Nearly three years after the FBI raided the offices of the Los Angeles Department of Water and Power as part of a corruption investigation, Los Angeles Mayor Eric Garcetti on Monday, April 11, announced the hiring of an inspector general to lead an office that will investigate and audit the department’s activities.
Starting May 9, Sergio Perez, the former head of the city Ethics Commission’s enforcement unit, will lead an office that will monitor a public utility that since the raid has seen a former general manager plead guilty to a bribery charge and another department official plead guilty to lying to FBI investigators.
Garcetti unveiled his plan to set up an Office of the Inspector General in 2019, several months after the FBI served search warrants at the LADWP headquarters in downtown Los Angeles, and other city offices. But he did not begin staffing the office until now, due to the pandemic putting many new city programs on hold, a mayoral aide said.
The FBI investigation, which is ongoing, grew out of irregularities found in a lawsuit settlement the City Attorney’s Office and others crafted to resolve numerous complaints of inaccurate LADWP bills that were issued following a billing system overhaul.
The investigation and 2019 raid also extended to the City Attorney’s Office, and most recently, a senior official in the City Attorney Mike Feuer’s office pleading guilty to an extortion charge.
The probe looms over city election candidates — including Feuer who is running to be mayor. Feuer has maintained that he was unaware of the collusion and illegal activity that went on in his office. A recent investigation by NBC4 found that Feuer was scheduled to be part of a 2017 meeting in which an extortion scheme was discussed, although a spokesperson for Feuer, Rob Wilcox, told the news station that his boss has “no specific recollection of that meeting” and had not been informed of illegal activity. Wilcox is running to be city controller.
As inspector general, Perez will be part of the LADWP’s senior leadership team, and conduct ongoing review and provide oversight on “contracting matters, whistleblower complaints, ethics and other internal policies,” and have the authority to investigate and oversee the department’s internal audit division, special investigations unit and ethics compliance staff, according to the mayor’s office’s press release.
Department of Water and Power officials said Monday that the Office of the Inspector General will be funded as part of the LADWP budget, and the inspector general will report to the utility’s general manager, as well as to the LADWP commission, the Ethics commission, the ratepayer advocate and others. Perez will lead the hiring of staff for the office.
Meanwhile, an independent watchdog criticized Garcetti for the slow pace of the reform effort, saying it was “too little too late.”
“Mayor Garcetti has shown as much urgency in filling this critical post as the Senate has in confirming him for being an ambassador to India,” said Jamie Court, whose organization Consumer Watchdog sounded early alarms on the unusual nature of the lawsuit settlement that later also prompted the federal investigation.
Court said he was looking to the new mayor, to be elected this year, to prioritize “accountability and restructuring DWP.” Perez’s role “will be toothless unless the new mayor guarantees independence from DWP and that she or he will back up the Inspector General over the DWP and its board,” Court said.
Garcetti praised Perez as having “the breadth and depth of experience to make certain that the department is always working to uphold the highest standards of integrity and improve customer confidence.”
Perez most recently served as executive director of the Orang County Office of Independent Review, after a stint as the director of enforcement for the Los Angeles City Ethics Commission.
“I have spearheaded accountability and transparency efforts effectively throughout my career in government by working to identify and correct individual instances of fraud, waste, and abuse to get at their root, systemic causes – all with an eye on collaboration and problem-solving,” Perez said in a statement.
“As a recognized leader in oversight, systems reform, and local government, I look forward to working with LADWP’s current leadership in its efforts to improve the agency’s practices and increase public trust and appreciation for the department’s work,” he said. “For that reason, I am excited to serve as LADWP’s first Inspector General.”