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Firm Hired to Investigate Central Basin Contract Has Ties to Dir. Juan Garza; Garza Voted to Approve the Firm

October 20, 2023

The efforts by certain Central Basin (CB) directors to illegally oust CB GM Alex Rojas has gone on for months, with newbie Director Juan Garza, who Los Cerritos Community News recently found was handing out lucrative no-bid contracts while Executive Director of California Cities for Self-Reliance-JPA, joining Leticia Vasquez-Wilson and Martha Camacho-Rodriguez in their quest to remove Rojas.

The three subsequently recruited Director Michael Gualtieri to join the effort. Many purveyors and other observers questioned Gualtieri’s move of joining with Vasquez-Wilson, who reportedly refuses to say the Pledge of Allegiance at meetings; and in an email obtained by LCCN, Vasquez was found harassing and intimidating CB employees, one who was pregnant at the time.

Similar questions surround Camacho Rodriguez, who, in the same email, harassed and intimidated CB employees, one who was pregnant at the time, calling her a heifer in the email. The employees sued and won a massive $2.25 million settlement. LCCN has been told that Camacho-Rodriguez also refuses to say the Pledge of Allegiance at meetings.

Yet Gualtieri joined forces and continues to vote with them, including participating in the latest scheme to fire Rojas using an “investigation.”

Michael Gualtieri works for La Habra Heights Water.

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First Start a Questionable Internal Investigation

A few weeks ago, without any evidence, Vasquez, Camacho, Garza – with Gualtieri in tow – moved to send out a Request for Qualifications (RFQ) to hire an investigative law firm to look into a company CB has done business with called Capstone. Sources are telling LCCN the investigation will cost over $100,000.

Vasquez’ litigious lawyer-husband Ron Wilson has been very vocal, alleging publicly that “major financial fraud is occurring” concerning Capstone and CB and that he has “the checks to prove it.”

LCCN has emailed Wilson seven (7) times, asking him for the proof, without response.

Strangely, Wilson has yet to give the checks to his reporter-on-speed-dial, Jason Henry with the Whittier Daily News, who has written extensively about Capstone without producing evidence.

Per the board vote, CB published the RFQ for the investigation and waited for responses.

Next, Illegally Contact Client

To prevent any possible undue influence, conflicts of interest, and corruption, most public agencies, CB included, prohibit prior contact with any firm that has responded to an RFQ.

But that is not what happened with CB Director Juan Garza and San Francisco-based Renne Public Law Group (RPLG), selected by CB to present its qualifications to the board this past September 29.

LCCN has obtained documents that show an employee of Renne Public Policy Group (RPPG), a subsidiary of RPLG, fielded a call from CB Director Garza just hours before RPLG was set to present its qualifications to the CB’s Board of Directors.

Garza did not inform anyone at CB about the call before, during, or after RPLG’s presentation, which occurred Friday, September 29.

Garza’s cover-up of the call is a direct violation of the Central Basin Administrative Code, changed after the 2015 state audit revealed several conflicts of interest between vendors and board members, similar to Garza’s interference.

In addition, the RPPG employee who took Garza’s call, Dane Hutchings, did not inform anyone in his company about Garza’s call.

During the presentation, Andrew Shen, Principal of RPLG, was asked if anyone at his company had any contact with anyone at Central Basin.

Shen said no.

Shen subsequently “found out” about the Garza-Hutchings conversation but waited three days to call CB attorney Derrick Lowe to explain the highly unusual call. Lowe asked for a letter explaining the incident.

Shen wrote, “Hutchings and Garza were professional acquaintances when Garza was a Bellflower Councilman and Hutchings worked for the League of California Cities. Then Mayor Garza was essentially Mr. Hutchings client.”

Shen continued, “the functions of RPLG and RPPG are entirely different. Although RPPG is a subsidiary…. the two groups operate separately, which is why we were unaware of the Garza-Hutchings call.”

LCCN sent questions asking Shen how he discovered the Garza-Hutchings phone call if the two “operate separately.”

Shen oddly referred LCCN to CB attorney Derrick Lowe.

When asked about the Shen referral, Lowe responded, “Our firm, myself specifically, is the project manager for both the independent investigation and the audit, which means, among other things, that we are tasked with being the contact point for the District.”

It was another unusual circumstance in an already tainted process.

The RPLG contract still needs to be approved by the CB Board, which it will consider at its October 23 meeting. Shen had no right to dodge legitimate questions, with Lowe’s help, concerning Garza’s call….and whether Shen had previous contact with Garza.

Next, Contradict Yourself

In his presentation to CB, Shen said no contact had occurred between RPLG and CB; he had to walk that back once he “found out” about the Garza-Hutchings call.

Then there was the occasion where sources told LCCN about statements made weeks earlier by Garza in committee meetings that strongly indicated Garza had previously talked with someone at RPLG. LCCN asked Shen about the previous contact, but Shen deferred to Lowe.

Shen said that RPLG and RPPG “operate separately, which is why we were unaware of the Garza-Hutchings conversation.”

Yet Shen contradicted that statement, writing, “The firm will create a wall between RPPG and RPLG.”

The entire Shen paragraph read, “To further address any concerns about the contact between Garza and Hutchings, we will create a formal ethical wall between RPPG and RPLG. The ethical wall will formally prohibit RPLG attorneys and staff from talking with any member of RPPG any aspect of the independent investigation of Central Basin.”

Shen should start with Hutchings’ phone; after the initial presentation, Shen told Lowe that Garza had texted Hutchings after the presentation, informing him of the board vote and the approval of RPLG.

Finally, Insert an Indemnity Clause to Shield an Investigation and an Illegal Board Vote

In simple terms, an indemnification clause is a legally binding agreement between two parties specifying that one party will compensate the other party for any losses or damages that may arise from a particular event or circumstance.

In the case of CB’s contract with RPLG, the contract would contain a clause whereby RPLG indemnifies CB.

But in an extremely questionable move, RPLG inserted their own indemnity clause, demanding CB indemnify RPLG.

The clause read, “District (CB) agrees to indemnify and hold Consultant (RPLG) harmless, to the full extent permitted by law, from and against all claims, formal or informal, actions, proceedings, liabilities or damages, whether actual or threatened, related to arising out of Consultant’s services for District under this Agreement. This includes indemnification for all costs incurred in investigating, preparing to defend, defending and resolving such claims or actions including attorney’s fees, experts’ fees, disbursements, settlement costs, and attorney time to be compensated at attorney’s then current hourly rate.”

The clause is unheard of in the business world; RPLG demands, in writing, that CB will pay all costs if any of RPLG’s employees commit a crime, criminal or civil, during their employment with CB.

CB’s attorney has strongly urged that the board reject the contract, “Due to the Indemnity Clause language requested by the Renne Public Law Group, LLP, General Counsel recommends that the Board not approve nor award the contract to Renne Public Law Group, LLP to conduct the Independent investigation of the District’s contract with Capstone and all related issues.”

But sources are telling LCCN that Garza, Vasquez, Camacho and Gualteri, in a possible Brown Act Violation, will vote to approve the RPLG contract at their October 23, 2023 meeting.

Previous emails into Andrew Shen were met with “I have forwarded your emails to Derrick Lowe.”

As of this afternoon, Shen has not answered questions about the indemnity clause.

Garza has not answered several texts.