(CN) — A former lawyer for the Los Angeles Department of Water and Power agreed to plead guilty, on Monday, to accepting an illegal kickback of nearly $2.2 million in a scandal that could have far-reaching political implications for the city.
As part of his plea deal Paul Paradis, 58, also admitted to a completely different bribery scheme involving "multiple LADWP officials, including an LADWP general manager and an LADWP Board member," according to a statement issued by the U.S. Department of Justice.
In 2013, the DWP — the largest municipal water agency in the U.S. — implemented a new billing system designed by PricewaterhouseCoopers. Shortly thereafter, hundreds of thousands of DWP customers began receiving inaccurate bills, some of them massively inflated. Soon, the DWP was facing numerous class action lawsuits filed by angry ratepayers.
In 2014, the City Attorney's Office hired Paradis and another attorney, Paul Kiesel, as special counsels to represent the city in its lawsuit against PricewaterhouseCoopers. In time, the office would learn about another client of Paradis: Antwon Jones, a DWP ratepayer with a claim against the water agency. Jones did not know about this double-dealing.
According to a court filing, Paradis was authorized by the City Attorney's Office to find another lawyer for Jones, one who "would be friendly to the city to supposedly represent Jones in a class-action lawsuit against the city."
"Pursuant to this strategy, the forthcoming Jones v. City of Los Angeles lawsuit would be used as a vehicle to settle all existing LADWP-billing-related claims against the city on the city’s desired terms," the DOJ statement reads.
Paradis found a lawyer — identified in court filings as "Ohio attorney" — to represent Jones in the class action suit. Paradis told the Ohio lawyer that he, Paradis, would write the complaint; in exchange, Paradis would receive 20% of "Ohio Attorney’s fees in the case as a secret kickback," according to court filings.
The Jones class action suit settled in 2017 for $67 million, including approximately $19 million in plaintiffs’ attorney fees. The Ohio lawyer took in $10.3 million. Paradis was paid $2.1 million by the Ohio lawyer, disguised as a real estate investment and funneled through shell companies.
The DOJ claims in a court filing that by January 2015, "members of the City Attorney’s Office were aware that defendant Paradis was simultaneously representing both the City" and the ratepayer.
"I am beyond outraged that anyone would breach their duties to the public we serve, as this plea agreement reflects," said City Attorney Mike Feuer, who is currently running for mayor, in a written statement. In a later email, his spokesman, Rob Wilcox, added: "The City Attorney had no knowledge of any impropriety."
The city dropped its own suit against PricewaterhouseCoopers in 2019.
In the separate bribery scheme to which Paradis pleaded guilty, court filings do not reveal the names of the LADWP officials, board member, or general manager involved, but the general manager is described as having served in the post from 2016 to 2019. David Wright, who held that position during those years, could not be reached for comment Monday.
The payments in this scheme were in exchange for awarding, in June 2017, of a three-year, $30 million no-bid contract to Paradis’s cyber-services company, Aventador Utility Solutions. According to court filings, Paradis had "ghostwritten" the supposedly independent monitor report upon which the board had based its decision. Unbeknownst to the board at the time, the then-LADWP general manager "secretly agreed to become its CEO with an annual salary of $1 million and a luxury company car," according to the DOJ statement.
Jamie Court is president of Consumer Watchdog, a consumer rights advocacy nonprofit, which was among the earliest and loudest voices speaking out about the DWP debacle six years ago.
"It’s a total indictment of the DWP leadership and the LA city leadership," said Court. "It makes LA look like we never got past "Chinatown." You’ve got the head of the DWP taking bribes, and the City Attorney's Office directing a fraud on the court, and this all happening under the nose of Mike Feuer, the city attorney, who’s either got to be blind or part of it. I think this is probably the tip of the iceberg."
The DWP scandal is only the latest in a series of bribery charges leveled at various members of the upper echelon of LA's political leadership, including two former city councilman — Mitchel Englander and Jose Huizar — as well as sitting City Councilman Mark Ridley-Thomas, who has been suspended from the council. Former Deputy Mayor Raymond Chan was also charged in a federal corruption probe.
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