DWP, reeling from scandals and FBI raids, gets a new watchdog office

Months after federal investigators raided the Los Angeles Department of Water and Power, Mayor Eric Garcetti on Thursday announced the creation of an inspector general’s office at the utility.

The office will oversee the DWP’s internal audit and special investigations divisions, as well as initiate investigations, the mayor’s office said. The office also will provide oversight of contracting matters, whistleblower complaints, ethics and other internal policies.

The mayor’s office said that it has retained Dan Schnur, the former chairman of the California Fair Political Practices Commission, to advise on the creation of the office, including how many employees are needed. Schnur is being paid by the city for his advisory work, but the financial details are still being worked out, Garcetti spokesman Alex Comisar said.

Garcetti’s announcement comes as he seeks to bring order to the utility, which is ensnared in several scandals and an FBI investigation stemming from the city’s handling of the 2013 billing debacle, in which hundreds of thousands of DWP customers were overcharged.

One day after raids by the FBI in July, Garcetti pushed out DWP general manager David Wright, while three other DWP employees stepped down.

The inspector general’s office will help the utility “uphold the highest standards of integrity and improve customer confidence,” Garcetti said in a statement.

Schnur told The Times that he plans to start almost immediately and will assist in the search for the inspector general. He said the “people of Los Angeles not only deserve reliable water and power, but they also deserve to be reassured that there’s a system in place that’s watching out for them.”

The inspector general will be hired by the DWP’s general manager, the mayor’s office said. The City Council on Friday confirmed Marty Adams as the utility’s next general manager.

Adams is the third DWP general manager appointed by Garcetti since 2013, with the turnover reflecting the utility’s long-standing problems. Garcetti was elected mayor after running a campaign focused on reforming the DWP, but controversies have persisted at the utility during his two terms. According to sections of a search warrant obtained by The Times, federal investigators sought evidence of a wide array of possible crimes, including bribery, kickbacks, extortion and money laundering.

The FBI is probing issues related to the city’s settlement of a class-action lawsuit filed over inaccurate DWP bills that resulted from the launch of a new billing system. Investigators also want to know about DWP contracts given to an attorney who was working at the time for the city attorney’s office on billing litigation, and information related to the utility’s handling of cybersecurity and physical security issues.

Separately, a top auditor in City Controller Ron Galperin’s office last month filed a claim against the city, alleging that the controller’s office received complaints about DWP contracts, but failed to appropriately act.

Galperin’s office has said it handled its audits properly. In a statement Thursday, Galperin said he looks forward to “working with the mayor to ensure that the Office of Inspector General increases transparency and accountability at the DWP.”

A spokesman for Local 18 of the International Brotherhood of Electrical Workers, the union representing most of the DWP’s workforce, didn’t respond to a request for comment.

The DWP’s Office of Public Accountability was billed as a watchdog for the ratepayer when voters moved to create the position in 2011. But that office has been more focused on issues related to the utility’s water and electricity rates.