Investigation Reveals Water Executives Spending Money Like Water

goldstein water investigation Investigation Reveals Water Executives Spending Money Like Water

(credit: CBS)

LOS ANGELES (CBS) —Water rates may have gone up 70 percent in the past six years but, but our undercover investigation found water executives spending money like water.

Our hidden cameras captured three directors of the Metropolitan Water District drinking wine and toasting, just days after your water rates went up for the 6th year in a row.

They were staying at a Downtown L.A. hotel and eating meals, charging some of it to the ratepayers — using your money.

James Blake, who represents Fullerton, was one of them.

Receipts that we obtained showed that Blake stays at the Downtown Marriott just about every month during the board’s two-day meetings — instead of driving home.

The water district allows it.

We found charges for rooms and also for the hotel lounge.

Blake claimed that the bottle of wine we videotaped him bringing to the table was from his personal wine cellar.

But he defended charging ratepayers for the hotel and meals, claiming his 27-mile commute Fullerton would be too much.

“How many hundreds of thousands of people in Los Angeles make that same drive and they don’t have the luxury of staying at a hotel,” I asked him?

“I’m not concerned with them,” Blake said.

“You’re not concerned with them? But they’re the ones who are paying the extra money now. You just raised rates,” I responded.

We found receipts for other directors, who also stay at downtown hotels, including board chairman John Foley. Our hidden camera also captured him during the toast.

Earlier that day we videotaped him checking into the Downtown Marriott at ratepayer expense, instead of driving home to Laguna Nigel. He was greeted by the bartender at the hotel lounge.

“Hi sir, how are you? Want to have a glass of wine,” she asked him.

Foley nodded yes. Later we saw him drinking and a hotel receipt we obtained shows a lounge charge.

But at the next board meeting, his handlers ushered him away when we tried to talk with him.

The Metropolitan Water District is a government agency that is the wholesale supplier for 26 cities and districts in Southern California, including the City of L.A.

Rates have gone up nearly 70 percent in the last six years and they are looking into the possibility of raising them again next year. So we wanted to find out how the district is spending its money.

We obtained credit card statements and expense reports for dozens of executive employees and found them spending money like water.
We found more than a million dollars in charges over a 20-month period for conventions, meetings and trips all across the country.

From January 2010 through August 2011, it broke down to more than $828,154 in airfare, $193,045 in hotels, and $56,474 in meals.

We found lavish charges like a $599-a-night hotel room in Washington DC; dinners including expensive NY strip steak, rack of lamb and Maine lobster; car service charges; and even a helicopter rental.

We also found other perks, such as $16 hotel in-room movies and minibar charges for everything from M&M’s to bottled water.

Yes, bottled water. I asked the water district’s general manager if he found that ironic.

“I’m not aware of those. I would have to look into it,” Metropolitan Water District General Manager Jeff Kightlinger responded.

Kightlinger, who personally made more than $300,000 last year, said there was nothing wrong with it.

I asked him what he would say to ratepayers when they look at all the expenses, meals, hotels and airfare, when rates have gone up so much and may go up again.

“It’s a necessary cost of doing business,” he said.

Kightlinger said the rate hikes are necessary to repair an aging infrastructure, adding that he has cut expenses over the years.

But we found receipts for him, including a $680 dinner for six at Donovan’s Steak House in San Diego, $172 dinner for two at STK Steak House in Las Vegas and a $1,861 dinner for 20 at the Waterbar in San Francisco — including six bottles of wine at an average cost of $55 each.

Alcohol is not prohibited and ratepayers paid for every drop.

“That was a celebration dinner for passing 2009 legislation, so we authorized a purchase for alcohol for it. That was an exception,” Kightlinger said.

“And you think the average taxpayer, the average homeowner and the average water user can understand that,” I asked?

“You know, we’ve covered this a little bit. Yes,” he replied.

But Kris Vosburgh of the Howard Jarvis Taxpayers Association said it is wrong.

“Why is a good bottle of wine the necessary cost of doing business? Why does someone have the mentality to associate wine and water,” Jarvis said adding, “This is just nonsense, self-serving nonsense.”

But Kightlinger said the wining and dining are only a small portion of their $1.6 billion budget.

However, it is one that ratepayers may remember the most.


After our story aired, the Metropolitan Water District produced a receipt which showed a corkage charge for a bottle of wine on the night we videotaped the directors at the hotel. They say this supports Mr. Blake’s position that he brought the wine from his personal wine cellar and did not charge it to the district.

More from David Goldstein
  • House Cleaning Time

    Greedy pigs in power at the top do this everywhere.

  • Audrey Trombley

    Go get them DAVID..They need to be FIRED EVERY LAST ONE OF THEM. The GALL of them..

  • Clay Scott

    David – I am sure this is only the tip of the iceberg. It’s the City of Bell all over again. How long has this elderly group of cronies been together and sticking it to the ratepayers? Where is the accountability?

  • junior flores

    ATT: DAVID GOLDSTEIN; can you do an undercover investigation on the city of Colton ca Electric? We are paying way too much $400.00 a month for a two bed room house an $600.00 in the summer time .everyone i talk to in colton are paying the same ,whats going on they have nothing to say when i ask them about its to high. somethings wrong here,I never had to pay so much in other citys that is edison my bill was no more then $30.00 amonth an $50.00 in the summer , PLEASE HELP US HERE IN COLTON CA ,Thank you hope to hear from you ,Junior

  • R Gedman

    Great report Dave. Although I think you missed one small factor that is not so small. I am a retired business executive who dealt with expense reports a great deal. THe standard rule for the companies I worked for was if you are going to tip you can do 20%, max of 25% if you received excellent service and you are entertaining top executives of companies. If you remember, the Water exeutives (or bandits might be a better tag) put a $400 tip on the Waterbug tab. This tab was $1,250 before tax. That is equal to 33%. If I ever submitted an expense report with this kind of tip, I would be paying the difference out of my pocket.
    To the executive that is making over $330,000 a year I wonder why the people who work under you do things like this when you have no problem with them doing this. You are setting a wonderful example.
    One other point for the old “Fart” that did not care what we thought- I wonder if you are thinking about what we think now. Also, you may want to think about retiring.

    • Friend of Jim

      I know that old fart personally and he does not draw a salary from the water district. So for his donated consultation, he gets to enjoy a little wine and a local night stay.

      The LA Water Districts Cartel like corruption I won’t dispute, but Jim Blake was taken advantage of by CBS and they should be ashamed for abusing him like this and slandering his image for the sake of a lead story.

      He is a nice gentleman who served our country as Marine and FBI agent. The wine IS from his collection. He has donated millions to local hospitals. But these are actual facts, and that doesn’t seem to be CBS style.

      • waytoold

        When you sleep with dogs so you are!!!! Birds of a feather stick together,so he was good at stealing and donated millions , why didn’t help those that made those millions.All the rich use the poor and then at the end of their lives they built libraries to themselves ,how does this help those that the rich used like dogs??? Shame on them need to eliminate their DNA off the planet!!!!

      • osiris1964

        ..please read the article..your friend is NOT paying for this with money from donated consultation fees (LOL)..but were charged to an account that WE pay….
        donated MILLIONS to charity?????? my god!! how much does this guy make out of his “consultation”?? your declaration opens up MORE questions…

  • osiris1964

    where are our elected officials who suppose to protect us from this?? perhaps at the same room having wine with these crooks..

    • Not quite an insider

      These are your elected officials

  • Wantodrive

    This is quite a eye brow raiser. These water executies raised the rates so much that I think it would be cheaper to let wine flow through the pipeline instead of water.

    To be fair to these executives, all the facts need to be verified first before a ruling is made on the acts of these executives. Did they really use public funds for their own personal convenience? Tax payer’s money should never be used on items like wine, luxury hotels, pricey meals, etc.

    I don’t want to jump into a quick judgment because I do not have all the facts. I will wait for an official inquiry regarding these allegations. The executives should be given the right to explain themselves. They are innocent until proven guilty.

  • william haines

    well i can’t get too excited about all that. if you want great people to make awesome and extraordinary decisions you have to allow them some perks. we are living in what is essentially a desert and it takes a few gutsy guys to bring water here and enable millions of people to live here. i say let them drink wine so we can drink water!!!

  • the Metropolitan Water District

    This is to the people of Los Angeles:

  • Jimbo

    Great Stoy! were glad someone is watching these arrogant so-called leaders! Raiseing our frickin rates again?????

  • Pedro

    The rates have been going up because we use less and less water each year due to drought and water conservation. Most of the costs of the water system are fixed. So the unit price has to increase to cover those costs and maintain water reliability, something most people take for granted.

  • Missy

    I’m typically not a fan of the CBS evening news due to the rudimentary format. However, last night I happened to stay on the channel following my previous television program. I was appalled this was even a story. Most of these men your hidden camera followed are volunteers. They volunteer their time and energy to try to fix a problem that in the end benefits us. There is a high demand for and a low supply of water. Perhaps you should have emphasized that these people are volunteers which would make it more understandable that they would not be willing to drive home when they have two days of meetings in Los Angeles. The story states “hundreds of thousands of people in Los Angeles make that same drive and they don’t have the luxury of staying in a hotel” but are they working for free? I feel a hotel stay and a dinner is nothing compared with a salary that would be equal to their responsibilities. I know the news has always driven their point with dramatization but when did it stoop to the level of “reality” television?

  • You got to be kidding . ..

    David Goldstein deserves an Academy Award for substituting news reporting with slick editing. I wonder how much he expensed CBS for an undercover sting that nabs 3 old guys drinking wine from a bottle one guy brings from home. And it turns out these 3 guys are unpaid volunteers!!! And they may be heroes for once putting their lives before country or donating millions to the rest of us!!! Still – I really enjoyed those “Gotcha” segments. Let’s see – after looking at expenses totaling one million dollars – David is hot on the trail chasing down 3 strip steaks ($31 each), 1 lobster ($33), 6 bottles of wine ($55 each), 2 racks of lamb ($35) and 1 charge for bottled water. Let’s see – with tax and tip – that may add up to $600; which is like nothing out of a million bucks – right? Probably nothing to David as well, unless you have nothing else to report on. Kidding aside, when David didn’t find what he was looking for – i.e., corruption in the halls of government – he should have moved on. Instead, he snows CBS into devoting its air time to a story, which in the end is a greater waste of the public’s attention than filming 3 guys drinking their own wine.

  • Carol

    Bell was a scandal — these are a bunch of volunteers. This is a ridiculous use of local broadcast time.

  • Just wondering

    Two questions:

    Why should we pay for Blake’s corkage fee — it’s still a fee for wine?

    MWD has a high priced Ethics Officer — what does she think about this?

  • Just wondering


    What about the “tours of the MWD system” each director gets each year for “members of the public.

    Guessing they don’t eat takeout from Taco Bell on those things as well

  • Just wondering


    Where is the Legislature on this?

    MWD is a creation of the Legislature, and recreated the ethics officer.

    Why aren’t they all over these [guys]?

    • Not quite an insider

      Where is the Legislature?. You jest. Those are the most agregious offenders of them all. Have the hidden camera follow them around to the Sacramento watering holes after hours

  • Just wondering

    And, of courese, the fineal question

    If MWD isn’t watching these easy cost issues, what is it missing with the proposed HUGE costs associated with moving water through the delta a.k.a. BDCP?

  • Bob

    Very silly story. Most of these guys are volunteers. I don’t want an old man driving home at the end of a boring meeting on water. If the taxpayers don’t want to pay for wine, they should have their reps pass a bill. If it is not prohibited, I have no problem with it. This is a hit piece and not balanced at all.

  • Cherry

    I smell a rat. Reporter Goldstein says three directors went to dinner and drank wine, then he only names two and the camera work shields the third director. It seems like a set up by the mystery third director who was in collusion with the reporter. This isn’t a story—it’s a hit piece from director “X” that CBS and Goldstein fell for.

  • Joe

    I know a little bit about water systems. MWD has indeed raised rates. It has also repaired its pipes and kept a world class water system in top shape. This wine story is nonsense. I’m glad MWD does its job so that a main water pipe isn’t burstin every week.

  • Curious

    Is this really what is called journalism today? I wonder why this story even made the news. The Metropolitan Board Members are volunteers, and are only reimbursed for expenses. If this is all the hidden camera could find — it’s because there really isn’t much to report. A volunteer board member drinking his own wine with colleagues before a board meeting doesn’t seem like news. It just seems like a cheap shot from a news organization that should know better. This is just another reason it is hard to find qualified and talented people to serve the public.

  • waytoold

    Read some of these comments I used to listen to guys like this kiss the bosses ass to get favors,is there any men that worked in water that have any back bones??? There is people starving on the street,while these people live like this.If this doesn’t boil your blood then your just kissing up to your bosses.



    • Not quite an insider

      And how much is your cell phone bill? Your cable bill. Your ISP?

      Would you rather have water or your smart phone?

  • Dylan O.

    What everyone seems to forget is that the water that we waste watering our lawns and taking 20 minute showers doesn’t even come from our city. It has to travel over 400 miles to get to us. Without the MWD our city couldn’t survive. Hello? We live in a desert. And yet we continuously take it for granted. It’s pathetic that at the first opportunity we jump on the people who are responsible for maintaining the system we depend on – and over what? A pack of m&m’s at the hotel mini bar? Get real. These guys are volunteers – it’s a far cry from the fat cat Wall Street CEO’s that the news is trying to make them out to be.

    There are a lot of towns in this country that are drying up and dying out because they don’t have the money and resources to ship the water in. So as far as I’m concerned, I’ll support what ever keeps my toilet flushing.

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