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January 31, 2024
By Brian Hews • [email protected]
When former Assemblywoman Cristina Garcia’s AB 1794 passed and was signed by Governor Newsom, the bill mandated that Central Basin Municipal Water District (CB) periodically appoint three qualified individuals to its board of directors.
The appointment process was fairly simple, involving water purveyors and large water companies within CB’s boundaries with a timeline of two months. When a seat came up for appointment, CB would send a request for nominations to the purveyors and water companies, wait a month, and then send out ballots with the nominations. The nominee with the most votes would be appointed.
When Directors Michael Gualteri and Thomas Beckele resigned in 2024, both under a cloud of corruption, the appointment process was carried out—in a way that violated the CB Administrative Code—resulting in Golden State Water GM Nem Ochoa and City of Vernon Water Engineer Joanna Moreno “winning” the seats.
If they had not resigned, Gualtieri and Beckele would have termed out in February 2025; that term-out date also applies to Ochoa and Moreno, at least that’s how the law reads.
With the February 2025 term-out date looming, the appointment process under AB 1794 should have commenced in December 2024.
However, CB GM Elaine Jeng, CB attorney Victor Ponto, and certain CB Board members are stalled (and continue to stall) the process, blatantly violating AB 1794 and the CB Administrative Code.
Directors Art Chacon, Jim Crawford, and Leticia Vasquez, upon realizing that the voting process did not initiate in December, expressed their frustration and disappointment and have filed complaints with authorities.
At that critical juncture, President Ochoa and Directors Garza and Moreno had the opportunity to act, but they chose not to, evidently waiting for the outcome of the November 2024 election which included Gary Mendez as a candidate for the CB Division Two seat.
The current Whittier Union High School District Trustee Mendez was elected, with only $8,000 and free help from friends. After Mendez won, sources told LCCN he received a flurry of calls from certain CB Board members.
Mendez has zero relevant water experience, and has attended one CB board meeting. Yet at last Monday’s regular board meeting, in a obvious pay-to-play move, Mendez was appointed vice president. The appointment, with all its perks for Mendez, put President Ochoa and Directors Garza and Moreno in the majority.
Hours later, Victor Ponto’s associate Zach Lopes sent a letter, obtained by LCCN, to all directors stating that CB – and Azusa-based Central Basin Water Association (CBWA) – would send a letter to California Attorney General Rob Bonta asking for an opine to change the terms of Ochoa and Moreno, in effect asking Bonta to alter AB 1794 so the current majority can remain in place.
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The email read, “Attached please find a draft opinion request to the AG concerning the length of tenure for directors Ochoa and Moreno. As you can see, this will be a joint request between the district and Central Basin Water Association, represented by Bill Kruse. [Kruse works for Los Angeles-based Langerlof, LP]. Mr. Kruse is conferring with his client before giving us the authority to send it out on his client’s behalf. As soon as we receive the authority, the request will be sent, and a final copy will be distributed to the board.”
The letter is alarming on many levels, with CB attorneys actively working, and charging CB fees, to subvert AB 1794 without informing the entire board. “Nobody told me or Jim [CB Director Jim Crawford] or Leticia [CB DIrector Leticia Vasquez-Wilson]”, said CB Director Art Chacon. “This is unauthorized and it violates the law and Central Basin Administrative Code.”
Once CB receives the “permission” from CBWA, a “final copy will be distributed to the board,” where it will undoubtedly pass with yes votes from President Ochoa, newly minted VP Gary Mendez, and Directors Garza and Moreno. The letter will then be sent to Bonta.
Under every conflict of interest rule, Ochoa and Moreno would be precluded from the vote, but that has not stopped the certain CB Boardmembers in the past, all who rely on attorney Victor Ponto and his questionable justifications.
And with Kruse, who has not returned LCCN phone calls, and CBWA joining the scheme, another layer of corruption and conflict has been added.
In November 2019, an LCCN investigation revealed that the CBWA, an association that has taken the opposite position on all legislative items concerning CB, failed to report lobbying activity on its financial documents, known as 990s, which violated state, federal, and IRS laws.
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The documents showed that while AB 1794 was winding its way through the legislature, Dan Arrighi and Frank Heldman, both appointed to the CB Board after 1794 passed, were CBWA Board of Directors trying to pass 1794 while not reporting their lobbying efforts, an IRS tax violation.
Grajeda, one of the first appointees under AB 1794, was listed as president and Heldman as a director. Arrighi was in charge of overseeing the financials and was the CBWA’s treasurer.
During that time, CBWA actively lobbied to pass AB 1794, which all elected CB Board Members vehemently opposed.
And CBWA did not try to hide their actions using a corrupt law firm that was later fired by CB.
Nossaman, LP, was CBWA’s law firm at the time. CBWA paid Nossaman to lobby in favor of AB 1794. paying the firm over $76,000 in 2015 and nearly $67,000 in 2017. The payments violated the IRS’ “substantial rule” for non-profits who are paying for lobbying on its behalf.
Shockingly, Nossaman was also representing CB at the time.
CB Director Leticia Vasquez, who was on the board at the time and opposed AB 1794, did not mince words about Nossaman’s work with CBWA: “It’s disappointing that Nossaman failed to follow the law and properly report to Central Basin that the Central Basin Water Association hired them to work as their lobbyist while simultaneously serving as Central Basin’s attorney. That was a clear conflict of interest.”
Now, CBWA is attempting to influence yet another CB nomination process by participating in a scheme (with yet another questionable law firm and attorney) that violates state law and the CB Administrative Code while robbing Los Angeles-based water purveyors and water companies of their chance to vote for someone who will represent their interests and the interests of their customers.
Emails into CB officials and counsel were not returned.
