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DWP Dirt

As a veteran employee of the Department of Water and Power and member of the International Brotherhood of Electrical Workers Local 18, Luciano Yi turned to the union for help when he was in trouble. The warehouse supervisor had joined a number of employees in criticizing a cleaning-supply contract that the DWP was forced to cancel amid allegations of poor quality and price gouging. Soon he learned he was being fired.

Yi was disappointed one day in June when, after months of lackluster assistance from his union representative, he went to the IBEW looking for answers. He needed to know if his union brothers and sisters were standing up for him — or not.

IBEW business manager Brian D’Arcy refused to speak to him that day, Yi says. D’Arcy wouldn’t even look him in the eye, he says. Another IBEW honcho, union representative Bill Lewis, also avoided eye contact, according to Yi. He realized he was alone facing charges that could end his career at the DWP and leave his family without a steady income. “This is the way animals behave,” Yi says of his visit to the IBEW. “They see you are wounded and they circle, waiting for you to fall.”

Now, in a lawsuit filed Wednesday in Los Angeles Superior Court, Yi is suing the DWP for violating his constitutional rights in retaliation for exposing “fraud, waste and corruption he witnessed at the DWP,” specifically, irregularities in a seven-year, multimillion-dollar contract with Empire Cleaning Supply. The contract was tossed in February, when City Councilman Tony Cardenas found less than 10 percent of the items Empire was selling to the DWP complied with the citywide contract that served as the basis for the Empire deal.

Despite a parade of DWP employees and vendors complaining to the Commerce, Energy and Natural Resources Committee chaired by Cardenas, and signs of a long-standing personal relationship between DWP Materials Manager Arnold Netka and Empire president Jerry Elkind, the city has neglected to investigate the financial loss to the city, if any, as a result of the faulty contract. Netka is a defendant in the lawsuit Yi has filed, along with second- and third-line supervisors Steven Bassett and Louis Feldmeier, and Assistant General Manager Thomas Hokinson, head of Corporate Services.

There has been substantial effort by the DWP to investigate Yi, however. After seizing his office computer and interrogating his colleagues, the DWP placed him on administrative leave in January and told him he was being fired on March 31. The DWP has accused him of violating procurement policies. His wife owns a company that sold tool bags to the warehouse where Yi worked. Yi claims he was not involved in his wife’s business, Final Supplies Inc. Copies of e-mails Yi has provided to the City Council show that it was Yi’s former supervisor, Mark Dimon, who negotiated purchase orders with Final Supplies. Other documents show that Yi processed five of the purchase orders Dimon placed with Final Supplies. Yi claims he handled the orders at Dimon’s direction, as part of his training. Dimon has been transferred to a new position. Final Supplies no longer sells to the DWP. Yi also claims the DWP coerced false or misleading statements against him.

Labor relations have been tumultuous at the nation’s largest public utility, which according to the Personnel Department has received more than 1,000 discrimination, harassment and retaliation claims since 1994. Department insiders and lawyers for the city have pointed to IBEW interference in employment investigations as an aggravating factor. The DWP has spent more than $3 million in the last five years on private law firms and consultants to investigate abuse in the workplace and educate managers on fair labor practices. “The DWP has a long history of resisting outside scrutiny,” says a veteran at the DWP familiar with workplace issues. “There’s no sign that these investigations have had any positive results.”

General Manager Ron Deaton, after invoking a “zero tolerance” policy with regard to equal-employment violations in April, informed the council on August 12 he has hired yet another private law firm to investigate employees’ and vendors’ allegations of retaliation stemming from the Empire contract. Until an exposé by the Weekly last August, the DWP for close to a decade concealed workplace strife with illegal confidential settlements, many of which were approved by Hokinson, a former assistant city attorney in charge of the DWP. City Attorney Rocky Delgadillo denounced such settlements in a speech at the Los Angeles Chamber of Commerce last year.

After a decade of lawsuits, legal fees, illegal confidential settlements and high-priced consultations, with the cost to the city well beyond $10 million, DWP veterans, elected officials, and City Hall insiders have acknowledged, mostly in private, that they are frustrated by this trend — and Deaton’s inability thus far to reverse it. Many concede they feel the DWP is out of control; they are unsure of where IBEW muscle ends and DWP management begins. Yi blames the IBEW for orchestrating his firing in concert with his direct supervisors, Netka, Bassett and Feldmeier. He claims the DWP denied him due process before and after he was notified of his firing.

Yi, 47, was born in Tijuana. He moved to the United States in 1976 with his mother, who had divorced his father and remarried. His wife, Lydia, was born in the Philippines. They have three girls, ages 8, 19 and 22, who all live at home. Yi attended high school in Mexico, and also a technical college there for a year. He joined the DWP in 1987 as a warehouse and tool-room worker. He was promoted to a warehouse supervisor — known as a “storekeeper” — in 2003. He became aware of products sold by Empire that he and other workers thought were inferior to other brands. He and custodial supervisor Sandra Miranda, among others, thought various cleaning supplies could be acquired for less than what the DWP was paying. Yi told his former supervisor Dimon he thought something was wrong with the Empire contract, and Miranda went public with her complaints.

Last August, Miranda blew the whistle on the Empire contract before the City Council. Yi and others began accompanying her to Council meetings. Yi has appeared before the council or the Commerce Committee at least six times, he says. Before he went public, but after signaling his distrust of the Empire contract, Yi says Feldmeier pointed a finger at him one day and made a gesture as if he was shooting a gun. “I knew they were coming after me,” Yi says. “In Mexico, if you mess with authority they shoot you. Here they go after your job.”

Deaton finally canceled the Empire contract in February. Empire president Elkind told the Weekly last year his company earned $8 million from the seven-year contract, which includes other city departments. Elkind has disputed claims that the products he sold the DWP were inferior or overpriced. He claims DWP employees were in cahoots with small vendors and made unauthorized purchases at exorbitant prices. He provided the Weekly with a homemade spreadsheet created with data he obtained from a DWP employee to prove his point. The DWP is the only agency to cancel the Empire contract. No other agencies have reported difficulty. Elkind estimates the total contract with the city, before he lost the DWP portion, was worth $25 million. “We were just a couple of guys selling brooms and mops,” Elkind says of the rise of Empire, which he shares with his partner Robert Cronyn. “We earned every sale we got.” Cronyn and Elkind did not return calls for comment on this story.

Soon-to-be-replaced DWP Commissioner Silvia Saucedo said recently that such policies require greater scrutiny, “from A to B to C.”

For now Luciano Yi is being scrutinized. That is, until his lawsuit goes into the discovery phase. Then the employees who talked to DWP investigators about Yi could be called to testify under oath. Mid-level managers who also are members of the IBEW will be compelled to testify as well.

Yet the IBEW itself has chosen to remain on the sidelines — at least thus far. “I had to badger them to finally acknowledge they are refusing to offer me representation,” says Yi, who has filed with the state for unemployment benefits and been denied. He has been forced to borrow money to feed his family. He says he hasn’t gotten a decent night’s sleep in a year. He is discouraged by the feeling that he is being selectively persecuted. He sees hesitancy in Cardenas and Councilman Dennis Zine, chair of the Personnel Committee, to dig deeper at the DWP.

Meanwhile, a motion to improve whistleblower protection is under committee review in the City Council. The motion is related to a proposal to beef up investigative resources in the office of City Controller Laura Chick. A co-sponsor of the measure: former Councilman, now Mayor, Antonio Villaraigosa. A colleague of Yi’s told him the mayor even promised to look into his firing, to make sure “the right thing is done,” he says.

“I’ve always hated the word ‘whistleblower,’” Yi says. “It reminds me of high school. It carries such a bad connotation. Why not think of a better word?”


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