Attorneys under investigation by State Bar in DWP billing scandal

For more than a year, the State Bar of California has been conducting one of the largest investigations in its history into the conduct of attorneys handling lawsuits related to the Los Angeles Department of Water and Power's 2013 billing meltdown.

The results of that probe may soon come to light.

Bar investigators Charles Calix and Abrahim Bagheri appeared Tuesday at a federal court hearing in downtown L.A. and provided an update on the investigation. Calix told U.S. District Judge Stanley Blumenfeld Jr. that "public proceedings" toward some individuals could come in a couple of months.

Calix suggested that the investigation is unparalleled in the bar's history. Another attorney, whose client is aiding the investigation, told Blumenfeld at Tuesday's hearing that 18 attorneys are under investigation.

Investigators are looking into how the city attorney's office handled lawsuits stemming from a faulty DWP billing system that launched in 2013.

Read more: Another legacy for Tom Girardi: Tighter regulation of California lawyers

Facing an onslaught of lawsuits over billing errors, attorneys working for the city colluded with opposing counsel to quickly settle a class-action lawsuit brought by DWP customers.

That collusive lawsuit was internally known in the city attorney's office as the "white knight" suit because it was crafted to "quickly settle a slew of costly, embarrassing, and politically damaging lawsuits on terms the City wanted," prosecutors with the U.S. attorney's office wrote in court documents this month.

The criminal probe led by the U.S. attorney's office has produced two guilty pleas from attorneys who worked for former City Atty. Mike Feuer.

Prosecutors, in court filings, have referenced other "top city attorney’s office personnel" who directed the legal scheme but haven't brought additional charges.

Thom Mrozek, spokesman for the U.S. attorney's office, would not comment Friday when asked about the lack of charges.

A 2021 court-ordered report on the actions of the attorneys concluded that several “violated the ethical rules against dishonesty, deceit, and collusion and violated their ethical duties to the court in violation of Rules of Professional Conduct.”

At Tuesday's hearing, Calix told Blumenfeld that some attorneys being investigated by the State Bar of California are invoking their 5th Amendment right against self-incrimination, in an apparent effort to allow the statute of limitations on potential charges to expire.

Those helping the bar with the investigation include Paul Paradis, an attorney who had worked for Feuer's office. Paradis has pleaded guilty to one count of bribery in the federal probe of the legal scheme.

Paradis was scheduled to be sentenced Tuesday, but Blumenfeld delayed the sentencing until September so Paradis could continue to aid bar investigators.

David Scheper, Paradis’ attorney, told the judge that his client had helped prosecutors in both the criminal probe and the state inquiry "root out corruption going to the highest places."

He also said 18 attorneys are being investigated by the bar. A spokesperson for the State Bar of California declined to comment on how many attorneys are under scrutiny.

Read more: Attorney awaiting sentencing in DWP case accuses Feuer of aiding extortion, perjury

Paradis has previously accused Feuer of knowing about wrongdoing in the case and has accused the former city attorney of perjuring himself during a 2019 deposition. Feuer denies the allegations.

In August 2022, the U.S. attorney’s office wrote to Feuer’s attorney noting that it didn’t have an active investigation into Feuer related to the DWP billing scandal.

This month, Paradis took aim at another erstwhile high-ranking official in Feuer's office: former Chief Deputy Atty. Jim Clark. In a letter to Blumenfeld, Paradis wrote that Clark asked him and others to implement the "collusive litigation scheme."

Marisol Mork, an attorney for Clark, told The Times that Paradis' letter is "nothing more than a last-ditch effort by a criminal defendant to persuade the court to reduce his incarceration by shifting the blame to others for the egregious conduct detailed by the U.S. attorney’s office."

Paul Kiesel, another attorney who worked for the city attorney's office on DWP billing litigation, told The Times on Monday that he was present at a meeting when Clark instructed Paradis to draft the lawsuit that would be known as the "white knight" complaint.

Mork didn't immediately respond to a request for comment about Kiesel's statement.

Clark has not been charged in the case.

Feuer, who is running for Congress, has confirmed that he is under investigation by the State Bar of California but maintains that he has done nothing wrong. Reached Tuesday, Feuer said he "cooperated fully and am completely confident there is no issue with respect to me."

Feuer declined to comment Tuesday when asked about the comments about Clark by Kiesel and Paradis.

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This story originally appeared in Los Angeles Times.