Leaked report offers peek at DWP culture
A new general manager was tapped. The board of commissioners elected a new president, former state lawmaker Richard Katz. And a search is underway for a new ratepayer advocate to keep tabs on the spending at the Los Angeles Department of Water and Power.
But behind the scenes, the utility has also been facing withering scrutiny. A confidential report recently outlined long-standing problems with its culture and management structure.
The DWP board sought the report in the wake of a corruption scandal involving top executives at the utility, who were accused of rigging contracts and taking bribes, costing the agency tens of millions of dollars. Three people who worked for the DWP, including a former general manager, are now serving prison sentences.
The report, prepared by the law firm Paul Hastings, doesn’t offer earth-shattering revelations about the corruption scandal. But it does provide a bracing assessment of the department’s upper management, describing a workplace culture that encouraged employees to keep their “heads down” and “curry favor” with management in order to advance professionally and “maximize” their pensions.
The report, completed last year, looked at “systematic failures and gaps” that allowed wrongdoing to be carried out at the utility. The document was never publicly released but has been reviewed by The Times.
Investigators with Paul Hastings interviewed about 40 people, including current and former DWP employees and commission members, according to the report.
“Everyone we spoke with agreed there is a significant accountability problem at the department,” the law firm wrote in its 95-page report, using italics for emphasis.
The report also depicted the DWP as a cliquey environment where employees received plum positions and promotions based on their relationships with top leaders, rather than their job performance.
The assessment concluded that the role of the DWP general manager is akin to a celebrity where there are “limited checks and balances” and “lots of feigned obsequiousness.” Also, the DWP lacks an internal system for reporting fraud, waste and abuse, the law firm found.
The report did recognize that the DWP has “hardworking” and “smart” workers. And it offered several recommendations, including regular reviews of employees and managers and a stronger role for the ratepayer advocate.
That post is currently held by Fred Pickel, who is departing later this year.
Representatives for Mayor Karen Bass and the DWP declined to comment on the report, saying it is a “confidential” communication between Paul Hastings and the utility.
Paul Hastings has a $4.25-million contract with the utility that started in 2022.
Since the corruption scandal became public in 2019, some moves have already been made. The ratepayer advocate — which is housed in the Office of Public Accountability — now sits in on closed-door board meetings, after previously being shut out.
Pickel, asked about his reaction to the report, told The Times that the Office of Public Accountability “can only be effective if listened to. It is easy for what we say to be ignored.”
Jack Humphreville, who volunteers with the Neighborhood Council Budget Advocates, said the DWP faces competing pressures from City Hall, the union representing DWP workers and environmentalists.
Humphreville said that he sees “an element of fear” among staff at the utility, who don’t want to lose their jobs or perks by bucking the system. The feeling at the DWP is “if you don’t play by the rules, [you’re] going to get screwed,” he said.