LADWP

Federal judge asked to unseal FBI investigation of LADWP overbilling scandal and coverup

Consumer Watchdog says LA taxpayers should know what agents discovered about the actions of current and former city employees during efforts to manipulate ratepayer lawsuits and to pay an extortionist.

NBC Universal, Inc.

A consumer advocacy group has asked a federal judge in Los Angeles to unseal dozens of FBI search warrants and other documents that detail the criminal investigation into the efforts of some city officials to manipulate lawsuits stemming from the Department of Water and Power's overbilling debacle a decade ago.

Consumer Watchdog and the Los Angeles Times filed the request this week after unsuccessfully asking the U.S. Attorney's Office to make the records public now that the criminal case has been closed.

"Folks deserve to know the details of what actually occurred, but also, more importantly, the relative culpability of the folks that didn't go to jail," Jerry Flanagan, litigation director for Consumer Watchdog, told the NBC4 I-Team Thursday.

"These are high level city public officials who were involved in the crime, and we know broadly what they did, but we don't see the details of how it was carried out," he said.

In particular Flanagan says the public should learn the full extent of the involvement of former LA City Attorney Mike Feuer, who's running for Congress in the March 5 primary election.

Consumer Watchdog, which is non-partisan and non-profit, said the timing of its request to unseal the records was unrelated to the election, rather the result of its immediate efforts to get access to the documents once the federal criminal case was closed late last year.

Its court request referenced the I-Team's reporting in 2022 that showed Feuer was scheduled to attend one particular meeting that took place in Feuer's City Hall East office, in which prosecutors said an $800,000 extortion payment was approved.

Feuer has denied any wrongdoing and said he doesn't remember attending the specific meeting. He also shared in August 2022 a letter he received from federal prosecutors that said he was not -- at the time --- the subject or target of a criminal investigation.

"The details here will help the public understand what are public officials, who are being paid with taxpayer dollars, were actually doing in their jobs and whether or not they were breaking the law, or just merely being highly, highly unethical," Flanagan said.

The U.S. Attorney's Office declined to comment on the request and said it would respond in court.

Four people, including the former general manager of the DWP and a former top deputy to Feuer, pleaded guilty to a variety of federal corruption charges as a result of the FBI investigation.

At the sentencing for another of those four, attorney Paul Paradis, who was hired by the city to manage some of the litigation and admitted to a bribery scheme, U.S. District Court Judge Stanley Blumenfeld, Jr. said he wondered why more city employees had not been prosecuted.

In response to the Consumer Watchdog filing Feuer's campaign advisor characterized the effort as a tactic akin to efforts to impeach [President] Joe Biden.

"18 months ago, the US Atty issued a letter stating Mr. Feuer was not under an ongoing investigation in this matter. Full stop," John Shallman said in an email.

"Now comes this last-minute, Trump-style, smear--based principally on false accusations by a disbarred, convicted felon, who desperately tried and failed to avoid accountability for his own wrongdoing," Shallman said, referring to statements made by Paradis.

The FBI served search warrants at DWP headquarters and the LA City Attorney's Office in 2019 after it was revealed in court that the city arranged to pay an extortionist, who had threatened to reveal that members of the City Attorney's Office had secretly schemed to manipulate ratepayer lawsuits filed against the DWP for the overbilling.

The excessive billing trouble developed in 2013 and 2014 after the DWP transitioned to a new computer system. Tens of thousands of DWP customers were over charged because of problems with the software.

Contact Us