Support for LAist comes from
We Explain L.A.
Stay Connected

Share This

News

LADWP Contractors Allegedly Used Taxpayer Money For Prostitutes, Parties In Vegas

ladwp-fraud.jpg
LADWP HQ | Photo by Mike Chen aka Metalman via LAist Featured Photos on Flickr
Stories like these are only possible with your help!
You have the power to keep local news strong for the coming months. Your financial support today keeps our reporters ready to meet the needs of our city. Thank you for investing in your community.


Accounting firm PricewaterhouseCoopers, which was hired to rollout the L.A. Department of Water and Power's billing system, allegedly over-billed the city intentionally, and spent the money on prostitutes, two bachelor parties in Las Vegas, bottle service, and "lavish hotel stays."The L.A. City Attorney has filed a motion seeking permission to amend a complaint "detailing an alleged fraudulent conspiracy," according to a statement from the LADWP. It continues:

The alleged fraudulent conspiracy is detailed in the court filing and includes payments authorized by PwC and its senior managers to reimburse their subcontractor for payments made for the services of escorts and prostitutes, lavish hotel stays, two bachelor parties and thousands of dollars for "bottle service" liquor at Las Vegas hotels and clubs in July 2011 and May 2013.

The statement alleges that a "Partner-in-Charge," along with several other senior-ranking managers at PwC, "repeatedly" submitted intentionally falsified PwC time records and funneled the money that was used to pay for the above "improper expenses" through a contractor.

No specific amount of money has been cited, but the city alleges that it was in the "tens of thousands of dollars."

Support for LAist comes from

PwC denied the allegations in a statement to ABC-7, saying they "never submitted falsified time records to LADWP and never received a single dollar from LADWP to which it was not due."

Daniel J. Thomasch, a lawyer for PwC told the L.A. Times in a statement, "LADWP's amended complaint is not provoked by concerns over a subcontractor's billing practices—it is a crude attempt to disparage PwC because PwC has had the audacity to stand up to LADWP's much-hyped, but baseless, lawsuit."

Dysfunction at LADWP has been well-documented; last year, DWP sued PwC for mismanaging the rollout of the billing system in 2013, which led to inaccurate, inflated bills being sent out. The papers filed on Thursday are an amendment to the lawsuit.

On Thursday, Mayor Eric Garcetti said that if the allegations are true, they "are not only reprehensible, but also a betrayal of our core values and the people's trust. We demand the utmost integrity from those with whom we do business; DWP ratepayers deserve nothing less."