lawyerTwo members of the Los Angeles Board of Water and Power Commissioners, a former Democratic congressman and a City Hall veteran, privately discussed a DWP contract with executives from a cybersecurity company, an exchange that is raising concerns among ethics experts.

Then-DWP Commission Chairman Mel Levine and then-Vice President Cynthia McClain-Hill made a roughly 36-minute phone call with two executives in 2019 to walk them through the utility’s plans to award them a contract.

Weeks later, commissioners voted to sign a 60-day, $3.6 million contract with the company and two other companies. Under the agreement, cybersecurity firm Ardent Cyber ​​Solutions is estimated to get about 75% of the work.

The city’s ethics law prohibits commissioners from privately participating in the review or negotiation of contracts they will vote on. DWP governance rules also ban commissioners from having private discussions about bids with suppliers.

Both Levine’s attorney, Daniel Shallman, and McClain-Hill said the conversation was good. The goal was to ensure that Ardent executives, who worked on DWP cybersecurity under another contract, remained employed at the utility, they said.

Both also said the aim was to protect the DWP, which could face attacks on water supplies and the electricity grid.

During the phone call, which was secretly recorded, the commissioners discussed billing, when the DWP board would vote on the contract and the date the utility would give the company its first work order.

DWP commissioners are volunteers appointed by the mayor. They vote on multimillion-dollar contracts at public meetings, oversee the department and implement the mayor’s policies.

Levine’s attorney and McClain-Hill said the two commissioners were not involved in vetting Ardent as a supplier or any other aspect of the competitive bidding process for cybersecurity work because that was handled by the Southern California Public Power Authority.

The Energy Authority is a group of around a dozen utilities, including the DWP, which enters into framework agreements with suppliers for its members.

In Ardent’s case, the DWP opted for its own short-term contract with the company, rather than seeking work through the power authority’s agreement.

With its own contract, the DWP would be able to set its own terms for Ardent’s billing schedule, but also rely on the power authority’s review process, McClain-Hill told the executives on the call.

McClain-Hill, now chair of the DWP committee board, acknowledged to The Times that it was unusual for her and Levine to wade into the discussion that would normally be had by staff.

“During my tenure as a member of the Board of Water and Power Commissioners, I have always behaved ethically and have never engaged in abusive or illegal conduct,” McClain-Hill said.

Shallman, Levine’s attorney, said the transcript of the phone call shows that “Mel acted in the best interests of DWP and its clients and fully complied with all applicable laws.”

Levine represented the LA region in Congress for a decade until 1993, leaving the DWP board in 2020.

Some ethics experts interviewed by The Times questioned whether the commissioners followed the city’s ethics rules.

Section 49.5.11 of the city’s ethics ordinance states: “Except at a public meeting, a member of a city board or commission shall not participate in the development, review, evaluation, negotiation or recommendation process for bids, proposals or any other solicitations for the award or termination of any contract, modification or change order involving that board, commission or agency.”

Other parts of the ordinance prohibit bid commissioners from disclosing confidential information.

Even if the Southern California Public Power Authority selected Ardent for a contract, the DWP had the final contracting authority, so “the communication is still inappropriate,” said Neama Rahmani, a former assistant U.S. attorney and former enforcement director of the city’s ethics committee. .

Wrong, wrong, wrong. Period, said Laura Chick, a former LA city manager and member of the City Council. They should not have to have a separate conversation with a bidder. And they should probably never have a private conversation with them unless there is staff present.

Levine and McClain-Hill, both attorneys, were appointed to the DWP board by then-Mayor Eric Garcetti. The call first came to light in legal filings, but the

full

discussion

has

not previously reported.

The Times viewed a recording of the phone call and emailed a transcript to Levine and McClain-Hill.

The phone call appears to have been surreptitiously recorded by Paul Paradis, a former lawyer turned FBI informant in the government’s corruption investigation into City Hall.

Paradis said in federal bankruptcy court documents that he recorded Levine and McClain-Hill on April 5, 2019, as part of his work for the FBI. Paradis’ lawsuit was reported in 2022 by Knock LA and Debaser.

Paradis declined to comment on the audio reviewed by The Times. U.S. Attorney’s Office spokesman Thom Mrozek also declined comment.

The phone call took place as the corruption scandal was unfolding at the highest levels of the DWP and the city attorney’s office. It would enter the public consciousness when the FBI searched the two city departments in July 2019.

The government’s investigation focused on cybersecurity contracts, illegal payments and a bogus lawsuit over erroneous DWP accounts. Paradis worked on the lawsuit for the city and secured DWP contracts before helping the FBI.

The DWP’s chief executive, David Wright, later pleaded guilty to a bribery scheme involving Paradis’ cyber security company.

Another top DWP executive, David Alexander, later admitted that he manipulated the passage of the Ardent contract through the Southern California Public Power Authority by manipulating the score through his role on the power authority’s cybersecurity committee.

Prosecutors have never suggested that McClain-Hill, Levine or Ardent’s two executives, Jeremy Dodson and Ryan Clarke, knew of Alexander’s manipulation.

At the time of the phone call, Dodson and Clarke were working at the DWP through Paradis’ company, known as Aventador. Dodson and Clarke formed their own firm, Ardent, after the DWP board canceled the Aventador contract when media reports questioned Paradis’ role in the bogus lawsuit.

During the phone call, McClain-Hill told Dodson and Clarke that the power authority would approve Ardent as the seller. Then, she explained, the DWP would contract directly with Ardent so the utility could determine the frequency of payment, as well as the terms and conditions of how that happens.

Levine is heard assuring cybersecurity executives that the two commissioners would support the contract if it came before the DWP board.

We need three votes, and you have two here, Levine said at one point, describing a timeline for approval.

Dodson and Clarke did not respond to requests for comment. Neither has been accused of wrongdoing.

The commissioners also discussed a strategy to divert public attention from Ardent, with McClain-Hill telling executives the plan is to “dim the spotlight a little bit” on the company. The strategy calls for a second security company, Archer, and possibly a third

,

would be added to the DWP contract, McClain-Hill said on the call.

McClain-Hill, who previously served on the city’s police commission, told The Times that she did not reveal any confidential information during the phone call and that her “spotlight” comment was about protecting Dodson and Clarke’s reputations amid the media attention for Paradis.

She became involved with Ardent because of her concerns at the time about the judgment of Wright, the then chief executive of the DWP, she told The Times.

So McClain-Hill said she knew that

the

Southern California Public Power Authority would choose Ardent as a supplier because Wright told her to

So

before the April 5 call.

The power authority’s cybersecurity committee formally recommended Ardent as a bidder on April 5. Weeks later, on April 18, the Southern California Public Power Authority board approved a framework agreement with Ardent and the other companies.

.

McClain-Hill continued to communicate with Clarke, telling him in a text message days before the DWP board vote that Garcetti’s office wanted the contract to be split into three separate agreements so that no single agreement would amount to a double-digit amount. The text of April 19, 2019 has been reviewed by The Times.

“We will approve a second contract within 45 days and a third contract 45 days after that,” McClain-Hill wrote to Clark. We’re finally at the end of this road…I hope this works for you.’

On April 23, 2019. McClain-Hill, Levine and other members of the DWP board approved the utility’s contract with Ardent, Archer and another company.

Shallman, Levine’s attorney, when asked claims that the DWP had final contracting authority so commissioners should not have discussed the contract, saying Levine “fully complied with all applicable laws”.

“Rather than showing any attempt to improperly influence the contracting process or to enter into prohibited negotiations, the transcript demonstrates a good faith effort to ensure continuity of service from qualified professionals in which DWP already had time and money invested,” Shallman said.

“Simply put, Mel didn’t want to leave DWP vulnerable to cyber threats because the experts they hired were being chased away by the DWP bureaucracy or they feared they wouldn’t get paid,” he said.

Sean McMorris, transparency, ethics and accountability program manager at California Common Cause, questioned why staff, and not commissioners, did not speak to Ardent.

“If the purpose of the meeting was to work out the contract and tell the company they’re going to vote for them, and what the contract would look like, then things like that shouldn’t be happening in a private forum,” he said.

“Even if it is legal, it doesn’t seem appropriate,” McMorris added.