So potent is the fear of a strike, Chaudhry writes, when executives of the DWP broached the subject of a strike contingency plan the ranking member in attendance remarked that the union "wouldn’t like it" if such a discussion took place. "After that ominous warning the subject was dropped entirely," he writes. The last strike occurred in 1993. At the time it was the first in 20 years. The nine-day strike resulted in a new contract for Local 18 members and a 9 percent salary increase over four years. The strike came on the heels of unsuccessful efforts by Mayor Richard Riordan to transfer funds from the DWP to the city in excess of the usual 5 percent transfer, and to dip into the DWP pension to pay for more police and firefighters. City Councilman Joel Wachs called the strike "shockingly irresponsible." But it galvanized Local 18 for the long haul.
Former Riordan chief of staff Bill McCarley took over as general manager in 1994 and put in place the joint labor-management structure that Chaudhry and others in the department say has run amok. With a dire need to reduce the department’s $7.9 billion debt, McCarley cut 2,000 jobs in 1994, while the DWP hired an international consulting firm, PSC Energy, for $1.1 million per month to transform the culture from "an entitlement mindset" to a customer-service organization. In exchange for its cooperation Local 18 was allowed to participate in future management decisions such as selecting a new general manager. Labor-management teams were established "to examine and improve all aspects of system operations." When McCarley left the department in 1996 D’Arcy praised him and said, "He brought us in as partners."
McCarley’s successor, David Freeman, the former head of the Tennessee Valley Authority, turned joint labor management into an art form, insiders say. He navigated the DWP through a $350 million buyout in 1997 without threat of a strike, again reducing the staff by 2,000 jobs. In exchange he allowed D’Arcy to pick the management members of the Joint Resolution Board, which was supposed to streamline and improve the employee grievance process. A succession of non-civil service managers came on board — several from Southern California Edison, which is heavily represented by a different IBEW local.
Freeman launched initiatives under the banner of Green Power in partnership with Local 18, but they have been discredited. An audit by City Controller Laura Chick concluded that Green Power — marketed heavily by the Hahn administration through the efforts of Fleishman-Hillard — never produced results. In 1998, Freeman projected a power rate decrease of 15 percent by 2003. Instead, by 2004, the DWP proposed raising rates 18 percent. Freeman did not return calls for comment.
In 1999, Freeman brought in a pivotal figure named Raman Raj to take over corporate services, labor relations, human resources, security and equal opportunity. He had directed pension fund management, union relations, compensation and training at the MTA from 1996 to 1999. Raj is a human-resources veteran who began his career at the Southland Corporation, in Dallas. He later worked for Flying Tigers in Los Angeles and Kaiser Permanente. He left the MTA under circumstances the MTA would not disclose.
Raj’s two-year stint at the DWP marked a period of turmoil for the DWP, during which employee allegations of discrimination, harassment and retaliation peaked. He was fired in 2001 after the department was forced to pay $1.3 million to its equal-opportunity manager to settle a claim of harassment and retaliation alleging that Raj and his subordinates were interfering with equal-opportunity investigations on behalf of Local 18. Raj later negotiated a separation agreement after threatening to sue the DWP. In October 2004, days before Deaton was scheduled to take the helm, acting general manager Henry Martinez approved a contract with Cap Gemini and Raj’s company Resources Roundtable as consultants to the DWP-IBEW Oversight Committee, to devise strategies for "enhancing the use of resources, eliminating duplication of efforts and supporting an integrated approach to the DWP’s implementation of more effective business processes." A source familiar with the inner workings of Local 18 and the DWP says of the contract, "That is typical of managers doing what Brian wants. Henry has never been able to say no to Brian." Raj has not returned a dozen calls for comment. Raj brought political connections to the department, along with Freeman. Raj has been a member of the steering committee of the Saxophone Club of the Democratic National Committee and, sources say, a longtime ally of Antonio Villaraigosa, dating back to the time they both worked at the MTA. Villaraigosa, in past interviews, has denied a close relationship with Raj, who has contributed to Villaraigosa’s campaign.
In his memo to Hahn, Chaudhry refers to Villaraigosa when he writes, "I see no reason for Local 18 to abandon its former commitment to your main adversary." Chaudhry then urges Hahn to curb union domination of DWP’s managers as a means of distinguishing himself from Villaraigosa. "The damage attributable to Local 18 is done," he writes. "Your administration and character have been impugned by association. Those who question character can be silenced by a unilateral demonstration of moral leadership worthy of a second term."
Chaudhry, who is on personal leave and out of the country, puts it on the mayor to solve DWP’s problems: "Only the mayor can demand more of management than routine capitulation to inordinate pressure for unreasonable concessions that do not result in mutual gains."
To read this memo as a .pdf file, click here.
