Central Basin Water Director Vasquez Party to Lawsuit Against Own District Seeking Millions

Wednesday January 22, 2013, 11:06 a.m.

Central Basin Water District Director Leticia Vasquez, who took office only one year ago, is a party to a whistleblower lawsuit against the very district she was elected to represent.

By Brian Hews and Randy Economy

Hews Media Group-Community News has obtained documents that indicate Central Basin Municipal Water District Director Leticia Vasquez is a party to a “Qui Tam” whistleblower lawsuit against CBMWD, suing the district for the now infamous $2.7 million “slush fund,” an unprecedented move by an elected official and one that could net Vasquez over $2 million.

A “Qui Tam” action is also known as the False Claim Act and allows whistleblowers to bring civil fraud lawsuits filed on behalf of the government against companies and individuals that are allegedly cheating the government.

CBMWD could be on the hook for triple damages amounting to over $8.1 million plus fraud charges if found guilty.

Vazquez, as a plaintiff herself, could walk away with over $2 million.

Vasquez, who was recalled as a Councilmember in scandal plagued Lynwood, and according to sources, avoided prosecution by turning state’s evidence that helped send many of her then-colleagues to prison, is now a self-proclaimed whistleblower.

Vasquez was elected to CBMWD under a cloud of shady dealings and contributions from questionable sources. Engineering firm HDR, Sedgewick attorney Doug Wance, Ernie Camacho and his company Pacifica, MLJ Properties, owned by Camacho’s children, and Ron and Tom Calderon gave Vasquez over $14,000 for her campaign. Most of the contributors are now targets of the FBI and its investigation of CBMWD and the Calderons.

In addition, in February an exclusive HMG-CN investigation revealed that Vasquez’ campaign was financed by convicted felon Rick Meyer and Angle Gonzalez, who was charged with a felony but pled down to a misdemeanor.

Documents and interviews point to Vazquez having the lawsuit in mind from the very start of her term at CBMWD using insider information not available to the general public to file the lawsuit against her own public agency.

Vasquez was sworn into office on January 7, 2013. By then Vazquez knew of the $2.7 million slush fund through administrative briefings given by then General Manager Chuck Fuentes, Assistant GM Ron Bielke, and CBMWD Attorney Arnold Glassman.  It was Fuentes, Bielke and Glassman who originally found the obscure fund.

Within days of the swearing-in, Vasquez formed a voting-bloc majority that included President James Roybal and Director Bob Apodaca. The three immediately moved to suspend provisions of the Administrative Code and circumvent the proper selection of a Board President, ousting Director Art Chacon, who was the most vocal critic of the slush fund, and removing Chacon and Director Phil Hawkins from several committees.

In a highly unusual and controversial move, Vasquez voted to fire Fuentes, Bielke, and Glassman, removing those responsible for finding the slush fund.

The three were preparing to hire a firm to audit the fund but Sedgewick LLP, the firm paid over $1,000,000 from the fund and their attorney Douglas Wance, were slow in giving the documents.

But the fact remained, and Vasquez knew, that an investigation had started and information was being reported, which resulted in Director Chacon dubbing it the slush fund.

The question remains as to why Vazquez put a stop to the investigation by firing Fuentes, Bielke, and Glassman.

HMG-CN became aware of the whistleblower lawsuit when the item was “reported out” of Closed Session following the October 3, 2013 Board meeting.

The report showed that the Board had discussed a “Qui Tam whistleblower matter” and that CBMWD hired special counsel Craig Engle with the State’s Attorney General Office to represent the District. The case number is BC 518653.

An audio of the Jan. 6 Special Board meeting indicates attorney Richard Padilla warning Vasquez of a potential financial conflict in relation to Item 3B which was discussed in closed session. Vasquez participated in the session ignoring Padilla’s warning.

Item 3B referred to at the Jan. 6 meeting had the same case number as the case Padilla reported out of closed session on October 3rd, 2013, confirming that Vasquez filed the lawsuit or is a party to the lawsuit.

Ignoring Padilla’s warning and remaining in the discussion about the lawsuit also gave Vasquez additional inside information, which could be a violation of federal laws.

HMG-CN requested legal billings for all legal services billed in relationship to the matter. It is rumored that that the financially troubled water district has spent in excess of $50,000 to date.

Because the slush fund was administered by District legal counsel under the secretive veil of “litigation” strategy, little is known of how the $2.7 million was actually spent.

The water agency has retained the law firm of Arnett Fox to conduct a full inquiry and analysis.  It is also reported that federal authorities are also actively investigating the secretive fund.

HMG-CN contacted other CBMWD Directors but they declined to speak on the matter.

But sources close to the district expressed doubt that a sitting Director could legally be a plaintiff against the agency they represent.  “This is probably unprecedented; an elected official does not attempt to reap a financial windfall from suing the organization they were elected to serve, but this is Leticia Vasquez we’re talking about here. This is probably a scheme concocted by her ambulance chasing boyfriend to make a quick buck, she was acting with the benefit of insider information given her position, which makes the case all that much more preposterous.”

The source added, “Vasquez sees this as a win-win situation where she can come off as a hero to the public being a “whistleblower” trying to make some quick cash legally for her efforts.”