By Dakota Smith, LOS ANGELES TIMES
July 13, 2021
A court-appointed investigator on Tuesday released a sweeping report on the Los Angeles Department of Water and Power and the city attorney’s office, finding that attorneys participated in a scheme to settle litigation sparked by a faulty billing system and turn around the DWP’s battered image.
The “evidence supports a finding that the city directed and assisted in the city suing itself with a sham lawsuit,” wrote investigator Edward M. Robbins in a 595-page report.
Robbins found that the scheme allowed opposing attorneys to ultimately collect $19 million in fees, an amount he called “excessive, unjustified and a misappropriation of taxpayer funds.”
Following the botched rollout of a new DWP billing system that overcharged a wide swath of customers, the city in 2015 sued PricewaterhouseCoopers, blaming the consulting firm for the debacle.
At the same time, DWP customers filed a class-action lawsuit against the city.
While PricewaterhouseCoopers was defending itself in the lawsuit brought by the city, its lawyers uncovered evidence in the DWP class action. The firm alleged in court documents that the city took part in a fraudulent scheme to control the outcome of the lawsuit.
Following PricewaterhouseCoopers’ accusations, Los Angeles Superior Court Judge Elihu M. Berle, who oversaw both suits, tasked Robbins, a former federal prosecutor, in 2019 with scrutinizing payments and contracts linked to the suits.
His report singled out several attorneys working for City Atty. Mike Feuer, as well as the outside counsel Feuer’s office hired to represent the city in the billing litigation.
The report found that several attorneys “violated the ethical rules against dishonesty, deceit, and collusion and violated their ethical duties to the court in violation of Rules of Professional Conduct.”
Feuer, who is running for Los Angeles mayor, declined an interview request.
Rob Wilcox, a spokesman for the city attorney’s office, disputed the report’s findings about the staff attorneys, saying the steps they took were appropriate.
“From the time that he was appointed, [Robbins] never asked any city personnel a single question, orally or in writing — despite being empowered, and repeatedly invited, to do so,” said Wilcox.
The report found no evidence that Feuer or any member of the DWP board of commissioners knew that the class action against the city was “the product of collusion or knew of the numerous misrepresentations” made to the court and mediator by attorneys representing the city.
“The report confirms what we have said all along: that there has never been, nor could there be, any evidence that City Atty. Feuer knew of the alleged wrongdoing by others,” Wilcox said.
Robbins’ report is critical of a separate report commissioned by Feuer over attorneys’ actions in the litigation, questioning why “damaging documents” held by the city weren’t turned over to the investigator.
The FBI raided the city attorney’s office and the DWP in July 2019, seeking information related to the billing litigation and information about potential bribes and kickbacks.
In October, Berle ordered the city to pay a $2.5-million fine after PriceWaterhouseCooper accused the city attorney’s office of concealing evidence. At a downtown L.A. hearing, Berle said there had been “serious abuse of discovery by the city and its counsel” in the DWP case — actions that merited “considerable sanctions.”
Representatives for Feuer’s office have repeatedly denied that the city was involved in or aware of the alleged scheme and have blamed two outside attorneys the office hired. Those attorneys have denied wrongdoing, with one saying his work was done at the direction of the city attorney’s office.
Robbins’ report challenges the city’s assertion that those attorneys went “rogue.”
Robbins’ report has been highly anticipated. However, it didn’t include a complete audit related to any fee and financial arrangements between the attorneys to “avoid affecting an overlapping federal criminal investigation.”
Jamie Court, president of the nonprofit Consumer Watchdog, called Tuesday for the California State Bar to step in.
“All the attorneys involved should be investigated,” said Court.