LOS ANGELES: Ex-DWP Executive Gets 6 Years In Federal Prison Over Involvement In Corruption Case

LADWP

BY FRED SHUSTER

A former top executive of the Los Angeles Department of Water and Power was sentenced Monday to six years in federal prison for his role in a bribery scheme stemming from a probe of the city’s handling of the botched launch of a DWP billing system.

David H. Wright, 62, of Riverside, will also have to serve three years of supervised release following his prison term and pay a fine of $75,000.

Wright — the first defendant in the DWP billing investigation to be sentenced — accepted bribes from a lawyer in exchange for supporting a $30 million, no-bid DWP contract, according to the U.S. Attorney’s Office. The lawyer named in the case, Paul O. Paradis, pleaded guilty to a federal bribery count and is awaiting sentencing.

Before imposing sentence, U.S. District Judge Stanley Blumenfeld Jr. said Wright was driven to crime by “pure greed,” despite having a “soft landing” in place for his retirement without having to break the law.

“It’s baffling,” the judge said.

In court Monday in downtown Los Angeles, a contrite Wright offered an apology to family members and DWP’s leadership, customers and ratepayers.

“I really messed up my life at the end of my career,” he said. “I had higher aspirations … but, your honor, I broke the law. I have no one to blame but myself.”

The cases against Wright and Paradis were the first criminal charges arising out of the investigation into the billing system rollout and subsequent litigation. The failed system led to many customers receiving wildly inflated bills. A prosecutor called Wright “the highest-ranking official of the largest public utility in the United States.”

Wright was the DWP general manager from September 2016 until July 2019, when prosecutors say he was removed from office by Mayor Eric Garcetti after the FBI conducted searches of the DWP and the City Attorney’s Office.

Wright developed a relationship with Paradis, an Arizona attorney hired by the City Attorney’s Office to represent the city in litigation against the contractor involved in the introduction of the 2013 billing system.

Paradis and his New York-based law firm also had a $6 million DWP contract to provide project management services in efforts to repair the faulty billing system. At the same time, however, Paradis was representing a DWP customer who planned to sue the city over the system.

Paradis admitted in his plea agreement that he accepted a nearly $2.2 million kickback for getting another attorney to represent his ratepayer client in the lawsuit against DWP — a suit that ultimately resulted in a universal, class-action settlement that critics contended was overly favorable to the city.

Wright’s attorney, Anthony Pacheco, arguing for a sentence of no more than two years, told the court that his client had been “taken in” by Paradis.

Paradis, 58, is expected to be sentenced in July.

According to prosecutors, Wright and Paradis struck a deal in early 2017, with Wright supporting a “no-bid” $30 million DWP contract for Paradis’ downtown Los Angeles-based company Aventador Utility Services LLC. In exchange, Paradis agreed to give Wright a million-dollar-per-year job as Aventador’s CEO once he left the DWP, with the deal also including a luxury company car for Wright, officials said.

Wright also lobbied members of the DWP board of directors to support the contact for Aventador, the name of which was taken from a model of Lamborghini sports car, according to his plea deal.

In his plea deal, Wright admits that he lied to federal investigators in June 2019 when he told them he did not have any financial or business interest tied to Paradis. He also admitted destroying evidence to thwart to the federal probe.

Blumenfeld said he imposed the six-year prison sentence, rather than the eight years recommended by the government, due to mitigating factors, including Wright’s plea agreement.

“When he finally decided to do the right thing, he did it with gusto,” the judge said Monday.

After the faulty billing system was unveiled, the city and utility faced multiple class-action lawsuits filed by ratepayers alleging harm resulting from the program.

In December 2014, the City Attorney’s Office retained Paradis and Beverly Hills lawyer Paul R. Kiesel as special counsel to represent the city in a lawsuit meant to be used to settle all related claims on the city’s desired terms, according to federal prosecutors.

Kiesel is cooperating with the investigation and is not charged with any wrongdoing.

Prosecutors contend that when Paradis began representing the city as special counsel in the litigation against PricewaterhouseCoopers over the company’s handling of the DWP billing system rollout, city prosecutors were aware that he was already representing Antwon Jones, a ratepayer who had a claim against the utility arising from billing overcharges.

But Jones was unaware that his lawyer, Paradis, also represented his intended adversary, according to court filings.

Thomas H. Peters, 55, of Pacific Palisades, a former senior official at the City Attorney’s Office, pleaded guilty to a federal extortion charge and is cooperating in the probe. He is expected to be sentenced in August.

David F. Alexander, 54, of Arcadia, a former senior cyber official at the utility, pleaded guilty to a felony charge of making false statements and is set for sentencing June 7.