Political Contributor Banked Millions From Central Basin Municipal Water District Contracts

Contract extended seven times by CBMW executives, sidestepping the agency’s Board of Directors.

By Brian Hews
(Commerce)~Central Basin Municipal Water District (CBMWD) documents obtained exclusively by  Hews Media Group-Community News show that a contract given to Pasadena based Pacifica Services, owned by politically connected CEO Ernie Camacho, has netted his company more than $5 million during the past six years,  including nearly $1.2 million since June 2012.

Documents also show that Camacho’s contract was extended seven times by CBMWD executives who sidestepped any formal approval by the five-member Board of Directors.
Camacho is considered to be one of the most politically influential figures in East Los Angeles political circles.

The eighth and final amendment to the agreement indicated that Pacifica would determine the “method, details, and means” of performing the services basically allowing Camacho’s company to operate without any approval or oversight from the District’s Governing Board of Directors.

The approved contract was signed by then General Manager Art Aguilar, who has since retired.

Click here to see contract.

Officials at Central Basin told HMG-CN that they cannot “legally dispute” any work performed or bills submitted since June 25, 2012.

Pacifica was awarded a $600,000 12-month competitive bid contract in September 2007 to provide technical services during the construction of the Southeast Water Reliability Project to provide recycled water from an area in Pico Rivera to the Montebello Golf Course.

The Montebello Golf Course is owned and operated by the City of Montebello.

One member of the Montebello City Council, who did not want to be named publicly, said they had “never heard of Pacifica Services and had no idea about the agreement between Pacifica and Central Basin.”

“This is news to me, I have no idea who Pacifica Services is or what they represent,” the elected official said.

The contract was extended seven times, valued at over $4 million, without further competitive bidding and by all accounts was done outside of the public glare.

One source, who was close to the process, but requested anonymity, told HMG-CN,  “by anyone’s standards, bidding only one time over nearly six years while pocketing millions and millions of the public’s money is off-the-charts in terms of unusual, but that’s exactly why CBMWD is at the center of this latest storm.”

Another source told HMG-CN that no Board action took place that authorized funding for the modification anywhere near the amount that has been currently billed by Pacifica. “In fact, payments already made of approximately $600,000 were done without Board approval, which are illegal, and an additional $200,000 have been remitted.”

The source told HMG-CN that personnel, directed by then Interim Chief Operating Officer Chuck Fuentes, and Assistant to the General Manager Ron Bielke, at CBMWD were tasked with evaluating the Pacifica contract.

The process involved reviewing millions of dollars of Pacifica’s invoices and interviewing key staff about the validity of the charges, including determining if rates charged were “industry-standard”. There were questions as to whether part of the work invoiced was ever started.

“Given the amount of money involved and the fact that no competitive bidding had taken place since 2007, we had every reason and right to look upon every charge with a microscope” said the source.

The investigation into Pacifica abruptly came to a halt in 2012 when Fuentes, Beilke, and the District’s legal counsel Arnold Alvarez-Glasman were fired.

The vote was 3-2, with longtime member Bob Apodaca, who is related by marriage to Pacifica’s CEO Ernie Camacho, and the two newly elected members Jim Roybal and Leticia Vasquez voting to terminate.

According to California State Conflict of Interest disclosure filings, Roybal, Vasquez and Apodaca have accepted tens of thousands of dollars in campaign donations from Pacifica Services and another firm MLJ Property Management that is located at the same address as Pacifica in Pasadena.

The source said, “this is where the FBI should be looking next, these three are the new kings of pay to play.”

In an interview with HMG-CN, CBMWD Director Art Chacon said that he has been “fighting for years to break the lock Pacifica has on CBMWD’s engineering contracts.”

Chacon cites a 2012 Board meeting where he questioned the District’s management pushing a record setting eighth no-bid extension to Pacifica.

At that same meeting, Chacon also questioned why Apodaca, whose common-law wife Caroline is first cousin to Ernie Camacho, did not excuse himself from voting on Pacifica contracts.

Chacon said that Apodaca “exploded” into a tirade against him, saying at one point that he’s been “trouble” since he got elected in 2006.

According to Chacon, it was March 2012 when District staff was “desperately” trying to push a two-year, $2.2 million final no bid extension to Pacifica. At that time, all previously approved funding for Pacifica had been exhausted.

“I fought that extension month after month,” stated Chacon, “and they kept bringing it back. I saw no reason to give Pacifica two more years.”

With all efforts to secure an eighth extension dead, the Board finally sided with Chacon’s request that the District put the contract out to bid.

Apodaca was the lone no vote.

According to the source, that’s when questionable changes seem to have been made to Pacifica’s existing contract.  “The way the contract was modified, Pacifica was basically allowed to bill as they saw fit on a monthly basis until such time that the contract went out to bid.”

Chacon adds that one excuse after another was given by management, “they seemed to be stalling,” he said.

When personnel, directed by Fuentes and Bielke, began investigating the contracts and billings, Fuentes told HMG-CN that he was threatened by Vasquez and Roybal to not terminate any contracts until they were sworn-in in January.

Fuentes and Bielke kept the investigation going and were subsequently fired, with Roybal and Vasquez siding with Apodaca to terminate their employment.

Thereafter, Roybal, Vasquez, and Apodaca pushed to promote the district’s Water Resources Manager Dave Hill to the interim General Manager position to replace Fuentes.

According to the source, the 8th extension signed by Aguilar was written by David Hill and, “of course he didn’t take the contract out to bid, because he’s the one who wrote the questionable modification as well as being the one who approved all their invoices. Hiring Hill was akin to the fox watching the hen house.”

The new General Manager Tony Perez subsequently replaced Hill.