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DWP: Reservoir Dogs 

Can Austin Beutner negotiate a DWP swamp protected by top belligerent Raman Raj?

Thursday, May 13 2010
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It's called a bucket truck, a large Department of Water and Power vehicle with a cherry-picker mechanical arm, and it's parked all day on St. George Street in Los Feliz, under a sweet gum.

It's a beautiful Friday, and it's hard to figure out why the truck is there. There are no power lines on the block, no limbs to trim, and the lamplights are almost low enough to service from the sidewalk.

There's a stuffed Ninja Turtle strapped to the truck's grill — it's the Michelangelo character, in fact, known as the lazy teenage mutant ninja who loves to party. A couple of orange cones next to the truck are accompanied by a sign advising, "TREE WORK AHEAD."

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But no tree trimming is done all day. No neighbors on the block spot any DWP workers all day. No manhole covers are budged. The fun-loving ninja crew is up to something, and whatever it is, it doesn't appear to be work.

Another day on the streets of Los Angeles with the DWP.

"We're down 2,000 employees," IBEW Local 18 spokesman Robert Cherry claims from San Francisco (his boss, Brian D'Arcy, refuses to talk to L.A. Weekly). "We can't keep up with the work. They have to do a lot of overtime."

Would this crew be among those that can't keep up with the work?

"The crews were working in the hills above the location on a narrow street. They left their boom truck (with chipper attached) on the much wider street below and then hauled the brush to the chipper later on in the day with a pickup," writes Daryl Buckley, the supervisor of the truck, in notes for an investigation led by yet another DWP employee, Fleet Services Manager Peter Suterko. Neighbors dispute Buckley and Suterko — they saw no work done all day.

The department of 9,000 workers, once the pride of the city, is becoming known for its failings: its beer-swilling, bar-hopping truck crews; its blown water-pipe mains; its tree-harming, blunt-cut pruning; its drained and contaminated reservoirs; its bloated union salaries; its studied lack of transparency; and the ceaseless outrage it provokes in attempting fee hikes and costly, voter-based bond issues.

An exposé a few days ago on KCBS by reporter David Goldstein showed DWP workers guzzling 24-ounce beers behind the wheel and taking two-hour-plus lunches at strip clubs — drawing ratepayer-paid salaries all the while.

DWP is one of the rare city departments to which citizens pay regular fees, a fact that keeps its exceedingly well-paid employees safe from layoffs in this dire local economy. Because DWP takes in enough cash to cover its costs and then some, Villaraigosa and the City Council increasingly rely on the department as a cash cow that can help pay for spending and services having nothing to do with providing water or power.

"DWP never runs out of money, they just increase the rates," explains Nick Patsaouras, past president of the Board of Water and Power Commissioners.

Now that Villaraigosa has appointed Austin Beutner — formerly with leveraged-buyouts giant Blackstone Group and co-founder of Evercore Partners — to head the DWP, some see the possibility of rapid change in the department's culture and scope.

They may not be the kinds of changes the department's critics are hoping for.

Beutner, a sometimes-dour, no-nonsense loner, is not the type to appreciate the esprit de corps of a stuffed turtle on a truck grill, or to indulge employee beer runs on the job. But worker high jinks seem too picayune to garner his interest; he commented on KCBS's embarrassing beer-busting videotape only after Villaraigosa did.

Beutner's hands-off, solitary-cowboy persona derives, in part from his personal fortune, which is immense. Since being named to the mayor's unwieldy team of 12 deputy mayors in January — his title was then upgraded to "first deputy mayor" — and given a bulky portfolio overseeing many powerful city departments, Beutner has tended to meet with top city managers once, then vanish. He has vowed "greater transparency" at DWP but remains aloof. He contacted the Weekly through an intermediary a few days ago seeking a meeting, then did not respond to the paper's replies to his request.

Beutner came to City Hall after re-evaluating life as a corporate raider following a severe bicycle accident that nearly claimed his life. Despite his corporate financial background, Beutner appeared willing to make early peace with the powerful union that dominates DWP, D'Arcy's IBEW Local 18. "He's decent and he is thoughtful," D'Arcy told the Weekly through spokesman Cherry.

Beutner cites his ownership stake in an electric-grid company as utility "experience." But his lack of an engineering background puts him at a distinct disadvantage among DWP managers like Chief Operating Officer Raman Raj, who are expected to resist change. And his lack of expertise could raise public-safety issues should Beutner face a reservoir-contamination problem such as the one former DWP chiefs Ron Deaton and David Nahai dealt with in 2007.

The 49-year-old multimillionaire who takes a $1-a-year salary has floundered in his first few weeks, scrambling to learn simple basics about the huge monopoly utility. In an op-ed in the Los Angeles Times, he said he would "take a hard look at why the utility owns more than 300,000 acres of land" — a comment that raised eyebrows among DWP observers and even former chiefs. In fact, the utility owns 312,000 acres in the Owens Valley, where the bulk of L.A.'s drinking water comes from.

"I would caution that he has to become more familiar with DWP operations," says Patsaouras. "The department, even in my time and Nahai's, visited that issue" — of the city's often-detrimental influence over the far-off Owens Valley. He adds, "It's a very delicate political issue."

As he tiptoes through land mines laid for DWP general managers, most crucial will be how Beutner handles D'Arcy, and D'Arcy's greatest friend in upper management, Raj, the controversial chief operating officer.

Raj was fired in 2001 after the DWP was forced to pay $1.3 million to an equal-opportunity manager who accused Raj and his underlings of interfering, on behalf of IBEW, in workplace equal-opportunity probes. Raj then threatened to sue the DWP and got a private "separation agreement." Today, Raj denies wrongdoing.

That seemed to be the last of Raj. But in 2005, this paper reported that Henry Martinez, another DWP boss said to be cowed by D'Arcy, awarded Raj's firm a contract. After Villaraigosa became mayor, Raj, who outside of work was active in political fund-raising, was brought back inside DWP.

It is widely believed that D'Arcy pushed to get Raj rehired, and Villaraigosa, keen to tap IBEW campaign funds, complied.

Increasingly emboldened under Villaraigosa, Raj openly feuded with the City Council over a rate hike last month while his boss, David Freeman, was on vacation. He further outraged city leaders by refusing to transfer a long-promised $73.5 million to city coffers. And days ago, Raj proposed a DWP budget so impossible to untangle that Beutner, a man who can really read his numbers, slammed it as "Greek — and I don't know Greek."

Yet in February, Freeman predicted Raj would succeed him (Beutner is doing it only temporarily), telling 200 DWP employees in Van Nuys that "Raj is the next general manager and it's just a matter of time."

That's very unlikely now. Raj has behaved with toxicity toward duly elected leaders. And former chief Nahai notes that, "The next GM must have vision, knowledge, moral fiber, independence and credibility. As recent missteps have amply proven, DWP's present top staff officials simply don't fit the bill."  

Now, Beutner must somehow conduct a serious search for a world-class utility chief, even as he tries to launch changes of his own.

"When there's a new interim general manager, your physical presence is absolutely essential," notes City Councilman Bernard Parks. Parks, the former LAPD chief, grilled Beutner when he appeared before the City Council recently because, Parks says, "the real meat of running an organization is an ability to change the actual institutional culture. There's an old saying — 'steady by jerks' — you have to do things a little at a time, you can't just say it once and go away."

As for the internal DWP "investigation" of its ninja-adorned bucket truck parked — or was it ditched? — on St. George Street in Los Feliz, DWP officials couldn't provide the Weekly a street address where they insist the real work happened.

"Investigating themselves? It's like expecting the knife to cut its own handle," a DWP employee says.

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