A plea deal in DWP case
An attorney hired by City Atty. Mike Feuer’s office has agreed to plead guilty in a scheme involving a $2.2-million kickback and bribes to the top executive at the Los Angeles Department of Water and Power in exchange for a lucrative contract, prosecutors said Monday.
Paul Paradis, 58, of Scottsdale, Ariz., agreed to plead guilty to one count of bribery and is cooperating with the federal criminal investigation, prosecutors said.
In a 46-page plea agreement, prosecutors laid out how Paradis took part in a plan to settle a high-profile
lawsuit brought against the DWP on terms that were favorable to the city and himself.
He simultaneously represented the DWP and a DWP customer who was the lead plaintiff in a class-action lawsuit against the city, prosecutors said. He also went on to receive a $30-million contract at the utility.
David Scheper, Paradis’ attorney, said that “out of respect for the ongoing investigation we have no comment.”
Feuer, who is running for mayor, is likely to face renewed questions about his oversight of the city attorney’s office after the announcement of the plea agreement.
At the same time, there is likely to be fresh scrutiny of the DWP’s oversight. Both a former general manager and a board member, who are unnamed in the plea agreement, are accused of scheming to accept bribes from Paradis that included promises of a million-dollar salary and a luxury company car.
Paradis was first hired by Feuer’s office to represent the city in litigation stemming from the 2013 billing disaster at the DWP. The city launched new billing software that overcharged hundreds of thousands of customers, prompting several lawsuits against the utility.
As part of the plan, Paradis asked an Ohio attorney he knew to “play the role of the attorney” representing the lead plaintiff in the classaction lawsuit, according to the plea agreement.
In reality, that lead plaintiff — Van Nuys customer Antwon Jones — thought that Paradis was his attorney.
Months earlier, Jones had retained Paradis, hoping to sue over his faulty DWP bill, but Paradis never informed Jones that he was working for the city, according to court documents.
According to the plea agreement, Paradis told the Ohio attorney that “defendant Paradis would do all or most of the work in the case, and that in exchange, defendant Paradis wanted twenty percent of Ohio Attorney’s fees as a kickback.”
The Jones vs. City settlement, which Paradis helped craft, gave the Ohio attorney who represented DWP customers $10.1 million in attorney fees.
Paradis ultimately collected a $2.175-million kickback from the Ohio attorney, according to the plea agreement. The money was transferred through a “shell company” that Paradis created to “transfer and conceal the illegal kickback payment.”
The plea agreement also says that the plan to quickly settle the lawsuit brought against the city was known inside Feuer’s office. “At least one member of the City Attorney’s Office” attended a meeting where Paradis and another attorney were “directed and authorized to find outside counsel that would be friendly to the city and its litigation goals,” prosecutors said.
Rob Wilcox, a spokesman for the city attorney’s office, told The Times that “if that allegation is true, that conduct would be utterly inconsistent with the standards” of Feuer’s office.
“I am beyond outraged that anyone would breach their duties to the public we serve, as this plea agreement reflects,” Feuer said. “As public servants, integrity must be our watchword, our guiding principle. At the end of the day, that’s all we have. We can have no tolerance for betraying the public trust.”
The plea agreement lays out how Paradis managed to use his leverage at both the city attorney’s office and the DWP.
Paradis created a company called Aventador Utility Solutions to contract on future work for the agency with “the knowledge and authorization” of the DWP’s general manager and others at the DWP, prosecutors said.
Paradis met privately with the general manager at a Riverside hotel on or around Feb. 10, 2017, to discuss “ways that DWP General Manager could benefit financially from Aventador” and the fact that they intended for Aventador “to secure a lucrative no-bid contract with LADWP,” according to the plea agreement.
It was decided that the general manager would work to ensure that the agency’s board awarded a contract to Aventador in exchange for a number of benefits, according to the plea agreement.
The two men agreed that the general manager upon retiring from the DWP would join Aventador as the company’s CEO, receiving an annual salary of about $1 million and a new Mercedes SL 550 as his company car, according to the plea agreement.
The DWP’s general manager in 2017 was David Wright. Neither Wright nor his attorney responded to a request for comment on Monday. Wright was removed from his job after the FBI raided the DWP and city attorney’s office in July 2019.
The raid occurred months after consulting firm PricewaterhouseCoopers, which was fighting the city in court over the DWP billing debacle, first raised concerns about Paradis’ role and the DWP contract.
The plea agreement alleges that Paradis was actually “ghostwriting” most of the periodic reports that a court-appointed independent monitor was submitting to the Los Angeles Superior Court judge overseeing the Jones vs. City lawsuit.
Paradis “drafted nearly all” of the independent monitor’s reports with “the knowledge and approval of multiple LADWP officials and employees,” according to the plea agreement.
Paradis also treated the independent monitor to meals, drinks and attendance at sporting events “on multiple occasions,” according to the plea agreement.