EXCLUSIVE: Central Basin Director Leticia Vasquez Continues Questionable Legal Fight For Multi-Million Dollar Payday

CBMWD Leticia Vasquez filed an amended complaint to her whistleblower lawsuit against the very agency she was elected to defend.

By Brian Hews and Randy Economy

Hews Media Group-Community News has learned that the attorney for embattled Central Basin Municipal Water District Director Leticia Vasquez submitted an amended claim today for her Qui Tam “whistleblower” lawsuit that alleged past illegal activities at the Commerce based water wholesaler.

This is evidenced by the fact that the lawsuit was due to be dismissed today but was not.

The attorneys for CBMWD will now answer the amended complaint, with a new hearing set for October 10, 2014.

In August 2013, Vasquez filed a Qui Tam “whistleblower” lawsuit with the State Attorney’s General alleging that the law firms of Buchalter Nemer and Sedgwick Detert Moran & Arnold, attorneys Doug Wance and Curtis Parvin, former GM Art Aguilar, and 50-“does” had illegally formed a secret trust fund to defraud the CBMWD out of $2.7-million.

It is an unheard maneuver for a sitting Director to file a lawsuit against the very agency she was elected to defend.

Attorney General Kamala Harris rejected the case because no state money was involved and forwarded the complaint to CBMWD.

Then-CBMWD General Counsel Rick Olivarez was given the authority to decide how to proceed with the case, and in January 2014 informed the court that CBMWD would not “intervene” or join the lawsuit.

A few weeks later, in a movement led by Vasquez, Olivarez was fired by CBMWD.

Subsequently, Vasquez chose to pursue the lawsuit by herself, which could net her over $2-million if she prevails.

A hearing to consider dismissal of the case was held on July 23, 2014, where an obviously perturbed Judge Susan Bryant-Deason sided with defendants, Sedgwick and Buchalter, ruling that Vasquez had not proven that she had exhausted all internal procedures in reporting the alleged fraud and that the District had failed to act.

Additionally the judge indicated that Vasquez and her attorney needed to go back to Attorney 101 class because they had not proven  the simple fact the District had waived attorney-client privilege, a waiver being necessary for the defendants’ to have a proper defense, and for the case to continue.

As a result, Deason ordered Vasquez’ attorney to provide a waiver from the CBMWD Board within 30-days or face dismissal of the whistleblower lawsuit.

Sources told HMG-CN that it would be virtually impossible for a waiver ever to be granted which would place Vasquez in a very difficult position with respect to her fellow board members.

In early 2013, CBMWD hired the law firm of Arent Fox and commenced its own independent investigation into the existence of a “slush fund” initially identified by former CBMWD executives Chuck Fuentes and Ron Beilke.

Both were unexpectedly fired in Jan. 2013 by Vasquez, along with support from close ally James Roybal and former majority member Bob Apodaca.

Soon thereafter federal subpoenas were served on CBMWD pertaining to the trust fund.

Sources told HMG-CN at the time that the Calderons, Pacifica Services, and other firms were involved in the slush fund.

According to established rules, for a public employee filing a whistleblower lawsuit, that employee must have raised concerns within the public agency and those concerns must have been ignored.

When the concerns are acknowledged, the public agency must be given the opportunity to first investigate and resolve the issues.

By conducting an internal investigation with the hiring Arent Fox, CBMWD clearly responded to the concerns.

Arent Fox has now completed the investigation, posting a summary of the findings on the CBMWD website.

According to Vasquez’ complaint, she claims to have attempted many times to get CBMWD to address her concerns surrounding the $2.7 million “slush fund” but said she “found no support to do anything to investigate its existence.”

But Vasquez’ complaint failed to address the hiring of Arent Fox to conduct the internal investigation.

Ron Beilke, a former Assistant to the General Manager at CBMWD, who attended the July 23^rd hearing, questioned the statements Vasquez’ attorney made in regards to his client’s “discovery” of the slush fund.

According to Beilke, “Vasquez’ attorney claims that she began inquiring about the slush fund immediately after taking office on Jan. 7, 2013. She wanted the public to believe that she somehow “discovered” the potentially illegal transfer of funds. But, as reported by HMG-CN, Chuck Fuentes had briefed her, Roybal, and the previous Board of its existence.”

Beilke continued, “After Chuck and I, along with then-general counsel Arnold Alvarez-Glasman, began developing a strategy to investigate the trust fund, we were all three unexpectedly terminated.”

Beilke claims Vasquez already had the whistleblower lawsuit in mind at the time of their firing.

Vasquez was ordered to return to court on October 10th to argue the deficiencies in her case pointed out by the defendants’ attorneys and Judge Deason.

When asked why Vasquez would continue to pursue the lawsuit given its obvious weaknesses, and the risk of a counter-suit by the defendants if the case were to fail, Bielke responded, “Vasquez is desperately working to unseat Apodaca and Chacon and have her slate elected to regain a Board majority. With a Board majority, she feels she will have the votes to settle the suit with a favorable financial award.”

Beilke continued, “Vasquez is well known to be a shake-down artist, associating with known convicted felons, and is willing to risk District money for personal gain.”

The felon Beilke was referring to was Rick Mayer and convicted felon who plead down to a misdemeanor Angel Gonzales. Recently filed campaign forms show that Vasquez recently repaid her campaigns debts owed to Mayer.

HMG-CN is currently investigating the cost to CBMWD of the lawsuit filed by Vasquez. Sources said, the costs “ran into the tens of thousands of dollars, and very possibly into the hundreds of thousands.”

Calls into Director Vasquez went unreturned.