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Was Asm. Cristina Garcia’s Water Bill a Scheme to Bankrupt Central Basin?

BY BRIAN HEWS • [email protected]

Back in 2016, current California Assemblywoman Cristina Garcia proposed AB 1794, “to increase accountability in a climate of poor leadership and ethics by creating a new governance structure for the Central Basin Municipal Water District.”

AB 1794 added three unelected appointees to the CB Board of five elected members, the appointees nominated by local water purveyors and chosen by the Central Basin GM, who is currently Kevin Hunt.

The bill mandated the removal of an elected seat in 2022 while keeping an appointed seat, causing many to warn of a possible Voting Rights Act violations.

Unknown at the time but revealed later in a series of jaw-dropping articles, Garcia, a champion of the #Metoo movement, was in her own climate of extremely poor leadership and questionable ethics that would see the Assemblywoman accused of crotch grabbing male friends in public, drinking and having sex in her office, throwing out racist and homophobic slurs at Assembly leaders, targeting her colleagues, and harassing staffers.

Garcia stated on her website that, “the strategies implemented in AB 1794 will protect consumers [with the appointees] providing oversight and accountability for Central Basin rate payers.”

But the bill did not specify who the appointees would be accountable to; it turns out they were accountable to no one.

Consequently, the bill has had the direct opposite effect, with Garcia standing on the sidelines watching the appointees – and CB GM Kevin Hunt – deliberately violate the charters within AB 1794.

The appointees, who are nominated by water purveyors competing with CB, banded together to form a majority with President Bob Apodaca, who cost CB over $800,000 in a sexual harassment lawsuit. 

The appointees, along with Hunt, are abusing AB 1794 while making moves to systematically force CB into bankruptcy.

Since the bill’s passage, they have routinely participated in votes and negotiations that are blatant conflicts of interest involving their own companies, breaching their fiduciary duty to CB, secretly selling off assets without CB Board approval, triggering costly lawsuits, while simultaneously creating major financial problems for the very agency they were appointed to serve.

Garcia Wanted Payback     

In 2014, Jason Stinnette ran  as a candidate against Art Chacon, current CB Division III Director. Garcia strongly endorsed Stinnette, as did former State Senator and current State Insurance Commissioner Ricardo Lara, who himself authored a bill similar to Garcia’s.

The two continued to endorse Stinnette  despite his past criminal record, exclusively reported by HMG-LCCN in 2014, that included a DUI and reckless driving.

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The revelations by HMG-LCCN derailed Stinette’s campaign and he eventually lost, with sources telling HMG-LCCN at the time that “Stinnette was Garcia’s heir apparent, she [Garcia] was livid that Chacon won and wanted to exact some kind of political payback.”

Garcia waited until 2015,  then began her scheme to exact revenge on Chacon and CB.

Hire Puppet General Manager

The first part of the scheme was to hire GM Kevin Hunt, whom CB President Bob Apodaca overwhelmingly endorsed calling him “the most qualified general manager he’s seen in his 16 years on the board.”

Hunt had a checkered past, ignored by Apodaca, that included a 2006 civil complaint where Hunt was  accused of scheming with convicted felon Albert T. (“Big Al”) Robles. 

The suit alleged that Robles illegally altered contracts so Hunt’s company, Psomas Engineering, could win a lucrative $2.3 million project from the city of South Gate, while hunt received huge kickbacks.

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Since his hiring, Hunt has been directly involved in costing the agency hundreds of thousands of dollars; currently, CB is litigating three lawsuits, Hunt is responsible or has a hand in all three lawsuits.

In addition, a recent exclusive exposé by HMG-LCCN recently caught Hunt working for his own company Thorton Resource, while taking his salary from CB.

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And CB board members will attest that Hunt has told them, “Cristina Garcia put me in charge.”

Hire Complicit Law Firm

The next step was to hire Nossaman, LLP as the agency’s law and lobbying firm.

The connection to Garcia was evident: Nossaman donated money to Garcia’s campaign and would later become the liason in an investigation between Speaker Anthony Rendon, the Assembly, and Daniel Fierro, who sued Garcia for drunkenly groping his crotch in public.

During the hiring process, Apodaca pushed hard for Nossaman, saying they were “the firm recommended by GM Kevin Hunt.”

Chacon and Director Phil Hawkins strongly objected to the hiring of Nossaman because of the firm’s connection to the Calderon family.

Chacon later complained about the process to select Nossaman, stating Hunt and Apodaca interfered to ensure the firm was chosen.

“The board wasn’t supposed to be involved until the very end of the selection process, but that didn’t happen,” Chacon said. “Hunt and Apodaca were talking to Nossaman the whole time,  they fixed it so Nossaman would get hired.” 

Lie to Board Members, Pass AB 1794

Not long after Nossaman’s hiring, Garcia’s AB 1794 began winding its way through the Assembly.

As the bill came closer to a vote in the legislature, Hunt and Nossaman “Consultant” Jose Solorio, both well-aware most of the CB board members were against the bill,  were saying “don’t worry, the bill is not going to pass.” 

CB Director Phil Hawkins said, “they told us several times, ‘hey don’t worry it won’t pass,’ turns out they were lying .” 

Consequently none of the CB board members put in any effort to stop the bill from passing. 

At the time, CB Directors Chacon, Hawkins, and Leticia Vasquez had learned that Nossaman was lobbying both for and against the bill and accused Hunt and Solario of lying to cover-up the conflict, but, with Apodaca controlling the presidency, the allegations fell on deaf ears.

With the battle to pass AB 1794 now being waged on two fronts – Garcia fighting in Sacramento while Hunt and Solario lied to the CB Board – the deck was stacked in favor of passage, and the bill was signed into law in late 2016.

But the allegations of the lies and cover-up would eventually prove to be true.

Just recently, HMG-LCCN, in an exclusive report, found hard evidence that Nossaman was lobbying to pass AB 1794, proving Chacon, Hawkins and Vasquez’ accusations were correct.

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While Nossaman and Hunt was telling the CB Board members that AB 1794 was not going to pass, Nossaman was working for the Central Basin Water Association, a group of competing water companies who  wanted AB 1794 to pass.

And a group that wanted to take over CB, as witnessed by the $130,000 in lobbying payments to Nossaman.

The most explosive part of the exposé found that three board member of the CBWA, who were actively working to pass AB 1794, would eventually win appointment to the CB Board under AB 1794; and they would be appointed by Hunt.

Mark Grajeda, CB VP Dan Arrighi, and CB Director Frank Heldman were listed as CBWA board members.

Grajeda, one of the first appointees under AB 1794, was listed as president, Arrighi as treasurer, and Heldman as a director.

Appoint Complicit Board Members

The first round of board appointments occurred in early 2017, with Chacon and Hawkins immediately accusing Hunt and Apodaca of fixing the process – as they did when Hunt and Apodaca chose Nossaman as their law firm – and making the appointments “behind closed doors.”

When they brought their concerns to Hunt, towards the end of their reportedly heated conversation he brazenly told them, “[Cristina] Garcia put me in charge.”

Within days after the initial nominations, the city of Huntington Park cried foul when Hunt, with advice from Nossaman,  “disqualified” Dr. Michael Gomez, who was director of  the Walnut Park Mutual Water Company.

At the time, sources told HMG-LCCN that Dr. Gomez made it clear to everyone he would not be manipulated by anyone at CB and “was going to clean the place up.”

Nossaman attorney Lloyd Pellman contended that Gomez did not work for a city within CB’s boundaries nor was he a consultant,  requirements under AB 1794.

Yet Walnut Park is located in an unincorporated portion of Los Angeles, well inside CB boundaries.

Gomez was eliminated by Hunt and Pellman which triggered a lawsuit that is currently ongoing, with costs approaching one hundred thousand dollars.

The Plan Begins

The conflicts of interest of the appointees who were “creating a new governance structure for the Central Basin Municipal Water District,” were glaring. 

Appointed by Hunt was Downey Assistant City Manager John Oskoui, a city with their own water company; Oskoui replaced Dr. Gomez.

Also appointed was Pico Water District GM Mark Grajeda, who, at the time of his appointment, was President of the CBWA, who paid Nossaman $130,000 to lobby for AB 1794.

Golden State Water VP William Gedney rounded out the appointments.

With Gomez gone, and with a law firm that would do anything for them, Hunt and Apodaca put their plan into motion.

The first order of business was to remove Phil Hawkins, a well-respected former California Assemblyman, and install Apodaca as president. The move was blasted by many observers. 

Gedney, Grajeda, and Hunt crony Oskoui were the deciding “yes” votes to install Apodaca, who cost the district well over $800,000 in a sexual harassment lawsuit, awarded a no-bid $10,000 contract to his common-law wife, and was involved with the Calderons during their reign of corruption at CB.

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As Apodaca took the president’s chair, he immediately moved to halt the internal investigation looking into Hunt’s questionable appointment process, with the three new members all voting to kill the investigation.

Sell Off Assets Without Board Approval

CB’s Water Quality Protection Plant (WQPP)) is a federally funded program aimed at protecting the Central Groundwater Basin from contaminates flowing in from the main San Gabriel Basin via Whittier Narrows. 

Initially funded and operated with a $10 million federal grant, WQPP has been operating since 2007 under a MOU between CB and the “partner“ cities of Pico Rivera, Santa Fe Springs and Whittier.

WQPP is funded through revenues received by CB from water sales to the partner cities and would have become an invaluable asset given the current findings related to water contaminated with Perfluorooctanoic acid, also known as PFOA’s.

But three appointees secretly sold the plant, and Hunt and Nossaman knew about the negotiations yet said nothing.

According to Chacon, Hawkins, and Vasquez, Hunt and three appointees, Oskoui, Grejeda, and Gedney,  conducted secret negotiations, selling the WQPP to the city of Whittier.

Involved in the negotiations was a Whittier city employee; later Hunt would confirm to HMG-LCCN that the employee was hired by Gedney’s company, Golden State Water, after the WQPP was transferred.

And recently, HMG-LCCN learned that the city of Whittier paid Nossaman $17,000 for their services related to the WQPP.

Stealing Revenue from Central Basin

Frank Heldman, who recently resigned as an appointee,  was also complicit in the plan. When Los Angeles County Public Works took over management of Sativa Water, as a state agency, CB was in line to assume operations and repair the agency’s ailing infrastructure.

But Heldman was constantly visiting the area, supplying water bottles while pushing for his own company, Liberty Water, to take over Sativa.

If Liberty took over Sativa, Heldman would have been instrumental in stealing crucial revenues from the very agency he was appointed to serve.

And according to sources, unlike CB who already has the infrastructure in place, Liberty would have raised rates on the low-income residents of Sativa to pay for the repairs.

By this time, the board had heard Heldman was negotiating for his own company while also allegedly using his Metropolitan Water District Board position to curry favors, including getting a friend hired as GM at Maywood Mutual Water #2 located in East Los Angeles.

On November 25, Heldman was forced to resign.

Appointees’ Vote Triggers Costly Lawsuits

Two years ago, Hunt pushed hard to place a meter charge on all water utilities in CB’s area, even those who do not buy water from the district. 

The proposal would cost cities and other water utilities thousands of dollars and was widely panned by many, including officials from Lakewood, Norwalk, Santa Fe Springs and Whittier.

The CB board shot the proposal down, but a defiant Hunt said he planned to bring his meter charge in front of the board “at every meeting next year.”

Then AB 1794 was passed, giving Hunt the ability to install his puppet appointees.

One year later, after several debates in which all board members participated in, the group voted to approve the meter charge.

The employment positions of the three appointees should have caused recusals during the debates, but none was taken, with neither Nossaman nor Hunt objecting.

Oskoui, who works as the Assistant City Manager for Downey, was solidly behind the charge and enthusiastically voted yes. 

Months later, Downey filed a lawsuit against CB for assessing the meter charge; that move was followed by several other cities filing similar lawsuits.

Hiding Ethics Violations to Keep Appointees on Board

Every elected official and public employee who makes governmental decisions is required to submit an annual Statement of Economic Interest, also known as 700’s. 

700’s ensures transparency and accountability by providing information to the public about an official’s personal financial interests to ensure that officials are making decisions in the best interest of the public and not enhancing their personal finances.

On July 23 of this year, HMG-LCCN requested the 700’s of all current appointees including  Oskoui, Heldman and Arrighi, and also the two former appointees, Gedney and Grajeda.

The documents revealed that current CB VP Oskoui and Director Arrighi, along with the recently resigned Heldman, and termed-out Grajeda, reported nothing on all of their 700’s.

And Hunt and Apodaca knew.

Oskoui works for Downey, yet he reported zero employment income and no investments; Grajeda, who works for the Pico Water District, did the same; Arrighi, who works for San Gabriel Valley Water, reported nothing; and former Director Heldman, who works for Liberty Water, did the same.

Sources told HMG-LCCN that three days after the 700’s were requested, Hunt informed both Heldman and Oskoui about the inquiry, and, similar to Cristina Garcia in 2017, they amended their 700’s. 

That move came days before the records request by HMG-LCCN was completed.

Gedney was the only appointee to properly report assets on his 700’s, which should have immediately raised red flags. 

Gedney is the VP of Golden State Water, a company that delivers water in twenty CB cities and is a subsidiary of American States Water, a company listed on the  NYSE. 

Gedney’s 700’s showed that he owns over 10,000 shares of stock, valued at over $1 million, of American States Water.

Chacon, Hawkins and Vasquez had been complaining since the beginning about the 700’s and the appointee’s loyalties, but with the appointees and Apodaca controlling the board, the allegation fell on deaf ears. 

Nossaman Fired

Nossaman was recently fired as CB’s law firm, but not without a fight from Hunt, who wanted to retain the firm.

As a last act for “Garcia putting him in charge,” Hunt paid Nossaman over $20,000 after the firing, without board approval.

In an email, Hunt cited “prior work” as the reason for payment, but that was refuted by Chacon and Hawkins.

“They stopped working for us, said Chacon, “we were under no obligation to pay them anything, the contract was over, Hunt did this on his own.”

During their representation of CB, Nossaman was inextricably tied to Garcia; donating money to her campaign account while handling the Danny Fierro investigation on her behalf in the Assembly.

The firm was was lobbying for the passage of AB 1794 in Sacramento and Los Angeles; as a self-proclaimed “hands-on legislator” and author of the bill, Garcia had to be aware of Nossaman’s lobbying efforts.

All these actions occurred while Garcia’s “man in charge” – Hunt – along with a Nossaman representative, lied to CB Board members telling them the bill would not pass.

The bill passed, and now CB has seen one appointee resign while others continue to breach their fiduciary duties to CB, selling off assets and triggering costly lawsuits.

Meanwhile, Hunt has presided over the steepest decline in revenues in the history of Central Basin, without a single project in the works. 

Emails into Asm. Garcia went unreturned.

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3 Responses to Was Asm. Cristina Garcia’s Water Bill a Scheme to Bankrupt Central Basin?

  1. Pingback: Was Asm. Cristina Garcia’s Water Bill a Scheme to Bankrupt Central Basin? - 2UrbanGirls - Covering Compton, Inglewood, LA County and Beyond

  2. Dirty Water Flowing

    December 21, 2019 at 3:04 pm

    Interesting data, not all of Cerritos is serviced by said water district. For the past 5 decades, many residents from the Cerritos Islands sitting inside OC/ La Palma, have contacted said water district about this, but has fallen to deaf ears. Cerritos Islands are being serviced out of OC Water, at higher rates.50 yrs latter, many residents have died off and the new owners dont know this.

    Same corrupt water district gave some free landscaping for a public relations stunt to Cerritos El Rancho Park, Cerritos, Ca, 90703. The water district is so dumb and corrupt, said park is not serviced by Los Angeles Water District, but by OC Water Services. So the horticulture plants which were awarded to city of Cerritos, for water conservation efforts, went in to the hands of OC Water District, which has considerably higher water rates.

  3. Central Basin Ratepayer

    December 23, 2019 at 2:17 pm

    Time to get rid of Central Basin and all other “water boards.” Politician wannabe’s get elected and collect a paycheck for nothing. Eliminate the middle men. As for Central Basin’s money woos they have no one to blame, but themselves for all the lawsuits and lawyer fees they rack up. They are a dysfunctional group that needs to go away.