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.

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