Former Head of LADWP Sentenced to Six Years in Federal Prison

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FILE PHOTO: Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

          LOS ANGELES – The former general manager of the Los Angeles Department of Water and Power (LADWP) was sentenced today to 72 months in federal prison for accepting bribes from a lawyer in exchange for his official action to secure a three-year, $30 million no-bid LADWP contract for the lawyer’s company.

          David H. Wright, 62, of Riverside, was sentenced by United States District Judge Stanley Blumenfeld Jr., who described Wright’s conduct as “egregious” because Wright – while a public servant – executed an “elaborate and sophisticated criminal scheme” that was motivated by “pure greed.”

          Wright, who is the first defendant to be sentenced in the LADWP corruption cases, pleaded guilty on January 25 to one count of bribery.

          Wright served as LADWP’s general manager from September 2016 until July 2019, when he resigned at the direction of the mayor of Los Angeles.

          “As the leader of the nation’s largest municipal utility, David Wright embarked on a campaign of corruption, including pushing through a no-bid $30 million contract for a company from which he had secretly accepted a lucrative job offer,” said United States Attorney Tracy L. Wilkison. “This ongoing criminal case has placed a spotlight on public corruption that harmed ratepayers while benefiting dishonest officials and unscrupulous lawyers.”

          “This case is especially significant given the corruption that was rooted in the highest level of city government,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This investigation highlighted the lack of oversight for a $30 million contract and the inexcusable silencing of whistleblowers, amounting to a gross misuse of Mr. Wright’s position and a violation of the public’s trust. The FBI encourages those with information about corruption to speak up and hold accountable public officials whose conduct erodes trust in government.”

          During 2016 and 2017, Wright developed a relationship with Paul O. Paradis, 58, of Scottsdale, Arizona, a lawyer appointed by the Los Angeles City Attorney’s Office to represent LADWP in a lawsuit in which the department blamed the vendor of its billing system for the misbilling of hundreds of thousands of ratepayers. Paradis and his New York-based law firm also held a $6 million LADWP contract to provide project management services in connection with the department’s remediation of the faulty billing system.

          By early 2017, Wright and Paradis agreed that – in exchange for Wright’s support of a “no-bid” $30 million contract for Paradis’s downtown Los Angeles-based company Aventador Utility Services LLC — Paradis would give Wright a $1 million-per-year job as Aventador’s CEO and a luxury company car once Wright retired from LADWP.

          In exchange, Wright lobbied members of the LADWP board of directors to vote in favor of the contract for Aventador, whose company name was taken from a model of Lamborghini sports car. At the time it approved the $30 million no-bid contract in June 2017, the LADWP board was not informed of Wright’s illegal agreement with Paradis to take a lucrative job as Aventador’s CEO upon retiring from LADWP.

          After the awarding of the contract, through early 2019, Wright continued to collaborate with Paradis to build and market Aventador and to seek additional lucrative business opportunities for it — and thus for Wright and Paradis — both inside and outside LADWP. Despite being a public official, Wright used his position as LADWP’s general manager to advertise Aventador’s services at industry events and in meetings and discussions with other industry officials and executives.

          By March 2019, Paradis had been forced to resign from his role as special counsel to the City Attorney’s Office. Around this time, the LADWP board voted to terminate Aventador’s contract, but it agreed to retain the company’s services if Paradis sold his stake in the company and disavowed any interest in the company, which Paradis purported to do. In late March 2019, after Paradis sold the company to an employee, Aventador officially changed its name to Ardent Cyber Solutions LLC.

          In late March 2019, after Paradis had begun covertly cooperating with the FBI, Wright met with Paradis at Wright’s home and directed Paradis to destroy their incriminating text messages and emails from Wright’s cell phone and Apple iCloud account and to take back an Aventador laptop and wipe it clean. Wright told Paradis that he had already gone through his office at LADWP and destroyed all incriminating physical evidence.

          In April 2019, Wright used his position to urge the LADWP board to support a new cybersecurity contract to Ardent for more than $10 million. Wright again did not inform the board of another secret arrangement with Paradis, which by then included their agreement that Wright would receive a “substantial sign-on bonus” of $600,000 or $1.2 million, as well as an increase in his ownership of their company, in addition to a previously agreed-to $1 million annual salary and luxury car.

          Paradis pleaded guilty on January 28 to a federal bribery charge for accepting an illicit kickback of nearly $2.2 million for getting another attorney to purportedly represent his ratepayer client in a collusive lawsuit against LADWP related to the billing debacle. Paradis is cooperating with the ongoing investigation into the collusive litigation and corruption at LADWP. Paradis is scheduled to be sentenced on July 19.

          David F. Alexander, 54, of Arcadia, LADWP’s former chief information security officer and its former chief cyber risk officer, pleaded guilty on February 8 to one felony count of making false statements to federal investigators probing corruption in the department. Alexander’s sentencing hearing is scheduled for June 7.

          Thomas H. Peters, 56, of Pacific Palisades, the former chief of the Civil Litigation Branch of the Los Angeles City Attorney’s Office, pleaded guilty on April 5 to one count of aiding and abetting extortion. Peters threatened to fire a plaintiffs’ attorney from a lucrative special counsel job with the city unless the attorney paid a substantial extortion demand from a former employee who was threatening to expose the city’s collusive litigation over its faulty water-and-power billing system. Peters, who is also cooperating with the ongoing investigation, is scheduled to be sentenced on August 2.

          The FBI is investigating this matter. Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s email tip line at pctips-losangeles@fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.

          Assistant United States Attorneys Melissa Mills, Jamari Buxton, and Susan Har of the Public Corruption and Civil Rights Section prosecuted this case.