OP-ED: Central Basin and the Cost of Inaction by the F.B.I. and U.S. Attorney

Law enforcement and District Attorney’s failure to indict Board President Bob Apodaca will cost Central Basin Municipal Water District ratepayers millions of dollars.

By Brian Hews

No one is paying attention.

It seems as if no one in Los Angeles Law Enforcement or downtown at the Clara Shortridge Foltz Criminal Justice Center, a.k.a. the District Attorney’s office, is paying attention to the fiasco that is Central Basin and in particular CB President Bob Apodaca.

HMG-CN was the first to report and identify in May that Apodaca was the “elected public official” cited in a new U.S. Attorney filing this past April linking him to the Calderons and the wide-ranging bribery scheme.

No one paid attention.

It was first revealed by HMG-CN that Apodaca took a paid job as a staffer with State Sen. Ron Calderon, a job that he never really worked at, in exchange for landing a CB contract for Ron’s brother Tom Calderon. Also revealed was the fact that Apodaca did not file his Statement of Economic Interests, Form 700, a clear violation of the Political Reform Act that will carry a heavy fine.

No one paid attention.

Friday June 5, HMG-CN was once again first to report that Apodaca has “flipped” and will testify against his long-time friends, the Calderons, in the upcoming public corruption trail in exchange for a guilty plea and no time served.

No one paid attention.

But they might now pay attention because the price of inaction against Apodaca could cost CB millions of dollars, paid for on the backs of CB ratepayers.

Apodaca’s performance record as a CB director has been less than stellar in recent months, a time period where the U.S Attorney could have acted and forced Apodaca to resign. Let’s review:

• In January 2013, Apodaca votes to fire interim-General Manager Chuck Fuentes with only 60-days and $20,000 remaining on Fuentes’ contract. Fuentes files a wrongful termination claim, which the District’s insurance carrier ACWA-JPIA settles for $50,000. Apodaca’s partner in corruption Board President Jim Roybal subsequently violates the confidentiality clause of the settlement agreement by leaking details to the Whittier Daily News, exposing the District to additional legal liability. Immediately after, Fuentes files another lawsuit for breach of contract and defamation, which is ongoing.

• In January 2013, Apodaca votes to fire Assistant General Manager Ron Beilke, 30 days after Beilke was hired. Everyone knew Fuentes and Beilke were fired for initiating an investigation of questionable payments made to long-term CB contractor Pacifica Services Inc. (PSI). PSI President Ernie Camacho is the first cousin of Apodaca’s common-law wife, Caroline Medrano, and has contributed tens of thousands to Apodaca’s election campaigns. In exchange, Apodaca, over the past 8-years, voted to approve seven no-bid contracts and illegal extensions to PSI totaling over $5-million, despite the clear conflict of interest. Beilke has since filed a lawsuit against the District for wrongful termination and defamation which is ongoing.

• In June 2013, a former contractor, Ms. Sigrid Lopez, files a $1-million claim against Apodaca alleging sexual battery, wrongful termination, and harassment. The District’s insurance carrier ACWA-JPIA eventually settled the subsequent lawsuit in June 2014 for $670,000.

• In June 2013, the District is served with the first of several subpoenas relating to the federal investigation into corruption charges against Ron and Tom Calderon. Both were indicted in February 2014 on federal charges of bribery, money laundering, and fraud. HMG-CN was first to report that Apodaca had been interviewed at least 5-times by federal law enforcement authorities, and told to “get his own attorney” as the evidence against Apodaca was very strong. Now, Apodaca has agreed to testify against the Calderons.

• Apodaca, along with his partners in corruption, James “Teacher Jail” Roybal and Leticia “Qui Tam” Vasquez vote to suspend the Ethics Committee in October 2013. The Committee had ordered an investigation and submission to the Grand Jury the improper payments of $10,000 to Apodaca’s common-law wife, Caroline Medrano.

• In April 2014, the District’s insurance carrier, ACWA-JPIA writes a letter to CB threatening to cancel the District’s insurance for “board dysfunction”. JPIA offers to continue the District’s coverage conditional upon, among other things, “The District will assume responsibility for paying any negotiated settlement with Ms. (Sigrid) Lopez”, and if the matter fails to settle, that the District accept “…responsibility for the defense and any payments to Ms. Lopez.” A Special Meeting was scheduled to discuss a response to JPIA’s threat, but Apodaca, along with Roybal and Vasquez, failed to attend, forcing a cancellation of the meeting. JPIA cancels the District’s insurance coverage 60-days later.

• In August 2014, Moody’s Investors Service downgraded CB’s rating on approximately $53 million in debt. This will cost CB millions in interest payments. The debt is secured by a senior lien on net revenues of the district. Moody’s pegged CB with a negative outlook.

• In June 2014, Apodaca leads an effort to approve the settlement of a lawsuit with Camacho’s PSI for $870,000, a blatant conflict of interest as PSI President Camacho is the first cousin of Apodaca’s common-law wife, Caroline Medrano, and has contributed tens of thousands to Apodaca’s election campaigns. Apodaca manages to get the votes giving PSI a windfall settlement. This was 30-days prior to PSI employees scheduled depositions by CB attorneys.

• In October 2014, Apodaca votes to fire General Manager Tony Perez for cause. This despite the District offering Perez a written proposal for 12-months severance and informing Perez that he had 21-days to review proposal. Perez is informed in a phone call by the Human Resources Director that he has been terminated for cause as he is driving home from the Board meeting several hours later. Perez subsequently files an $8.2-million wrongful termination claim against the District and Directors Apodaca, Roybal and Vasquez. Perez’s claim is ongoing.

• In October 2014, Apodaca illegally votes to waive attorney-client privilege in Director Leticia Vasquez’ Qui Tam whistleblower lawsuit against District vendors, directors, and former General Manager Art Aguilar. Vasquez stands to make over $2 million if she prevails, paid by the District. Apodaca’s vote exposes the District to millions in legal fees and penalties, despite being first warned by the District’s attorneys that Vasquez was financially conflicted and could not participate in the vote.

• In December 2014, HMG-CN reported that Apodaca had been ranked 57^th out of the 100-worst bosses in America by the website, eBossWatch. All managers on the eBossWatch list were accused of sexual harassment, discrimination, retaliation and/or creating a hostile work environment; and have cost their employers over $52-million in settlement awards.

• In March 2015, HMG-CN reported that the California State Legislature’s Joint Audit Committee has ordered a financial audit of CB. Los Angeles County Supervisor Don Knabe who passed an Emergency Resolution calling for the audit stated, “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.”

Federal law enforcement officials are in the unenviable position of having to negotiate with a bottom feeder like Bob Apodaca to land their big fish, the Calderon brothers.

But they did not have to turn a blind eye to Apodaca for the past two years and let him run amok, costing CB millions.

The U.S. Attorney had tremendous leverage over an aging, corrupt public official. They could have hung a long jail sentence over Apodaca’s head, forced him to resign his seat on the CB Board, and still obtain all the evidence Apodaca had to convict the Calderons.

HMG-CN appreciates the difficulty and importance of building a strong case against the Calderons, but the U.S. Attorney should not ignore the needs of the District’s ratepayers.

Law enforcement officials and the U.S. Attorney know that Apodaca is guilty of crimes that include bribery and misuse of public funds, the mere fact he was told to get his own attorney by the law firm that is representing CB in the Calderon corruption case speaks for itself.

Apodaca is the centerpiece of a criminal “pay-to-play” culture at CB that has been in existence ever since he was first seated over 16-years ago.

Apodaca is a dictator, and as with any dictatorship, whenever a threat to the existing power structure surfaces, dictators move swiftly to quash the threat. As evidence, he fired Chuck Fuentes, Ron Beilke, Tony Perez, and dissolved the Ethics Committee.

Every day that “Battery” Bob Apodaca remains in office is another day that District ratepayers are forced to endure gross mismanagement, dysfunction, and decisions driven by greed and criminal self-interests.

Law enforcement officials and the U.S. Attorney are fully aware that Apodaca is guilty of crimes that have cost the District millions, and yet he is allowed to remain in office and continue to make decisions that will cost the District millions more.

Apodaca should not, and cannot, be allowed to remain in office; it is time to act.

The ratepayers of Central Basin have suffered long enough. It’s time for law enforcement to pay attention and do the right thing.