report: LADWP litigation was collusion and Feuer's office covered it up
the long-awaited investigation lays out a largely circumstantial case against the mayoral hopeful and his knowledge of the matter.
Trigger warning: this post contains lots of boring and sometimes confusing corruption allegations. But that’s exactly how it was designed to be. That's how corruption works.
Two years and apparently almost $4 million dollars later, a long-awaited investigation into the handling of the controversial Los Angeles Department of Water & Power litigation has determined that collusion took place, and that attorneys in City Attorney Mike Feuer’s office directed it and then covered it up.
The nearly 600-page, court-appointed special master’s report filed Tuesday by former federal prosecutor Edward M. Robbins outlines a number of ethical violations by public and private attorneys involved in the ratepayer litigation that is currently under an FBI probe. And it said lawyers for the city knew about the dual representation of a utility customer as part of a “spin and sue” plot to actually sue itself. Meanwhile, the scheme was kept hidden from the judge in the matter, the report said.
Key among what was withheld from Judge Elihu M. Berle include conflicts of interest between outside city counsel Paul Paradis, and his client Antwon Jones. The report says Jones “unknowingly” retained Paradis.
“It was critical for the city to conceal the fact that the city was, in substance, suing itself in the Jones v. City civil action,” stated the report.
The report largely confirms what has already been reported and offers no smoking gun evidence that Feuer, a mayoral hopeful, directed a strategy in which the city colluded with attorneys for utility customer Jones to manufacture a sham settlement in order to take control of a public relations fallout from a 2014 billing fiasco.
Instead, the report lays out a largely circumstantial case against Feuer, saying as the top manager of lawsuits involving the city, Feuer knew about at least some of the strategy to make the billing issue go away.
The city hoped to do three things, according to the investigation: shift blame in the media to Pricewaterhouse Coopers (PwC), which helped with consulting for the new LADWP billing new system, sue them, and make other lawsuits the city was facing over billing go away.
The report said Feuer, his deputy Jim Clark, and other figures at highest levels of the city attorney’s office “all knew most or all of this three-part plan.”
The original plan was get the attorneys suing the city to drop their suits and use Jones as a vehicle to sue PwC, which Feuer signed off on. But that plan fell through due to conflicts of interest, the report outlined. What ended up happening was the city used Jones as a plaintiff, who would instead sue the city, using a lawsuit drafted by Paradis, the city lawyer, in order to quickly settle the lawsuit, according to the report.
The report describes the conduct in the case as “collusion” but said it couldn’t find information showing Feuer greenlit plan B.
Further, the evidence produced by the city was virtually absent of any communications reflecting Feuer’s knowledge of Jones, other than being advised by his deputy Clark that a settlement existed.
The extent of Feuer’s knowledge of Jones was hampered by lack of evidence, which “arguably was a direct result of the fact that Clark was tasked by Mr. Feuer with overseeing the ratepayer class actions,” said the report. In his deposition, Feuer testified he had little or no memory of the details of his knowledge of the billing cases, and that he largely delegated his duties to Clark, his number 2.
Clark said he destroyed or kept no notes of his Feuer briefings about “significant” matters, and did not recall if he spoke about Jones to Feuer, according to the report.
But the report suggests Feuer was more than just ambiently aware of the developments in the litigation. Chief among the reasons cited by the special master was a phone call by San Diego attorney Tim Blood six years ago telling Feuer the settlement was a problem. As the leader of maybe the largest public law firm in the country, Feuer is supposed to give final approval to the city’s litigation strategy.
It’s also important to note the city over the past few months has fought in court to stop the release of this report.
Jamie Court, president of Consumer Watchdog, called the report “devastating” for Feuer and those attorneys accused of ethical violations.
“Until Mike Feuer comes clean about what he knew and why these guys weren’t supervised, and what he didn’t know, it just says ‘coverup,’” said Court, who added the state bar of California must take action.
“In a post-Girardi world this cannot be a whitewashed investigation,” said Court. “There is a big cloud hanging over Mike Feuer and the State Bar has to investigate and get to the bottom of this.”
Fuer’s office didn’t respond to a request for comment. Nor did Paradis’ counsel.
The city’s argument weeks after I started writing the story has not been to deny something went wrong, but instead to cast blame on the attorneys it hired: Paradis and prominent Beverly Hills attorney Paul R. Kiesel.
“Despite the city’s public assertion that Mr. Paradis and Mr. Kiesel, without the knowledge of anyone in the city, went ‘rogue’ in the handing of the Jones v. City complaint to Mr. [Jack] Landskroner and Mr. [Michael] Libman, the evidence supports a finding that the city directed and assisted in the city suing itself with a sham lawsuit,” said the report.
The report said Paradis, Kiesel, Landskroner and Libman violated ethical rules against “dishonesty, deceit, and collusion,” and violated their ethical duties to Jones and the court in violation of rules and professional conduct
The report laid out the following findings:
Paradis and Kiesel had “an inherent conflict of interest in representing Mr. Jones regarding his complaint about billing by DWP.” And none of them told Jones they were also representing the city. They didn’t get a conflict waiver from Jones.
A number of attorneys for the city knew Paradis and Kiesel were repping Jones yet did not mention to the judge.
The city and its private attorneys knew that the attorney fees, which went from $13 million to $19 million, were “excessive, unjustified and a misappropriation of taxpayer funds.”
And the report also lays out the following for its case for collusion:
The city gave Paradis non-public data to be incorporated into the settlement.
Paradis gave the draft Jones v. PwC lawsuit to the city without permission from Jones.
City knew Paradis was drafting a second complaint because they referenced a “second complaint.”
Lawyers involved used the terms “White Knight” in referencing Jones.
The speed of the settlement offer, which was filed a day after the Jones lawsuit was filed.
Fee agreements were in place before the settlement of claims.
Clark changed his testimony over 50 times.
The participation of city attorneys and outside counsel covering up facts of both cases, “which demonstrates consciousness of guilt as they would not have been motivated to lie to the court unless they knew they had something to hide.”
A “remarkable” absence of communication among the city attorneys in response to the filing of the lawsuit.
The city “staged” a mediation so the lawsuit would appear adversarial.
Landskroner repeatedly lied to the court, falsely claiming he drafted the complaint, the settlement letters, when in fact Paradis did.
Jones never signed anything to hire Kiesel or Libman. Jones never met or spoke with Kiesel until over two years after settlement. Kiesel is a former president of the Los Angeles County Bar Association.
“The special masters’ report confirms it was the city of Los Angeles that directed, managed and controlled all of the litigation,” said Kiesel in an email. “While I agree with many of the conclusions of the Special Master, he completely missed the mark when it comes to Kiesel Law. Kiesel Law was never retained by nor represented Mr. Jones. As the report points out Mr. Jones testified he did not retain, nor did he understand he was retaining, Mr. Kiesel or Kiesel Law, to represent him at any time.”
Over the course of litigation, Paradis and Landskroner obtained “tens of millions of dollars for their own financial gains” and later both pleaded the Fifth Amendment, according to the report. The report also highlighted multi-million-dollar contracts Paradis concurrently secured from the city to fix the billing problem.
Additionally, the investigation noted a paper trail was not completed because it did not want to overlap with an ongoing federal investigation into the matter…
Anyway, if you slogged through this, I promise some just-as-depressing-but-way-funnier content coming your way soon.