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The Lakewood water agency is withholding public documents related to an agreement that settled fraudulent overbilling
charges against former WRD attorney John Harris. Harris is suing the WRD to keep the document confidential.
By Brian Hews
An exclusive expose and public records request by Hews Media Group-Community News related to a settlement agreement between Los Angeles based attorney John W. Harris of Harris and Associates and the Water Replenishment District (WRD) has prompted a pitched legal battle between HMG-CN, Harris and the WRD, with Harris’ attempting to deny the Cerritos-based newspaper its lawful right, under the Freedom of Information Act, to view the settlement document.
The agreement was negotiated after an ex-employee of Harris produced documents that proved Harris fraudulently overbilled the WRD in 2014.
HMG-CN exclusively published that story Jan. 14 of this year.
Further, an additional public records request has revealed that WRD placed clauses in the Harris settlement agreement that directly violate relevant Government Codes concerning the California Public Records Act, (CPRA).
The original Jan. 18 HMG-CN request asked for the settlement agreement between Harris and the WRD.
The negotiation for the settlement agreement was between Harris, WRD President Sergio Calderon, and Directors Rob Katherman and Albert “Lil Al” Robles.
A subsequent letter received Jan. 29 from WRD attorney Francisco Leal of Leal-Trejo (Leal) indicated there were “documents responsive to HMG-CN’s request” and asked for more time to comply.
Eleven days later, in a letter dated Feb. 11, Leal denied the entire request. HMG-CN found out that word of the request was communicated illegally to Harris.
Leal said, “We have received correspondence from San Diego based attorney Nancee Schwartz representing Harris.
Ms. Schwartz is best known for running a “drug smuggler’s diversion program” in San Diego.
Schwartz threatened to enforce the confidentiality terms of the settlement document, “given that Mr. Harris and his counsel have the ability, pursuant to Marken v. Santa Monica–Malibu Unified School District to bring a “Reverse CPRA” action to seek an order preventing disclosure, the district will not be producing responsive records at this time in order to allow the court to make it’s determination in this matter.”
The threatening letter from Schwartz was received by Leal on Jan. 26, eight days after HMG-CN sent in the original request to WRD.
In the letter Schwartz stated, “Your attention is directed to section 3.9 providing that the agreement shall remain confidential and shall not be disclosed to any third-party whatsoever. This provision makes it exempt from the public records act.”
The letter went on, “Moreover, the party (Leal) receiving the records request for the agreement shall promptly notify the other party (John Harris) prior to any disclosure, and that such party shall not produce anything in response to the request for at least 10 business days following such notice…the WRD will take appropriate action to resist production as permitted by law.”
After reviewing the Schwartz letter, HMG-CN’s La Verne based attorney Kelly Aviles commented, “The Agreement contains a clause that it shall remain confidential and shall not be disclosed to any third party? The WRD is a public agency, that clause is a violation of the CPRA.”
Aviles went on, “A clause in the agreement that WRD shall take appropriate action to resist production as permitted by law? Another violation of the CPRA.”
Soon after HMG-CN received the refusal to the request, Aviles sued WRD on Feb. 16, serving the district with a “Summons and Verified Petition for Writ of Mandate for Violations of the California Public Records Act,” (Writ) to compel the WRD to produce the documents.
The Writ slammed the WRD for violating several Government Codes, in addition to the Codes violated in the settlement agreement, pertaining to the CPRA and for withholding the documents.
Government Code section 6253(d) states in part that, “a public agency cannot delay or obstruct the inspection or copying of public records.”
The Writ stated that, “WRD intentionally delayed it’s determination in order to give notice to Harris to file a reverse CPRA lawsuit to enjoin (stop) the production of records and thereby violated Government Code section 6253(d).”
The fact that Harris was warned was validated in the Schwartz letter where she said, “Mr. Harris, during a casual conversation, found out about the records request from a WRD Board member.”
Government code section 6253.3 states, “the state or local agency may not allow another party to control the disclosure of information that is otherwise subject to disclosure pursuant to the CPRA.”
The Writ stated that, “The WRD violated the code by allowing a third party to control the disclosure of the WRD’s public records.”
After writing a detailed letter outlining Harris’ objections to the disclosure of the settlement agreement, Schwartz then passed Harris’ defense to the Los Angeles based law firm of Ivie, McNeil, and Wyatt (Wyatt).
Wyatt promptly filed a Writ stating that the Harris settlement agreement is not public record due to the confidentiality clause contained in the document.
Wyatt argued, “Harris and WRD agreed to participate in a private mediation regarding the fee dispute, and dispute. Harris would not have agreed to the terms of the settlement, and may not have agreed to settlement at all, if there had not been assurances given and if agreement had not been reached by all parties that the terms of the settlement would be confidential and would not be disclosed to third parties by Harris or WRD. Harris relied upon the promises and assurances by WRD that the terms of the settlement would remain confidential in agreeing to the terms of the settlement and in performing the terms agreed to in the settlement.”
Aviles commented, “There is long-standing precedent that settlement agreements with public agencies are public record which must be disclosed upon request. Self-promoting agreements to the contrary are irrelevant because two parties cannot contract away the public’s right to obtain these important records. The fact that Harris wishes it to be otherwise does not trump the law.”
Calls into Harris and Schwartz went unreturned.
The legal battle stems from an article published in May 2015 by HMG-CN that exclusively reported the WRD paid nearly $10 million in legal fees since 2012. One of the biggest recipients, Harris & Associates and its principal owner, John W. Harris (Harris), billed the water agency over $2 million in less than 28 months.
HMG-CN obtained billing documents that showed during one timespan from 2013-14, Harris billed $1.177 million, averaging over $98,000 per month.
Inside sources told HMG-CN that Harris was “cut off” in late April 2014, subsequently engaged in dispute negotiations, and came under an “independent investigation” related to the massive legal fees.
Many in the water industry knew about the investigation at the time.
The dispute negotiations with Harris started in late 2014 when the WRD Board, led by President Sergio Calderon, Director Rob Katherman, and Director Albert “Lil Al” Robles, hired Los Angeles based Sheppard, Mullin, Richter & Hampton (Sheppard) as “independent counsel” to investigate the alleged overfilling by Harris.
No one at WRD questioned the fact that Sheppard was also involved with WRD on other water-related legal matters and that a true independent counsel was not hired.
But the apparent conflict of interest, even though questionable, would not be a factor in the investigation.
HMG-CN then exclusively obtained a document submitted by attorney Adam Kargman in April 2014 from a former WRD Board member outlining the Harris overbilling in great detail.
Most of the overbilling was related to the Cerritos v. WRD lawsuit, L.A. Superior Court case number BS128136.
The document was addressed to WRD Directors, General Manager Robb Whitaker, and WRD Chief Financial Officer Scot Ota.
Kargman did not mince words. The second paragraph of the letter stated, “I wish to advise you that on April 24, 2014, I first began to suspect – and later confirmed the next day, April 25 – that Harris & Associates has been engaged in improper and excessive billing of WRD for its legal services. ”
Kargman said that in April 2014 Harris asked him to review billings of the firm’s invoices to WRD and “it was then that I noticed discrepancies in his (Kargman’s) time entries and also excessive time entries for Mr. Harris. ”
As proof, Kargman stated, “I have retained all of my time entries since January 2014 and then compared my actual time entries to the time listed on the invoices sent in by Harris to WRD, there are numerous discrepancies. ”
Based on his review of time attributed solely to his work in January 2014, Kargman identified at least 51 fabricated entries and approximately 51.9 hours of padded time.
“At $275 per hour Harris improperly billed WRD for at least $14,000 worth of time attributed to me for the month of January 2014. ”
Harris Padding His Own Time
Kargman then indicated that he also believed that invoices to WRD included time entries that Harris did not actually perform.
At the time, Harris was paid $300 per hour.
“I drafted the majority of the documents. I would send my work to Mr. Harris for approval and he typically only gave minor comments. Often his response was simply ‘Approved. ’ Nonetheless the invoices indicated that Mr. Harris, who is frequently out of the office, billed as much or more time on the exact same tasks as I had performed in full. ”
Kargman cited two instances indicating “these are just a few of the many examples of improper billing I have uncovered. ”
On one invoice, Harris claimed he spent seven hours reviewing a document sent to him by Kargman.
Kargman said, “I sent the document to him at 10:41 a. m., Mr. Harris sent it back to me at 2:33 p. m. a time span of only four hours, yet Harris billed WRD seven hours. ”
Another invoice indicated Harris spent four hours reviewing a document sent to him by Kargman.
“I sent Harris the document at 5:17 and received the document back six minutes later at 5:23, yet Harris billed four hours. ”
A former WRD top employee familiar with John Harris’ work at WRD recalls it as “sloppy and a gross abuse of District funds.” “We were all aware that Harris was grossly over billing but at the same time aware that these guys were Albert Robles’ people, just like 80% of the agency’s vendors. We all witnessed the General Manager come unglued by the inept work product provided by Harris, but in front of Robles he praised the guy and acted like he didn’t have a care in the world. Quite frankly, it was humiliating to see how Albert Robles intimidated everybody on staff and those who didn’t bow to him were targeted for termination. About half the staff remains at WRD that were employed there only 5 years ago. Either they grow disgusted by the thievery of the John Harris’ of the world or they made the mistake of disagreeing with Albert Robles.”
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