LA Special Counselor To Plead Guilty To $2.2M LADWP Kickback Scheme, Bribing LADWP Officials

LOS ANGELES (CBSLA) – A lawyer who represented the city of Los Angeles in a lawsuit over the L.A. Department of Water and Power billing system has agreed to plead guilty to federal charges for receiving $2.2 million in a kickback scheme in which he also bribed multiple LADWP officials.

Paul Paradis is expected to plead guilty to a single federal count of bribery, the U.S. Attorney's Office announced Monday.

The case is believed to be the first criminal charge to arise out of a federal investigation into the city's handling of the flawed LADWP system and resulting litigation. The failed system led to many customers receiving wildly inflated bills.

Federal prosecutors Monday said Paradis has agreed to plead guilty to simultaneously representing LADWP and a ratepayer who was suing the city over the billing system. Prosecutors said Paradis received a $2.2 million kickback from another attorney stemming from the arrangement.

As part of his plea agreement, Paradis, 58, of Scottsdale, Arizona, admitted to additional bribery schemes involving high-level DWP officials. The defendant is cooperating with the federal criminal investigation, which is ongoing, prosecutors noted.

An LADWP representative did not immediately respond to a request for comment.

According to court documents, after the faulty billing system went into use, the city and utility faced multiple class-action lawsuits filed by ratepayers alleging harm resulting from the program.

In December 2014, the City Attorney's Office retained Paradis and Beverly Hills lawyer Paul R. Kiesel as special counsel to represent the city in a lawsuit meant to be used to settle all related claims on the city's desired terms, according to federal prosecutors.

Kiesel is cooperating with the investigation and is not charged with any wrongdoing.

Prosecutors contend that when Paradis began representing the city as special counsel in the litigation against PricewaterhouseCoopers over the company's handling of the LADWP billing system rollout, city prosecutors were aware that he was already representing Antwon Jones, a ratepayer who had a claim against the utility arising from billing overcharges.

Jones was unaware that his lawyer, Paradis, also represented his intended adversary, according to court filings.

At a February 2015 meeting with at least one unnamed senior member of the City Attorney's Office, Paradis and Kiesel were authorized and directed to find counsel that would be friendly to the city to supposedly represent Jones, federal prosecutors allege.

City Attorney Mike Feuer said he was "beyond outraged" at the allegations.

"I am beyond outraged that anyone would breach their duties to the public we serve, as this plea agreement reflects," he said in a statement.

After the meeting, Paradis recruited a lawyer identified in court documents as "Ohio Attorney" to supposedly represent Jones in a lawsuit against the city. Paradis told the Ohio lawyer that the city wanted the lawsuit to be "pre-settled" on the city's desired terms, and that Paradis would do all or most of the Ohio attorney's substantive work on the case, according to prosecutors.

In exchange, Paradis and the outside lawyer agreed that Paradis would receive 20% of the Ohio lawyer's fees in the Jones v. City case as a secret kickback, prosecutors allege.

As part of his plea deal, Paradis also admitted to giving bribes to multiple LADWP officials, including a DWP general manager and an DWP Board member, in exchange for their help in securing a three-year, $30 million no-bid contract with the utility in June 2017 for Paradis' downtown Los Angeles-based cyber-services company, Aventador Utility Solutions.

Paradis is expected to make his initial federal court appearance in downtown Los Angeles in the coming weeks.

(© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)