The Los Angeles Department of Water and Power will create an Office of Inspector General in an effort to bolster accountability and transparency, officials announced Thursday.
The announcement comes two months after FBI agents raided the DWP’s downtown headquarters and City Hall East.
“Accountability and transparency are crucial to running a public utility that Angelenos can count on and trust,” Los Angeles Mayor Garcetti said. “An inspector general at the DWP will help us make certain that the organization is always working to uphold the highest standards of integrity and improve customer confidence.”
FBI agents served search warrants at the DWP and City Attorney’s Office in July as part of a probe into the city’s handling of litigation and a settlement over the botched rollout of a DWP billing system.
The rollout in 2013 led to thousands of customers receiving inaccurate bills, with some being wildly overcharged. The debacle prompted a class-action lawsuit that led to a settlement requiring the DWP to reimburse customers roughly $67 million, though ratepayer attorneys now argue that amount should be higher.
The city and DWP, meanwhile, sued PricewaterhouseCoopers over its handling of the system’s rollout.
But PricewaterhouseCoopers earlier this year questioned the city’s relationship with an outside attorney it hired to handle the litigation against the company. The firm said the attorney, Paul Paradis, was hired by the city as a legal consultant in its lawsuit against the company, while he was also serving as legal counsel suing the city on behalf of a DWP customer in the class-action lawsuit.
PricewaterhouseCoopers argued in court papers that the arrangement with Paradis was made specifically to secure a more favorable legal outcome for the city and DWP.
On Thursday, Garcetti said the inspector general will be part of the DWP’s senior leadership team, providing continuous review and oversight of contracting matters, whistleblower complaints, ethics and other internal policies. The office will have the power to initiate investigations and oversee the department’s Internal Audit Division, Special Investigations Unit and ethics compliance staff.
“While DWP is already subject to multiple layers and high degrees of oversight, we must remain diligent in eliminating any opportunities for abuse or other actions that tarnish the honest, hard work of DWP employees, or detract from our primary focus of providing the highest service and fairest rates possible for the city’s ratepayers,” said City Councilwoman Nury Martinez, who chairs the council’s Energy, Climate Change and Environmental Justice Committee.
Los Angeles City Controller Ron Galperin said his office has thoroughly audited the DWP’s operations in recent years, looking into dozens of fraud, waste and abuse complaints, and he said his office will continue its investigations.
“I look forward to working with the mayor to ensure that the Office of Inspector General increases transparency and accountability at the DWP,” Galperin said.
DWP Interim General Manager Martin Adams said the utility is committed to ensuring actions are proper and transparent.
“The hiring of an inspector general will give us a person whose sole job is to make certain we have adequate checks and balances and stronger internal oversight,” Adams said. “We will do this right and in a way that works successfully within the DWP and city charter framework.”
The DWP will be advised on the creation of the OIG by Dan Schnur, who formerly served as chairman of the California Fair Political Practices Commission, and he will conduct a 90-day review of DWP’s internal processes.