DOWNTOWN LOS ANGELES - FBI agents served search warrants at the downtown headquarters of Los Angeles Department of Water and Power and City Hall East on Monday, as part of a probe into the city's handling of litigation and a settlement over the botched rollout of a DWP billing system.
"As has been reported, the FBI served search warrants for documents on several city employees at (City Hall East) and DWP offices, including some of our staff members," said Rob Wilcox of the City Attorney's Office.
"The warrants served on our staff relate to issues that have arisen over the class-action litigation and settlement surrounding the DWP billing system and the city's lawsuit against (PricewaterhouseCoopers). We have and will continue to cooperate fully with the expectation that the investigation will be completed expeditiously."
FBI authorities declined to comment on specifics of the investigation.
"We are confirming a search warrant at Los Angeles DWP in downtown Los Angeles, but are prohibited from commenting further because affidavits involved in the warrant are sealed," said Katherine Gulotta of the FBI in Los Angeles, speaking to City News Service.
LADWP issued a statement of its own regarding the search warrant:
"Earlier this morning at approximately 9:25 AM, agents from the Federal Bureau of Investigation served a search warrant at the John Ferraro Building and Figueroa Plaza in connection with a federal investigation. We are fully cooperating with authorities and at this time are unable to comment further."
Minimal activity was visible at the DWP building at 111 N. Hope St. in the Civic Center area. A van with an FBI placard was parked outside the building while at least two agents were seen entering the building.
The FBI also served a warrant at Los Angeles City Hall. Another van with an FBI placard was seen parked outside and agents were seen at the office of City Attorney Mike Feuer.
When contacted for a comment, the City Attorney's office responded with the following:
"As has been reported, the FBI served search warrants for documents on several City employees at both CHE and DWP offices, including some of our staff members. The warrants served on our staff relate to issues that have arisen over the class action litigation and settlement surrounding the DWP billing system, and the City's lawsuit against PwC. We have and will continue to cooperate fully with the expectation that the investigation will be completed expeditiously."
Spectrum News also reached out to the Mayor's office for comment and received the following statement from Press Secretary Alex Comisar:
"We were notified earlier this morning that federal search warrants were being executed today. The Mayor believes that any criminal wrongdoing should be investigated and prosecuted. His expectation is that any City employee asked to cooperate will do so fully and immediately."
The botched rollout of the DWP billing system 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.
The city and DWP, meanwhile sued PricewaterhouseCoopers over its handling of the system's rollout.
Earlier this year, PricewaterhouseCoopers 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 maintained in court documents that the arrangement with Paradis was made specifically to secure a more favorable legal outcome for the city and DWP.
The city denied wrongdoing, but it subsequently canceled $30M in contracts it had awarded Paradis for legal services and efforts to correct the billing system issues.
Paradis and the city both deny any wrongdoing.
City News Service contributed to this report.
