LOS ANGELES (CNS) – A second former Los Angeles Department of Water and Power executive has agreed to plead guilty to a federal criminal charge in the ongoing probe of the city’s handling of the botched launch of a DWP billing system, federal prosecutors announced today.
David F. Alexander, 54, of Arcadia, will plead guilty in downtown Los Angeles on a date to be determined to a felony charge of making false statements. Alexander was DWP’s chief information security officer from May 2017 until February 2019, and then served as the department’s chief cyber risk officer for the next six months.
Last week, a former DWP general manager, David H. Wright, 62, of Riverside, agreed to plead guilty to a federal bribery charge in the case. On Nov. 29, Paul Paradis, 58, a New York attorney hired by the city, also agreed to plead guilty to a bribery count in the secret scheme to settle a major lawsuit brought against the utility on terms favorable to the city.
Prosecutors said Alexander knew Paradis, who was representing DWP in a lawsuit against the vendor the utility blamed for the billing debacle, which led to many customers receiving wildly inflated bills. In 2017, Paradis created a downtown Los Angeles-based company known as Aventador Utility Solutions, which obtained a three-year, $30 million no-bid contract with DWP to overhaul the faulty billing system. Aventador also performed certain cybersecurity-related work for DWP.
In March 2019, Paradis — who simultaneously represented a ratepayer suing DWP and the department itself — resigned as special counsel for DWP’s billing lawsuit and, later that month, allegedly sold Aventador to an employee, prosecutors said. Aventador was changed to Ardent Cyber Solutions, and Paradis was to have no financial interest in or control over the Aventador or its successor company.
A month earlier, the Southern California Public Power Authority — a collective of 11 municipal utilities, including DWP — issued a request for bids, written primarily by Alexander, for a cybersecurity services contract at the behest of Wright, DWP’s then-general manager. Alexander was also one of four members of the scoring committee that would review the bidders, and manipulated the process to favor Aventador, and later Ardent, prosecutors said.
After SCPPA’s cybersecurity group informed Ardent that it would recommend the company for the SCPPA contract, Alexander met with Paradis, who by that time was cooperating with the FBI, telling the lawyer he had used the bidding process to get the “desired outcome,” according to prosecutors.
Alexander boasted, “that was me driving it,” according to court documents.
The SCPPA board approved a contract for Ardent and two other vendors worth a total of $17 million. In June and July of 2019, Alexander manipulated another $82.5 million contract to Ardent, prosecutors said.
Alexander later solicited from Paradis a future job as the chief administrative officer of Ardent, along with an executive-level salary, a signing bonus, and compensation of $60,000 per year for 30 years to cover his early retirement penalty from DWP, prosecutors said.
On July 22, 2019, the FBI served search warrants at DWP, and two days later, Alexander lied to the FBI about his conversations and agreements with Paradis, prosecutors said. Days later, Alexander lied again, falsely stating that he had turned down a job offer with Ardent and had never provided any guarantees to Ardent or Paradis.
Paradis has agreed to plead guilty to a bribery charge for accepting an illicit kickback of nearly $2.2 million for getting another attorney to purportedly represent his ratepayer client in a collusive lawsuit against DWP related to the billing debacle. Paradis is cooperating with the ongoing investigation into corruption at DWP and is expected to make his initial federal court appearance on Thursday.
Wright will plead guilty to a federal criminal charge for accepting bribes from Paradis in exchange for his official action to secure the $30 million no-bid contract for Aventador. His change-of-plea hearing is expected in the coming weeks.