Attorney agrees to plead guilty to bribery in kickback scheme tied to DWP billing case

·7 min read
Irfan Khan  Los Angeles Times NEWLY OBTAINED documents raise further questions about how Paul Paradis, shown with lawyer Angela Machala outside L.A. County Superior Court, won lucrative contracts from the Department of Water and Power while he was working for L.A. City Atty. Mike Feuer.
Paul Paradis, shown with attorney Angela Machala, outside L.A. County Superior Court in 2019. (Irfan Khan / Los Angeles Times)

An attorney hired by City Atty. Mike Feuer's office has agreed to plead guilty in a scheme involving a $2.2-million kickback and bribes to the top executive at the Los Angeles Department of Water and Power in exchange for a lucrative contract, prosecutors said Monday.

Paul Paradis, 58, of Scottsdale, Ariz., agreed to plead guilty to one count of bribery and is cooperating with the ongoing federal criminal investigation, prosecutors said.

In a 46-page plea agreement, prosecutors laid out how Paradis took part in a plan to settle a high-profile lawsuit brought against the DWP on terms that were favorable to the city and himself.

He simultaneously represented the DWP and a DWP customer who was the lead plaintiff in a class-action lawsuit against the city, prosecutors said. He also went on to receive a $30 million contract at the utility.

David Scheper, Paradis' attorney, said that "out of respect for the ongoing investigation we have no comment."

Feuer, who is running for mayor, is likely to face renewed questions about his oversight of the city attorney's office following the announcement of the plea agreement.

At the same time, there is likely to be fresh scrutiny of the DWP's oversight. Both a former general manager and a board member, who are unnamed in the plea agreement, are accused of scheming to accept bribes from Paradis that included promises of a million-dollar salary and a luxury company car.

Paradis was first hired by Feuer's office to represent the city in litigation stemming from the 2013 billing disaster at the DWP. The city launched new billing software that overcharged hundreds of thousands of customers, prompting several lawsuits against the utility.

As part of the plan, Paradis asked an Ohio attorney he knew to "play the role of the attorney" representing the lead plaintiff in the class-action lawsuit, according to the plea agreement.

In reality, that lead plaintiff — Van Nuys customer Antwon Jones — thought that Paradis was his attorney. Months earlier, Jones had retained Paradis, hoping to sue over his faulty DWP bill, but Paradis never informed Jones that he was working for the city, according to court documents.

According to the plea agreement, Paradis told the Ohio attorney that "defendant Paradis would do all or most of the work in the case, and that in exchange, defendant Paradis wanted twenty percent of Ohio Attorney's fees as a kickback."

The Jones vs. City settlement, which Paradis helped craft, gave the Ohio attorney who represented DWP customers $10.1 million in attorney fees.

Paradis ultimately collected a $2.175-million kickback from the Ohio attorney, according to the plea agreement. The money was transferred through a "shell company" that Paradis created to "transfer and conceal the illegal kickback payment."

The plea agreement also says that the plan to quickly settle the lawsuit brought against the city was known inside Feuer's office. "At least one member of the City Attorney's Office" attended a meeting where Paradis and another attorney were "directed and authorized to find outside counsel that would be friendly to the city and its litigation goals," prosecutors said.

Rob Wilcox, a spokesman for the city attorney's office, told The Times that "if that allegation is true, that conduct would be utterly inconsistent with the standards" of Feuer's office.

"I am beyond outraged that anyone would breach their duties to the public we serve, as this plea agreement reflects," Feuer said. "As public servants, integrity must be our watchword, our guiding principle. At the end of the day, that’s all we have. We can have no tolerance for betraying the public trust."

The plea agreement lays out how Paradis managed to use his leverage at both the city attorney's office and the DWP.

Paradis created a new company called Aventador Utility Solutions LLC to contract on future work for the agency with “the knowledge and authorization” of DWP’s general manager and others at DWP, prosecutors said.

Times Investigation: After overcharging fiasco, DWP’s lawyer accused of double-dealing

Paradis met privately with the general manager at a Riverside hotel on or around Feb. 10, 2017, to discuss “ways that DWP General Manager could benefit financially from Aventador” and the fact that they intended for Aventador “to secure a lucrative no-bid contract with LADWP,” according to the plea agreement.

It was decided that the general manager would work to ensure that the agency’s board awarded a contract to Aventador in exchange for a number of benefits, according to the plea agreement.

The two men agreed that the general manager upon retiring from the DWP would join Aventador as the company’s CEO, receiving an annual salary of about $1 million and a new Mercedes SL 550 as his company car, according to the plea agreement.

The DWP's general manager in 2017 was David Wright. Neither Wright nor his attorney responded to a request for comment on Monday. Wright was removed from his job after the FBI raided the DWP and city attorney's office in July 2019.

The raid occurred months after consulting firm PricewaterhouseCoopers, which was fighting the city in court over the DWP billing debacle, first raised concerns about Paradis' role and the DWP contract.

The plea agreement alleges that Paradis was actually “ghostwriting” most of the periodic reports that a court-appointed independent monitor was submitting to the Los Angeles Superior Court judge overseeing the Jones vs. City lawsuit.

Paradis “drafted nearly all” of the independent monitor’s reports with “the knowledge and approval of multiple LADWP officials and employees,” according to the plea agreement. Paradis also treated the independent monitor to meals, drinks and attendance at sporting events “on multiple occasions,” according to the plea agreement.

On or around early May 2017, Paradis drafted another court report for the independent monitor, according to the plea agreement. The primary goal for this ghostwritten report was to provide the general manager with support for the DWP board’s upcoming vote on awarding Aventador with a $30-million no-bid contract, according to the plea agreement.

During his presentation to the DWP board immediately before their vote on June 6, 2017, the general manager cited an independent monitor report drafted by Paradis, telling the board that the agency would be unable to meet its obligations under the Jones vs. City settlement unless it contracted with Aventador, according to the plea agreement.

The general manager did not disclose his arrangement to lead Aventador after retiring from the DWP, nor did he disclose the promised $1-million annual salary and Mercedes to the board, according to the plea agreement. The board voted unanimously to award Aventador a three-year, $30-million no-bid contract after the general manager’s presentation.

One member of DWP’s board solicited unpaid legal services and assistance from Paradis ahead of the vote before ultimately supporting the contract, according to the plea agreement.

That DWP board member began communicating with Paradis about an unrelated legal matter about one week before the vote, soliciting information “about the judge handling the matter and various pleadings and legal documents to use in his lawsuit,” according to the plea agreement.

Times investigation: Before the double-dealing allegations, there were red flags over $30-million DWP contract

Paradis provided some of the requested information and agreed to provide additional requested materials in a bid to “gain favor with LADWP Board Member so he would support the contract,” according to the plea agreement.

According to the plea agreement, that board member encountered Paradis in the hallway at DWP shortly before he entered the board meeting room ahead of the vote on June 6, 2017.

The board member expressed appreciation for Paradis’ help on the unrelated legal matter and said words to the effect of, "You take care of me, I take care of you,” according to the plea agreement. Paradis understood this to mean that the board member would vote in favor of the $30-million no-bid contract if he continued to provide the board member with “unpaid legal services and assistance” according to the plea agreement.



Paradis and his law partner continued to perform legal work for the board member until early August 2017; collectively they performed approximately 36 hours of legal work, which Paradis valued at over $30,000 based on their respective billing rates, according to the plea agreement.

This story originally appeared in Los Angeles Times.

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