levine and McClain-Hill, according to the filing:
Both Mel and Cynthia stated that Ardent had already been selected by them to perform Cyber Work for LADWP despite the fact that the SCPPA board is only set to vote on April 18th. There are a number of other admissions made by both of them on this call that I believe firmly demonstrate the correctness of the contract bid rigging theory that we have been discussing all week.
Levine’s attorney did not respond to a request for comment.
McClain-Hill provided Knock LA with a statement, saying that “any allegation that I was in any way involved in the so called ‘rigging of the SCPPA contract is patently false” and said that she is assisting the U.S. Attorney’s office in their ongoing federal investigation.
But leading up to the SCPPA’s vote on the contract, Paradis said he met with Perttula again.
Today both Josh and Wright told me that the Mayor’s Office has balked at Ardent receiving that large a cut and are looking to cut the amount awarded to Ardent to roughly the $10+ million range as not to draw attention,” Paradis texted Civetti.
Indeed, when the Ardent contract was ultimately approved by DWP a few days later on April 23, it was for $10.8 million.
On May 21, 2019, Paradis asked Assistant United States Attorney Melissa Mills, who is prosecuting the DWP case, if he should record Stephen Kwok, DWP’s chief information security officer, according to court records.
Mills responded:
“Just confirming that we authorize Paul to go forward with the recorded meeting with Kwok and to assist DWP with the current RFP cyber bid, despite the fact that the RFP process being utilized by DWP may not be compliant with rule, regulations, or laws… We look forward to Paul’s report and recording.”
It was the only reply from the FBI that Paradis provided. Otherwise, it is unclear what the federal government made of Paradis’ briefings. In his filing, Paradis outlined the facilitation of another multi-million dollar Ardent contract with Kwok and Alexander during the summer of 2019.
Stephen Kwok did not return comment to Knock LA in time for publication.
Alexander was the back-channel for $82.5 million Ardent contract before the SCPPA in July, according to Paradis. At the time, three out of five board members had ties to DWP. There were 15 bids, and Alexander scored Ardent’s bid higher and influenced members in order for Ardent to get some of the contract, according to Paradis and Alexander’s plea agreement. In exchange, this was when Alexander asked Paradis for a job at Ardent.
Not long after, the FBI raided DWP.
According to Paradis, DWP officials also expressed not awarding contracts to certain companies for fear those companies would discover multiple DWP regulatory violations dating back to 2007.
“Wright commented that he did not ‘give a fuck about the regulatory issues’ because no one knows about them and no one is looking,” said Paradis in a text to the feds.
Hilariously, Paradis relayed to the FBI, “Wright commented on how he felt there is a general level of corruption that exists at DWP…”
Records from the Mayor’s office show that Perttula set several meetings with Mayor Garcetti’s office between 2013 and 2017. A source with knowledge of the Mayor’s office says that Garcetti and Perttula frequently socialized. Perttula also was in a notorious photo of Garcetti aide Rick Jacobs making an inappropriate gesture at a social gathering.
Perttula later testified in a deposition for Officer Matthew Garza’s lawsuit against the City of Los Angeles, which alleged sexual misconduct in the workplace by Rick Jacobs. Garza’s attorney, Greg Smith, asked if Perttula was permitted as a lobbyist to raise funds for Garcetti. The city attorney’s office instructed Perttula to not answer the question.
I retired from LADWP in 2016. For ten years I had been dealing with high bill complaints. Our group was at the center of correcting billing from the software SNAFU that caused the base problem of this scandal. I had the specific knowledge and know how to correct any customer’s past bills to the penny within 15 minutes. Made a phone call to that law firm offering my services After my retirement. I was told my knowledge was not needed since they had come up with a formula to pay customers. I asked how they would even know if any individual needed a corrected bill. I was told it didn’t matter, anyone claiming to be overcharged would be paid via that formula. In short, they were just a front that had no interest in protecting the other 99% of DWP customers who would be saddled with this bogus pay out.