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Wednesday, March 27, 2024 | Back issues
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Ex-official in LA city attorney’s office takes plea deal in DWP scandal

Thomas Peters is the fourth city official to plead guilty to charges emanating from the Department of Water and Power's billing debacle and subsequent scandal surrounding its litigation.

LOS ANGELES (CN) — A former senior official in the Los Angeles city attorney's office agreed to plead guilty Monday to one federal count of aiding and abetting extortion.

Thomas Peters, 55, admitted he threatened to fire a plaintiff's attorney from a special counsel job unless the attorney paid a $1 million extortion demand to another lawyer who was threatening to expose a scandal.

Peters is the fourth official thus far to plead guilty to charges arising from the Department of Water and Power billing debacle and its aftermath, following former DWP general manager David Wright and David Alexander, a former cyber official at the water agency, and an attorney contracted to work for the DWP, Paul Paradis. Peters, who ran the city attorney's civil litigation division for five years between 2014 and 2019, is the first figure from the City Attorney's office to be implicated in the scandal. His plea agreement indicates that other city attorney employees were complicit in his behavior.

Peters' attorney did not respond to requests for comment.

The DWP's fairly inscrutable billing scandal has been unfurling in slow motion for almost a decade, dating back to 2013 when the water agency implemented a new billing system. A disaster from the start, the system overcharged thousands of ratepayers while undercharging others.

Ratepayers sued, and the DWP sued the outside vendor who designed the new billing system, PricewaterhouseCoopers. In the latter suit, the DWP hired two outside attorneys — Paul Paradis and Paul Kiesel. But Paradis had another client: Antwon Jones, a ratepayer who was suing the city, a clear conflict of interest.

The Justice Department has asserted in previous court filings that the city attorney's office knew about this double dealing. Paradis would later be replaced by an attorney from Ohio in the Jones lawsuit, but would still involve himself in it and in fact was paid a $2 million kickback when the case settled.

The city initially tried to convince plaintiffs suing the DWP to join the city in suing PricewaterhouseCoopers but abandoned the strategy.

In his plea agreement, Peters acknowledged learned that a recently terminated employee of Paul Kiesel had "stolen or improperly retained" certain incriminating documents showing the city's "collusive litigation." The terminated employee is identified in the plea deal as a woman, "Person A."

"Person A had demanded over a million dollars from Kiesel," according to the plea agreement. She threatened to reveal the documents, embarrassing the city and scuttling a $67 million settlement with ratepayers. "Peters knew that public disclosure of the information that Person A threatened to reveal would be highly damaging to the reputation of the city attorney's office."

According to the plea deal, Kiesel considered Person A's demands "extortion" and didn't want to pay. Peters ordered Kiesel to do what it took to "resolve the situation" including, if necessary, paying off the unnamed lawyer in exchange for the "sensitive documents." Peters threatened to fire Kiesel as the city's special counsel if Kiesel refused.

Though not explicitly stated, the plea deal implies Kiesel was to pay the bribe with his own money. At one point, it was suggested that the attorney from Ohio "kick in" some of the money since that attorney stood to benefit from the ratepayer settlement.

According to the agreement, Peters kept other "senior members" of the city attorney's office apprised of the situation.

"Peters was directed [by the senior members] to take care of the situation, and he stated that he would do so," the plea agreement says. "Peters feared that if Person A made good on her threats to reveal the sensitive documents, he would be personally blamed for the fallout and would lose his branch chief position and future employment prospects."

City Attorney Mike Feuer blasted Peters in an emailed statement Monday. "I am furious and disappointed beyond words that someone I hired and placed faith in would commit this breach of trust — of the public, of my office and of me personally," Feuer said. "Nearly three years ago I asked for and received the resignation of this individual because of unrelated past conduct, but at no time until today was I aware of Mr. Peters' illegal actions. With his admission of wrongdoing we finally know the truth of what happened."

At a hearing for the city's lawsuit against PricewaterhouseCoopers, Peters watched as Person A tried to give some documents to a court employee, who wouldn't accept them, and then later exchanged business cards with a PricewaterhouseCoopers lawyer. Peters took these actions as Person A doubling down on her threat. After the hearing, Peters texted Kiesel: "I need you to take care of this." Later, when the two met in person, Peters reiterated that Kiesel would be fired if he didn't give in to Person A's demands.

Later that night, Kiesel texted Peters to say that Kiesel had agreed to pay Person A $800,000 for the incriminating documents, after a negotiation. Peters replied: "Good job."

Peters faces a maximum sentence of 20 years in federal prison.

Follow @hillelaron
Categories / Criminal, Government, Law

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