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FBI Alleged Ex-LA City Attorney Lied During Probe of 2019 Water Department Billing Scandal

FBI Alleged Ex-LA City Attorney Lied During Probe of 2019 Water Department Billing Scandal

Los Angeles City Attorney Mike Feuer speaks at the Warner Grand Theater in San Pedro, Calif., on Feb. 27, 2022. (John Fredricks/The Epoch Times)

Sophie Li

Sophie Li

5/21/2024

Updated: 5/21/2024

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The Federal Bureau of Investigation (FBI) has alleged that former Los Angeles City Attorney Mike Feuer lied to investigators during a probe into a lawsuit concerning the city’s mishandling of the Department of Water and Power’s flawed billing system rollout, according to recently unsealed documents.
In a 1,425-page affidavit, FBI agents alleged that Mr. Feuer lied about his knowledge of the Department of Water and Power’s (DWP) payment to settle the lawsuit over the billing scandal, which led to significant overcharges for numerous customers.
“Multiple sources of evidence provide probable cause to believe that Feuer obstructed justice [and] made materially misleading statements to the FBI ... that allowed the City to settle multiple class actions on the City’s preferred terms,” FBI Special Agent Andrew Civetti wrote in the 2019 affidavit.
The documents were released after the U.S. District Court granted approval for a request submitted by Consumer Watchdog and the Los Angeles Times in February.
The affidavit claimed that following the initial collusive litigation settlement, an employee of Beverly Hills lawyer Paul Kiesel, whom Mr. Feuer had hired to represent the city, purportedly threatened to expose the city’s misconduct unless she was compensated.
According to the agents, Thomas Peters, a top deputy, arranged an $800,000 “hush-money payment” to a prospective whistleblower in exchange for silence regarding collusive and potentially fraudulent litigation practices involving DWP under Feuer’s “implied direction.”
“There is probable cause to believe that Feuer made false or misleading statements to the investigation team, wherein he denied knowledge of any hush money payment to conceal his office’s litigation practices as well as knowledge of specific other details about the collusive litigation,” Mr. Civetti said in a search warrant application in 2020.
However, Mr. Feuer has not been charged with any crime in the case.
In a statement to the Los Angeles Times, Mr. Feuer denied any knowledge of collusion in the handling of the litigation.
“I cooperated fully with the U.S. Attorney’s staff and am glad they ultimately obtained all the actual facts,” he said in the statement. “After they did, and assessed each witness’ credibility, they prosecuted the wrongdoers and stated there was no ongoing investigation into me.”
Mr. Feuer, who previously served as an Assemblyman and city councilor, had a brief mayoral campaign in Los Angeles and ran unsuccessfully for the congressional seat vacated by Democratic Rep. Adam Schiff.
The affidavits were part of a broad federal criminal investigation into the billing scandal, which led to three former top city officials and a New York attorney pleading guilty to federal bribery and extortion charges last November.
The case dates to 2013, when the water department implemented a billing system acquired from PricewaterhouseCoopers. After the new system’s rollout, hundreds of thousands of ratepayers received significantly inflated and inaccurate bills. This led to multiple class-action lawsuits filed by ratepayers against the city and DWP, according to the U.S Attorney.
In December 2014, the City Attorney’s Office hired New York lawyer Paul Paradis to handle a lawsuit against PricewaterhouseCoopers.
At the same time, Paradis was also representing Antwon Jones, a ratepayer with a claim against the water department for billing overcharges. Mr. Jones was unaware that his lawyer was also representing his opponent, prosecutors said.
Later, Mr. Paradis engaged an Ohio lawyer to officially represent Mr. Jones in the lawsuit, with Mr. Paradis handling most of the work. The affidavit also reveals that the duo secretly agreed that Mr. Paradis would receive 20 percent of the Ohio lawyer’s fees from the case as a kickback, prosecutors said.
In July 2017, a Los Angeles Superior Court judge granted final approval of the $67 million settlement in Jones v. City, which included approximately $19 million in attorney fees for the plaintiffs.
Of this amount, the Ohio lawyer and his law firm received $10.3 million. Subsequently, the Ohio lawyer secretly transferred nearly $2.2 million to Mr. Paradis, disguising it as a real estate investment and channeling it through shell companies established by both parties to conceal the illicit payment, according to prosecutors.
As a result, David Wright, the former general manager of the DWP, was sentenced in 2022 to six years in federal prison for bribery. Thomas Peters, a former senior official in the City Attorney’s Office, received a nine-month home detention sentence in May 2023 for his involvement in an extortion scheme related to the billing debacle. David Alexander, the utility’s former chief information security officer and chief cyber risk officer, was sentenced in 2022 to 48 months in federal prison for lying to the FBI about a covert business relationship with Mr. Paradis. Mr. Paradis himself was sentenced last year to nearly three years in prison for accepting a kickback.
In response to City News Service, Ciaran McEvoy, a spokesman for the U.S. Attorney’s Office in Los Angeles, refrained from commenting on the recently unsealed documents. However, he confirmed that the office’s investigation into the DWP had concluded.
“We cannot comment on charging decisions in individual cases,“ Mr. McEvoy said in a statement. ”However, our office has a strong history—especially in recent years—of charging, prosecuting, and convicting officials who break the public trust and violate federal law. As we have stated before, where the evidence did not establish every element of a federal crime beyond a reasonable doubt, we have not pursued charges.”
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Sophie Li

Sophie Li

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Sophie Li is a Southern California-based reporter covering local daily news, state policies, and breaking news for The Epoch Times. Besides writing, she is also passionate about reading, photography, and tennis.

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