Central Basin Loses First Round of $8-Million Wrongful Termination Suit

CBMWD loses appeal of former GM Perez claim for unemployment benefits.

By Brian Hews

In reviewing the February 23^rd 2015 Central Basin Municipal Water District (CBMWD) Board meeting minutes, Hews Media Group-Community News has discovered that a decision has been handed down from the California Employee Development Department mandating CBMWD pay former General Manager Tony Perez’ unemployment benefits.

Sources told HMG-CN that documents from the law firm of Tafoya and Garcia’s questionable pre-lawsuit investigation of Perez, an investigation that has cost CBMWD over $120,000 and approved by President Bob Apodaca and Director’s Leticia Vasquez and James Roybal, with Directors Phil Hawkins and Art Chacon voting no, were used in the hearing without success.

It is a big blow to CBMWD’s defense against Perez and his $8 million lawsuit.

The CBMWD Board subsequently voted 3-2, with Director’s Leticia Vasquez and James Roybal dissenting, to abandon another appeal based on the court decision.

Perez was the CBMWD General Manager fired for cause on October 9^th 2014 by a 3-2 vote, with Directors Phil Hawkins and Arturo “Art” Chacon dissenting.

It was first reported in February 2015 by HMG-CN that Perez filed an $8-million wrongful termination claim against CBMWD and directors Apodaca, Roybal and Vasquez.

HMG-CN learned after his termination on October 9^th 2014, Perez filed for unemployment benefits in accordance with state law. CBMWD appealed Perez’s claim for benefits.

According to labor experts, the Unemployment Insurance Code states that a person can be disqualified for benefits only if they were discharged for misconduct.

The court’s decision to reject CBMWD’s appeal raises serious doubts whether CBMWD had just cause to terminate Perez.

At the same February 23^rd Board meeting, the CBMWD Board also voted 5-0 to notify the insurance carrier of Perez’s claim, but to not tender the claim at this time.

When asked why CBMWD would choose not to tender an $8-million claim to its insurance carrier, a person close to CBMWD who wished not to be identified said, “CBMWD’s insurance limit is only $2-million. Perez’s suit is far in excess of that limit. If the claim is tendered, CBMWD will almost certainly be cancelled and uninsurable, since this would be the second time they would be cancelled for Board dysfunction in less than a year. If CBMWD loses its insurance again, it will probably result in a drop in credit rating, which would make it very expensive or impossible to secure the financing necessary to operate.”

 On March 4^th 2015, HMG-CN was first to report that the state legislature ordered a financial audit of CBMWD prompted by a request by the Los Angeles County Board of Supervisors.

County Supervisor Don Knabe spearheaded the effort to pass the County Resolution requesting the state audit, indicating that the resolution was written “…after we started hearing of potential action to fire Tony Perez,” and that Perez Is, “…the closest thing to a professional for the entire organization.”

Knabe later praised the legislature’s action commenting, “years of mismanagement and dysfunction have threatened the agency’s ability to fulfill their capacity as a water distributor to the region. The two million residents, 24 cities, and numerous unincorporated communities that depend on the Central Basin Municipal Water District for their water needs deserve an agency that operates in the public’s trust, transparently and effectively.”

Community activist Scott Collins commented, “everyone who understands how CBMWD works knows that Perez was fired for going head-to-head with Pacifica Services Inc. (PSI) President Ernie Camacho. Perez had reduced costs, settled litigation, balanced the budget, and restored CBMWD credit rating; but refused to allow PSI to continue getting paid without board approved funding. Camacho has told a number of people he intended to get Perez fired, and he did.”

This paper has reported numerous times on PSI, and Camacho’s relationship with certain CBMWD Board members, namely, Apodaca, Vasquez, and Roybal.

PSI was brought into CBMWD in 2006 by former consultant Tom Calderon, who was brought in by CBMWD President Bob Apodaca, and who is currently awaiting trial on federal charges of money-laundering and bribery.

HMG-CN was first to report that PSI received seven no-bid contracts over the next 7-years, reaping approximately $6-million from CBMWD. Under Perez’s direction, CBMWD terminated PSI’s contract in June 2013 and then sued PSI for fraudulently billing over $800,000 above CBMWD Board authority. The suit settled in June 2014 with an $875,000 payment to PSI.

Collins continued, “Perez recognized that PSI was defrauding CBMWD of millions which led to the initial lawsuit. I don’t know how someone got CBMWD to drop the fraud claim from the suit but it’s pretty obvious that someone bought three votes because the fraud charge was dropped and then the suit settled for $875,000. If it’s not fraud to get paid for playing golf and emailing racist jokes, then I don’t know what is. I have half a mind to file a qui tam lawsuit against PSI myself on behalf of CBMWD to get those millions back.”

This paper was first to report in February 2014 that PSI employees would regularly charge CBMWD for time spent entertaining CBMWD GM Art Aguilar while at the golf course. Additionally, in March 2014, this paper was first to report that PSI Vice-President Mike Sisson and other PSI employees exchanged thousands of racist and sexually lewd jokes via email while on CBMWD time. Sisson even took a picture and sent an email out of former assistant GM Ron Bielke being taken out on a stretcher after suffering a serious workplace accident.

Under the picture in the email, Sisson typed the word KARMA.

This paper reported in January of this year that former CBMWD director Ed Vasquez and former general manager Art Aguilar were each fined in excess of $30,000 by the Fair Political Practices Commission for failure to report gifts received from PSI.

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