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Goldstein Investigation: Millions In LA DWP Ratepayer Money Going To Charity

LOS ANGELES (CBSLA) – The Los Angeles Department of Water and Power is giving away more than $1 million a year in ratepayer money to charities and nonprofits, an investigation by CBS2's David Goldstein has uncovered. He also found money going to one non-profit that has a DWP executive sitting on the board.

The LADWP made numerous donations over the past three years in amounts ranging from $5,000 to nearly $100,000. In total, more than $5 million was donated by LADWP to charities between 2015 and 2017, CBS2 determined.

Some of the charities are related to the environment or energy, while others appear to have no relation to water or power. One specific charity was located in Santa Monica, outside LADWP's territory.

"Should ratepayer money go for charitable contributions?" Goldstein asked political watchdog Jack Humphreville.

"The answer to that is no," Humphreville responded.

Humphreville, president of the DWP Advocacy Committee, thinks these charitable contributions should stop because the decision to donate to one charity versus another could be political.

"I don't think the department should be financing organizations and their people to go out there and pick my pocket," Humphreville said.

Martin Adams, chief operating officer for LADWP, makes the decisions on contributions and defends them claiming it's a way to help the community.

"We don't want to be, every two months, sending a water and power bill, we need to be part of the fabric of Los Angeles," Adams said.

CBS2 fought with LADWP for months to get its donation records. At first, the agency produced an incomplete report. Then, weeks later, LADWP came up with another record that included money going to nonprofits. However, CBS2 discovered it specifically left out hundreds of thousands of dollars going to one specific nonprofit.

When CBS2 searched the city controller's database, it found that LADWP paid the Council for Watershed Health, a nonprofit environmental organization, $220,000 in 2017. That donation was not included on the list provided by the agency to CBS2.

Furthermore, CBS2 discovered that Adams is vice president of the board of directors for the Council for Watershed Health.

Adams denied that LADWP was trying to cover up the donation. DWP says the money was for membership to the Council – and a contract for services – not donations.  That's why the money wasn't included on the list provided to us

"Is the department trying to hide the amount of money going to the council? Goldstein asked.

"Not at all," Adams said.

"Do you think it's a conflict of interest that you sit on the board, and hundreds of thousands of dollars is going to that nonprofit?" Goldstein asked.

"No, not at all," Adams reiterated.

Political ethics expert Bob Stern believes what LADWP did is not illegal, but in his opinion, it is not right.

"I think there's an ethical problem as opposed to a legal problem with doing that," Stern told CBS2.

"You don't want someone on the board of directors when that person is in charge of giving money to that organization," Stern added.

That's not the only link between LADWP and the Council for Watershed Health. CBS2 learned that the wife of LADWP Assistant General Manager Joe Ramallo, Wendy Ramallo, was executive director for the council for two years through December of 2017. Ramallo claims it was all above board.

"There's absolutely no conflict whatsoever," Ramallo alleges. "In fact, I went above and beyond to try and recuse myself from any business matter involving the council, and I did so."

"Don't you think it's suspicious that you are on the board of this nonprofit, your assistant general manager's wife was in charge of this nonprofit, and low and behold, you don't report a single dollar?" Goldstein asked Adams.

"I don't think it's suspicious," Adams responded. "It should have been on this list."

Meanwhile, struggling ratepayers who spoke to CBS2 at an LADWP office in Van Nuys were furious when they were told about the donations.

"I paid my bill, it's the last day!" said one angry ratepayer. "It's the last day, it's hard to collect. And they give the money away, I don't get it."

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