FBI Appear to Be Investigating LADWP For Over Compensating Employees

Twitter shows agents arriving to serve search warrants on the Los Angeles Department of Water and Power. There has been no comment from the Los Angeles City Attorney, and the Court has sealed the file on what the Federal Bureau of Investigations is seeking.

One theory is that rate increases have been more than allowed by law. This seems unlikely, since laws limiting rate increases would not properly be the subject of a Federal investigation.

The LADWP has been criticized for allowing excessive overtime. In 2018, 306 of its workers took home more than $100,000 in overtime pay, while the agency paid $250 million for overtime, a new high for the agency. The most egregious example of this is a security worker who was paid $314,000 in overtime, on a listed base pay of $25,000, along with three peers who were paid more than $200,000 overtime each. (The nationwide median wage for security officers was $28,500 in 2018.)

One policy which enables these large overtime payouts is a provision in the union contracts which requires a normal shift worked after more than one hour of overtime to be paid at double time, as well as that overtime is not based on working more than 40 hours in a week, but on working time beyond a "normal" shift.

A separate study found that LADWP's yearly payroll expense per customer was $490, significantly higher than the nationwide median for large utilities of $280 per customer.

LADWP is the largest municipal utility in the United States, serving over four million residents. It was founded in 1902 to supply water to residents and businesses in Los Angeles and surrounding communities. In 1917, it started to deliver electricity. It has been involved in a number of controversies and media portrayals over the years, including the 1928 St. Francis Dam failure and the books Water and Power and Cadillac Desert.

LADWP can currently deliver a maximum of 7,880 megawatts of power and, in each year, 160 billion US gallons (606 million cubic meters) of water.