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DWP Mystery Money May Have Violated Laws

DWP Mystery Money May Have Violated Laws

The transfer of millions of dollars from the Los Angeles Department of Water and Power to a pair of private trust funds could be criminal.

The Los Angeles County District Attorneys Office said Friday it has not begun a criminal investigation because it had not yet received a complaint, but an official indicated attorneys in the office’s Public Integrity Division had taken an interest in recent media reports that trust managers have refused to detail how the $41,146,000 transferred since 2000 has been spent.

A legal opinion issued by the Los Angeles City Attorney’s Office in 2000 concluded the secretive handling of public money by the two private – partially union controlled – trusts would be illegal, unless the trusts held open public meetings. They never did.

The lawyer who wrote the opinion, Assistant City Attorney Terso Rosales, has died, but in the memo to then DWP boss Raman Raj, said one of the trust’s authorities to hire and fire, purchase goods, and invest public funds, led him to conclude the trust must be considered a legislative body under the California Brown Act, and would be required to hold public meetings.

“If not, the entire transaction fails and results in an unlawful gift of $1.2 million in public funds,” Rosales wrote, as first reported in the L.A. Weekly in 2005.

Also Friday, current City Attorney Mike Feuer refused to discuss the trusts, called the Joint Training Institute and the Joint Safety Institute, suggesting he was bound by attorney client privilege issues relating to new discussions of the trusts’ legal status.

Earlier this week Mayor Eric Garcetti demanded the Board of DWP Commissioners obtain the trusts’ financial records and make them public. Garcetti said he hoped to obtain the records quickly but said he was prepared to ‘fight’ to get them.

-- Eric Leonard

 

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