The LADWP billing scandal involves the offices of several prominent local leaders.
In June 2016, senior aides at Mayor Eric Garcetti’s office used their private email accounts to suggest “proactively” leaking information to the media on the Department of Water and Power billing scandal. The mayor’s staffers wanted to shape the narrative to imply “DWP discovered this and is aggressively going after the wrongdoers.” The “wrongdoer” in this case was an employee of the consulting firm PricewaterhouseCoopers (PwC), who allegedly used money from the DWP contract to pay for prostitutes and parties in Las Vegas. The city sued PwC for the overbilling, but ultimately dropped its case, as it had been undermined by officials in City Attorney Mike Feuer’s office refusing to testify.
In one message, Julie Ciardullo — then executive officer to Mayor Eric Garcetti and now director of the city’s C40 (a network of mayors working to reduce emissions) office — says that “MEG [Mayor Eric Garcetti’s] instinct is to proactively release to the media and even do a press conference.”
In that same chain, they discussed having a meeting the following day with former DWP General Manager David Wright, who later pled guilty to bribery. Wright had participated in a scheme to give Paradis’ technology firm, Aventador Utility Services LLC (named after a car he liked) a $30 million contract with DWP, while he himself accepted a $1 million salary — and a Mercedes — as CEO of said company after retiring from his DWP job.
Senior Garcetti aides Richard Llewellyn, Ana Guerrero (then chief of staff and current strategist), Barbara Romero (current director and general manager of LA Sanitation), and Ted Bardacke (then director of infrastructure and current CEO of Clean Power Alliance) held a meeting on October 28, 2016, with Paul Paradis, the city’s outside counsel, and David Wright, then general manager of DWP.
Guerrero was placed on administrative leave by Garcetti in 2021 after posting salacious comments in a private Facebook group disparaging labor icon Dolores Huerta. She returned to the office a few months later as a strategic adviser, retaining her $248,000 salary. VICE News later reported that Guerrero had also mocked the Black Lives Matter movement (calling a march they did with a labor union “annoying”), been dismissive of the ACLU and the notion of structural racism, and stated that a police commissioner ought to be a “loyal soldier.”
Paradis pled guilty to bribery in the DWP billing scandal in January 2022. The sham lawsuit and subsequent kickbacks and bribes have cost the city at least an estimated $50 million, and have also resulted in the charging of the former general manager of DWP and a senior official in the city attorney’s office. It is unclear whether the mayor’s office had anyknowledge of Paradis’ corruption at the time. Four people have agreed to criminal pleas thus far.
“Coordination between the mayor’s office and Paradis will catch prosecutors’ attention,” says Scott Tenley, a former federal prosecutor and now partner at Michelman & Robinson, “but if that coordination occurred on personal email accounts off of city servers, it becomes a red flag. That’s the type of email traffic that may not be turned over in response to a grand jury subpoena to the mayor’s office, if one has been issued.”
Knock LA reached out to Mayor Garcetti’s office about the 2016 meeting with Paradis. They answered the email, saying that “the job [of DWP inspector general] is currently posted and we are accepting applications. We expect to have the position filled in the next couple of months.” But they specifically avoided commenting on the question regarding the meeting. When Knock LA followed up with a query asking if that meant the mayor’s office declined to comment, they did not answer.
Mayor Garcetti first announced that there would be a DWP inspector general position in 2019, and it has yet to be filled. When we reached out to Barbara Romero at LA Sanitation, a spokesperson said to ask the mayor’s office instead. Ciardullo has yet to respond at the time of publishing.
Paradis’ scheme was known to some in the city attorney’s office by February 2015. The ongoing scandal has since seen one of City Attorney Mike Feuer’s senior officials charged for participating in the scheme and implicated as-of-yet uncharged senior officials in his office. Feuer is currently running a campaign for mayor, and previously insisted to Knock LA that he had no knowledge of how his outside counsel was preparing a sham settlement.
Feuer also stated that, when he and his office discovered emails proving this was happening, they immediately provided them to the court and to the press. However, a special master report by attorney Edward Robbins indicates that Feuer may have known more about the collusive nature of the settlement agreement, and despite his claims of transparency, he said “I do not recall” over 60 times in his deposition on the case.
The DWP scandal is a labyrinthine series of jargon-heavy legal maneuvers concocted after a citizen ratepayer named Antwon Jones discovered that he was being overbilled $340 per month for four months by the utility. The story was first broken by journalist Justin Kloczko, who still writes about it at the Debaser. Jones hired Paul Paradis to represent him in a class action suit with other plaintiffs suing the city of LA, but Paradis neglected to tell Jones that he was also working for the city. Paradis and co-counsel hired by Feuer’s office contacted a puppet lawyer about representing Jones in his friendly lawsuit against the city. The plan was to blame the billing scandal on PwC. PwC notified the mayor’s office in a June 28 letter that Paul Paradis had sent them an unprofessional complaint.
The class action lawsuit ultimately was settled for $67 million, and the plaintiffs were released from all claims to sue the city. Jones is now suing the city again — this time for violating his civil rights.
Attorneys on all sides of the scheme racked up massive amounts of fees, and persuaded the plaintiffs to agree to waive all their claims. No discovery was conducted in the case. Meanwhile, Paradis also created his own cybersecurity company as the solution to DWP’s billing problems. DWP General Manager David Wright agreed to help give Paradis’ company a $30 million contract while receiving his own kickbacks. Two birds with one stone, until the FBI raided the offices of DWP and the city attorney.
One senior official in the city attorney’s office was Thomas H. Peters, who the US attorney says met with senior members of the city attorney’s office to “take care of the situation” by keeping DWP officials quiet.
Paradis to US attorneys in November 2021 that he accepted nearly $2.2 million in a kickback scheme.
The US attorney’s office declined to comment on this story, stating that they do not comment on matters outside of their filings.
“Whether the city attorney’s office or any other department, there is zero tolerance for corruption, and people should be ready to pay the price,” Mayor Garcetti told Knock LA about the city attorney’s handling of the DWP scandal, prior to us receiving information about the meeting. “That’s one of the reasons that I’ve pushed for and want to see an inspector general, because there’s huge contracts that go by without people necessarily knowing that it’s happening.”
It’s unclear how aware mayor’s office staffers were of any of Paradis’ plans when they met. However, it seems that the mayor’s office was fully on board with the narrative Paradis had crafted about who was responsible for the billing scandal and what should ultimately be fed to the press.
Knock LA asked the Office of Mayor Garcetti how many meetings were held with Paul Paradis and what the topics discussed in said meetings were. We also specifically asked why this letter was sent via private correspondence instead of on city email. This was the response from the office of the mayor:
“These admitted criminals misled many people — and as a result, they have pled guilty to serious crimes. The Mayor shares Angelenos’ frustration that these crimes were committed and has said anyone involved should be prepared to pay the price. The emails referenced here have nothing to do with the matters being investigated.”
Former federal prosecutor Scott Tenley argues that these discussions had by the office of Mayor Eric Garcetti will be of interest to investigators.
“Paradis has every incentive to provide information about criminal conduct within the mayor’s office given the length of the federal prison sentence he’s currently facing,” says Tenley. “In the end, nothing may come of it. But until prosecutors reach that conclusion, emails like this are likely to cause a few headaches at City Hall.”
UPDATE: This story was updated at 10:27 AM on February 3, 2022, with a statement from the office of Mayor Eric Garcetti.
Correction: An earlier version of this article said that Paradis pled guilty in November 2021. The US Attorney’s Office announced the plea agreement in November 2021.