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MWD Fails to Document Deals

The Metropolitan Water District gives scant explanation for $4.5 million spent on 44 recent PR contracts.

August 09, 2004|Jason Felch | Times Staff Writer

California's largest water agency has paid community leaders and former elected officials millions of dollars in public relations contracts with sparse documentation of how the money was spent, a Times review of the contracts shows.

In the last five years, the Metropolitan Water District of Southern California, a wholesaler that provides water to half of California's residents, spent $4.5 million on 44 public relations contracts. The contracts included little or no documentation explaining the qualifications of the contractors, why they were selected and what they accomplished, despite the public agency's policies requiring that information.

The consulting contracts supplement the work of MWD's own external affairs department, which has a staff of 60 and an annual budget of $15 million.

Of the 44 contracts -- most of which paid monthly retainers ranging from $5,000 to $40,000 -- 27 went to former elected officials, prominent community leaders and relatives of sitting politicians. Among the recipients were former state legislators, a sitting mayor, the son of one state senator and the husband of another.

Many contracts called on the recipients to lobby "opinion leaders" they knew on behalf of the agency. Other contracts focused on outreach to business owners or on public education about the MWD and water issues such as conservation.

Only five of the 44 contracts had competitive bids. MWD rules allow the contracting of professional services without competitive bidding but require that officials justify in writing why a contractor was chosen over others. No justification was provided in the majority of the public relations contracts.

MWD officials said use of politically connected consultants is an efficient way to publicize the agency. But Adan Ortega, MWD vice president for external affairs, acknowledged that the district has inadequately documented its choice of contractors and their accomplishments.

"In the business of lobbying, being too elaborate [in publicly available records] could hurt you more than help," Ortega said. "It's frankly awkward. You hire them for a very simple reason: who they know."

Ortega said that the water district should have included the required information and that it has increased oversight of contracts to reduce such lapses.

A state audit released in June criticized district policies on consulting contracts, which it said leave the agency "vulnerable to allegations of favoritism" and "allegations of inappropriate use of district funds."

"It seems like an awful lot of money to buy the relationships in the local community," added Robert Stern, coauthor of the state Political Reform Act and president of the Center for Governmental Studies, a Los Angeles-based public policy research group.

While sole-source contracts sometimes make sense, Stern said, the potential for abuse requires that public agencies provide detailed documentation about how the contracts are awarded and what services the consultants provide.

That would help the MWD avoid the impression of conflicts of interest and give the public a clearer sense of how its money is being spent, Stern said.

"This is public money we're talking about," he said. "It's a little too cozy."

The Metropolitan Water District does not sell water directly to consumers. Rather, it transports water from Northern California and the Colorado River, stores it and sells it to local water districts that don't have enough groundwater to supply their residents. Those districts, whose representatives sit on the MWD's 37-member board of directors, resell the water to their customers.

The 75-year-old agency has long been at the center of California's water wars. Last year, it completed a 75-year agreement among seven states on the allocation of Colorado River water. And it has fought off some customers' efforts to get their water from private firms.

Educating decision-makers and the public about the sometimes invisible role the MWD plays in providing Southern Californians with water is central to its mission, agency officials said.

Anaheim Mayor Curt Pringle, a veteran Orange County Republican and former speaker of the state Assembly, received $139,000 for two contracts with his lobbying firm Pringle and Associates. The water district sells Orange County more than 17% of its water, and the Anaheim City Council appoints a representative to the MWD board.

Last year Pringle received $30,000 from the agency to "provide strategic advice" and get community input on the Colorado River agreement. The MWD has no documentation of his activities, but Pringle said he spoke with Orange County business leaders, activists, officials and people in the water industry.

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