Four months into into his reign as the ninth DWP General Manager in 10 years, Austin Beutner — despite working part-time and on a temporary basis — this week quietly carried out a major reorganization of the utility in part to focus on his goal of using its resources to create jobs and drive economic development.
He has dramatically restructured financial operations and made the key appointment of Kelli Bernard as director of economic development (DWP-changes.pdf) (DWP-financechanges.pdf).
She is a graduate of then Mayor Richard Riordan’s Business Team, a former vice president of Genesis LA now led by DWP Commission President Lee Alpert and most recently worked in a non-staff position as Council President Eric Garcetti’s planning and economic development director.
Whether those changes are for the common good likely will not be debated or examined by the City Council which is busy trying to protect itself from the wrath of the public enraged by endless rate hikes, failed and contradictory practices and long-time mismanagement of their most valuable and vital asset.
What Beutner has done nothing about are the villains who bear so much responsiblity for what is wrong at the DWP.
On Day One of his term at DWP, Beutner made peace with union bully Brian D’Arcy whose use abusive tactics and threats of strikes that amount to nothing but blackmail have won him a long series of spectacularly lucrative contracts.
“People have made labor the issue
and I don’t think it’s the top issue facing the agency,” Beutner said back in April, making it clear that peace at any price would be his policy no matter what the “people” think.
The price of that peace was to leave Raman Raj, D’Aarcy’s lackey, in place running the day-to-day operations as chief operating officer, the No.2 position that is more important than ever because most of Beutner’s time is spent on his duties as First Deputy Mayor and jobs czar.
D’Arcy and Raj — what a team to rely on!
Nothing good has ever come, can ever come, with those two in power. Reforms being pushed by the Council like the Rate Payer Advocate, changing the composition of the Board of Commissioners and requiring a timely and public budget are meaningless as long as the people in charge have utterly no respect for the public or the public interest.
D’Arcy’s outrageous excesses and destructive behavior were well documented in a “for your eyes only” report to then Mayor James Hahn by DWP Assistant General Manager Mahmud Chaudhry which eventually leaked to the LA Weekly in 2005.
Chaudhry exposed how D”Arcy controls the management, threatens their careers as well as those of city politicians and warns he will turn off the city’s water and power if he doesn’t get what he wants.
“The DWP has become a fox-run henhouse of epic proportion,” Chaudhry
wriote. “The union now runs the department. They blur the line between .
. . bargaining and criminal extortion.
“By choosing union peace at any price, DWP leadership finds itself
paying an exorbitant price. Anxious
to avoid conflict, management finally relinquished the duty — and with
it the power — to exert control. With no one minding the store, it may
be a matter of time before the union’s extreme bargaining advantage
begins to impact the annual [revenue] transfer to the city.”
A few months after his report surfaced, Mayor and Antonio Villaraigosa and the Council approved the richest contract in city history with raises of up to 6 percent a year to IBEW Local 18 workers whose salaries already were 30 to 40 percent higher than other city workers in the same jobs or those of private utility workers.
It wasn’t long before Villaraigosa brought Raj back to the DWP and foisted him as chief operating officer on David Nahai when he took over as General Manager. He did this in the full knowledge that Raj’s previous short stint at the DWP under David Freeman ended disastrously with lawsuits and his dismissal in 2001.
To say the least, there is nothing in Raj’s career that suggests he is at all qualified for such a high position — except for his slavish loyalty to D’Arcy.
Let’s start with Raj’s personal financial management.
On Feb. 24, 1992, Raj and his wife Mrinalini, then living in Laguna Niguel, filed for Chapter 7 Bankruptcy in the Central
District of California,
That was done just six days after a judgment of $2,275.31 was entered against him for breach of
contract in the North Pomona Courthouse in a case filed by Wells Fargo Bank.
Five years later, on Feb. 20, 1997, Raj encountered another financial problem. The IRS filed a tax lien against him for $16,503. It took him until 2000 when he was working for the DWP to be released from the lien.
Then, there’s his rather undistinguished career as a business executive, bouncing from job to job without making the kind of noteworthy successes that ought to be necessary to be the man running the DWP.
He worked as a mid-level executive at Kaiser Permanente, Flying Tigers and the Southland
Corp. before a stint as managing director
at the Metropolitan Transportation Authority where he was anything but a success. His main task involved labor negotiations and he reportedly was forced to resign after running afoul of upper management.
He did get to connect with labor leaders and ultra-liberals like Councilwoman Jackie Goldberg who helped him land a job at the DWP in 1999 as chief administration officer overseeing labor relations and human
resources where he cemented his relationship with D’Arcy and eventually became a supporter of Villaraigosa’s in his first mayoral campaign in 2001.
In his job, Raj quickly became embroiled in one of the darkest chapters in DWP history, a long pattern of discriminatory treatment of minorities and women.
The LA Weekly’s Jeffrey Anderson wrote a devastating story in 2005 tracing the long sordid history of discrimination and millions of dollars in secret settlements with employees.
Some of the incidents involved misconduct by Raj and led to a 2003 lawsuit
LA Superior Court Case Number BC
290779: Brenda Barr, et al v. City of
Los Angeles and DWP and Raman Raj, et al.
The heart of the allegation was that the working environment at DWP was permeated with
discriminatory animus” against women and blacks, specifically that “the individual Defendants schemed to
and did create a system which resulted in promotions and pay upgrades to men,
while preventing women from advancing.”
In 2008 when Raj was brought as COO, far higher than any position he had ever held before, the LA Times reported the Barr cass was settled for $3.3 million
The
article cited a report by DWP’s outside consultant,the
law firm of Kemp Smith, that concluded Raj moved the utility’s
anti-discrimination office from a satellite building — valued for providing a
level of anonymity — into DWP headquarters to discourage complaints, since
anyone who entered would have to do so in public view.
The report said Raj
manipulated severance packages to remove managers who disagreed with him. And
it warned that Raj had given “too much influence in management of the
organization” to D’Arcy and shielded
union employees from disciplinary action
Recommending he should be let go for the good of the agency, it said Raj could not
be trusted to “act in the department’s interests when they may conflict
with his own agenda.”
Today,
managerial insiders still don’t trust Raj, regarding him as devious and
duplicitous.
In part, the shadow hanging over Raj derives from what he did for a living between stints at the DWP.
He formed a consultant company,
Resources Roundtable, and used his access to DWP
officials to help win contracts for energy-related companies like Itron, Smartsynch and Enspiria that had won nearly $60 million in DWP contracts without the Board of Commissioners knowing of the connection to Raj.
Every decision, every contract that Raj is involved in sparks suspicion about insider dealing, about the inordinate influence of D’Arcy yet Beutner relies on him to run the DWP and talks admiringly of the knowledge and intelligence of the union boss.
How can anyone wonder why it has proven impossible for years to hire a capable and experienced general manager, why rates keep going up and up, why the water and power systems are deteriorating, why the DWP has lost all credibility with its customers, why it is the center of endless controversy.
What is impossible to understand is how Austin Beutner and the mayor can possibly think the DWP is going to be the engine of development and job creation that restores the city’s economy.
Structural reforms and political spin are useless unless there is a massive shakeup in the management of the DWP and the city’s elected officials find the courage to put D’Arcy in his place.
Crooks, liars and puppets have been placed in powerful positions throughout the Villaraigosa administration. Where are the good unexciting Hahn days?
Beutner is good at making political, not competent appointments. The people he is appointing have no competency or skills for those positions.
You got it right, 9:25 AM! Nobody could stand poor Jim Hahn. He was boring (correct). He was corrupt (false). He didn’t like secession nor did he like Bernie Parks. But he’d been around for a while, knew how the city worked and — most importantly! — wasn’t in it for his own personal aggrandizement. Shit, his staff had to beg him to talk to reporters. But we were idiots, seduced by a good looking guy with an interesting story who promised us the world. The media loved him. After all, Hahn was boring. Who cared if all the empty promises — the million trees, the improved schools, the subway to the sea — were patently absurd. He was going to “roll up his sleeves” and show us how. This horse had legs.
All of us have no one to blame but ourselves. We allowed ourselves to be seduced by a smooth talker with a big smile. He screwed over Corina. He screwed over us. Maybe next time we’ll be smarter.
Thanks Ron for the article.
If IBEW Local 18 negotiated a pay raise with Council and Villaraigosa for up to 6% raises, is this not what Union are susposed to do?
Didn’t these same members put on the table money in the form of paying for benefits they get? In my opinion I think they should contribute more towards Health and Retirment; but thats neither here nor there.
If D’Arcy or anyone within DWP would ever do one thing to sabotage the normal flow of utities the Media and Public, the Mayor and City Council would render them powerless.
If Unions got what they wanted because the Mayor and City Council approved pay raises or outlandish benefits, at a time when the finances show they lost money in the Pension Investments and the Unfunded Pension debt is untenable; the weak negotiators are the Mayor and City Council.
The answer is always the same; Politics and political contributions.
I agree, massive shakeup is needed over at DWP and courage is needed to stand up for what is fair and right for the short and long term benfit of the City.
Prez Councilmember Eric Garcetti sucker punched the public. First, he went before the Commission under the pretense of fighting or asking LADWP’s Board of Commissioners to pay the balance of the Power Transfer of 87.5 million owed the City.
After Garcetti and Perry left the room, the Board asked Raman Raj if it was financiall conducive to make the tranfer. Raman Raj said, no.
A few weeks later while DWP was holding an emergency meeting, Eric Garcetti spoke up and said under Rule X, called for the Vote and the public received a utilty rate increase. At that hearing Wayne Spinder said, LA City Council was pulling a fast one behind the back of the public.
Eric Garcetti knew the Controller was in the process of Auditing DWP. The audit revealed DWP had plenty of CASH. In fact, they have a Billion Dollars. 500 Million was in one account that was not Touched in years.
Why didn’t Eric Garcetti wait until the Controller finished DWP’s Audit?
I don’t want to “just say” these people are corrupt, its time to prove it.
DWP pays much more to their lower skilled employees than do the private utilities. This is because the private utilities (SCE, PG&E, etc.) pay more for the skilled workers (engineers, cable splicers, linemen) than DWP and the lower skilled workers got the same raises needed to retain the higher skilled employees. That is the benefit of a labor union — they can bring the lower skilled people a living wage.
When DWP had 3 staff reduction programs in the late 1990′s, over 2,000 workers left. All of them except retirees got other jobs at HIGHER wages with other utilities because of their expertise.
“The heart of the allegation was that the working environment at DWP was permeated with discriminatory animus” against women and blacks, specifically that “the individual Defendants schemed to and did create a system which resulted in promotions and pay upgrades to men, while preventing women from advancing.”
This is a problem endemic in each and every city department, and not unique to DWP.
“DWP pays much more to their lower skilled employees than do the private utilities. This is because the private utilities (SCE, PG&E, etc.) pay more for the skilled workers (engineers, cable splicers, linemen) than DWP and the lower skilled workers got the same raises needed to retain the higher skilled employees.”
Ron doesn’t bother to make the distinction between skilled and unskilled. He thinks everyone at DWP is overpaid but has never bothered to research the average salaries in the utilities industry. He also thinks a load dispatcher is a clerical job.
Keith Brackpool , owner of many racehorses, is again involved in a controversy in Sacramento, as Chair of the Racing Board.
Be it D’Arcy or someone else, what the “leaders” should do is have subs ready to call if a strike ensues. Then, these “leaders” should call D’Arcy’s bluff.
Even if Raj & Darcy are gone, will the Council and Mayor suddenly gain religion and stop taking IBEW money? The real villains are the politicians who will continue to wreck DWP.
The Department of Water & Power have plans, in place, to maintain operations in the event of a strike, for both power and water. The real problems lie in the possibility of Sabotage. I’m sure that through out both systems there are a couple key-note locations/situations, that “if” just the right thing happens. BOOM ! Major major outages.
Let’s not forget 2005 in the week just before the City Council was to vote on a new IBEW contract, when there had been discussion that maybe the new contract was too generous . . . BOOM ! The Westside has a power outage. And guess what (!) on the new contract in City Council . . . . 15 Ayes !
david r2b, regulations for preventing sabotage have been mandated by the Federal Government. Go look up NERC Critical Infrastructure Protection. You’re thinking that an operator would actually be stupid enough to mess with the grid for political purposes. In reality, even if an operator messed up on accident, the utility will get massive fines. Go look up how much Florida Power and Light was fined for their 2008 blackout
The voters of Los Angeles reap what they sow. After all, a majority of them are the ones who love the idea that being pro-union, pro-labor, pro-liberal, pro-Democrat-Party — no matter what — is a beautiful and heartfelt thing to behold.
To those yearning for the days of Jim Hahn –unassuming as he may have been, we have to remember that it was Mayor Hahn who brought in the nightmare named Mercedes Marquez (former GM of LA Housing Department), who appears to still wield her corrupt power over that department and the City.
It is Villaraigosa who hired Mercedes Marquez.
Get your facts straight. Villaraigosa became Mayor in 2005. Marquez was hired as GM of Housing in January 2004.
HEY ALL YOU COMPLAINERS…….. IF ALL OF YOU GUYS WERE WORKING FOR LADWP YOU WOULD NOT BE CRYING. DONT HATE BECAUSE WE HAVE GOOD JOBS !!!!!!!!!!!
DONT HATE BECAUSE WE HAVE GOOD JOBS.