State Orders Audit of Central Basin Municipal Water District

By Brian Hews

The California State Legislature’s Joint Audit Committee ordered a financial audit today of Commerce based Central Basin Municipal Water District (CB).

Assembly members Cristina Garcia, D-Bell, Anthony Rendon, D-South Gate, State Senators Ed Hernandez, D-West Covina, and Ricardo Lara, D-Long Beach, asked for the audit in a letter to the committee.

Los Angeles County Supervisor Don Knabe released a statement to HMG-CN saying, “I am pleased to hear that the California State Auditor will audit the Central Basin Municipal Water District’s operations and use of public funds. Years of mismanagement and dysfunction have threatened the agency’s ability to fulfill their capacity as a water distributor to the region. The two million residents, 24 cities, and numerous unincorporated communities that depend on the Central Basin Municipal Water District for their water needs deserve an agency that operates in the public’s trust, transparently and effectively. I am confident that this audit will help us sift through the allegations of unethical practices and misappropriations of public funds, and help us determine if the agency can carry out its responsibilities.”

The announcement will most certainly cause anxiety to the likely targets of the audit, President Bob Apodaca, and Directors Leticia Vasquez and James Roybal.

The three have maintained control of voting since 2012, and voted on questionable financial items several times with Directors Phil Hawkins and Art Chacon voicing their disapproval and sometimes walking out of the boardroom during a vote.

The latest vote gave Los Angeles based law firm of Tafoya and Garcia (TG) $100,000 to investigate ex-General Manager Tony Perez who was fired in October and who has recently filed an $8,000,000 wrongful termination lawsuit.

As first reported by HMG-CN, the billings submitted by TG, along with their partner investigation firm, were questionable at best, fraudulent at worst.

Partner David A Garcia and another lawyer billed almost $92,000 in less than 35 days.

Another item the auditor’s will likely look at is the cost of the Qui Tam Whistleblower lawsuit against CB of which Director Leticia Vasquez is a “party plaintiff” to the lawsuit.

Fees for that lawsuit, filed by a Vasquez who was elected to represent CB, has cost a reported $200,000, with more work to be done.

And finally, light might be shed on the infamous $2.7 million “slush fund.” The Trust Fund, which was formed to finance the development of an Environmental Impact Report, was “managed” by the District’s General Counsel Doug Wance.

Wance allowed the distribution of the funds shielded from public scrutiny.

Approximately $2.7-million was spent without public review or Board approval, and distributed to numerous consultants and contractors. The largest beneficiaries were reportedly engineering firm, HDR (approximately $1.5-million) and Pacifica Services (approximately $750,000).

Doug Wance’s partner is HDR Vice-President David Cobb.

Assemblyman Rendon said in an emailed statement, “… audit ensures Central Basin is operating and spending public funds in a manner that fulfills its mission of serving Southeast Los Angeles County residents with quality drinking water.”

The audit has an estimated completion time of seven months.