Otay Water District: A History of Death Threats, Scandal and Sewage-Tainted Water

A History of Death Threats, Scandal and Sewage-Tainted Water
October 16, 2011
by Rob Davis
Voice of San Diego

The officials' phones often rang late at night or after meetings. It was the early 2000s, and the Otay Water District was roiled by scandal, by accusations of mismanagement, bribery, fraud and self-dealing.

What followed was never good.

Sometimes came only the sound of a single kiss. A warning, police said. The kiss of death.

Sometimes came an ominous message. Rap music, blaring the same threat: Come on, motherfucker, come on.

When agency attorneys investigated, the answer they uncovered sounded like the kicker to a campfire horror story: The calls had been coming from inside — from the phone of one of the district's own board members.

The conflict typified the dark days at what could otherwise be an unremarkable agency with a routine task. But even a decade later, the Otay Water District is hardly unremarkable. It's proven that safely delivering water to 206,000 people from Otay Mesa to Jamul isn't always routine — though its customers may wish it was.

Across the county, more than 20 public agencies like Otay play a key role in daily life. They're middlemen who buy water from major suppliers and deliver it to the taps of homes and businesses. While big suppliers bring water here from sources far away, agencies like Otay maintain local pipes, read your meter and send you a bill every month or two.

They typically do that in relative obscurity. It's why you may not have heard of agencies like the Rincon del Diablo Municipal Water District. But they are powerful entities. Otay has the authority to set and raise water rates. It determines how much developers must pay to connect new homes and offices to the water system. Its board has the discretion to spend millions of dollars on construction. Otay's service territory includes large stretches of a Southern California rarity: Undeveloped land. And it controls the only local water connection between San Diego and Tijuana.

Otay hasn't enjoyed the same obscurity as other water districts here. During the last decade, it's delivered sewage to drinking water taps, tried to squelch criticism with legal action and endured costly litigation from its customers, employees and board members.

Though the board member implicated in those late-night calls a decade ago is gone, death threats have continued even today.

♦♦♦

During the tumult's peak in the early 2000s, a long-time board member got fed up and quit.

The board member, Mark Watton, lashed out against the district's leadership, setting his sights on one man: Otay's board president, a radio station owner named Jaime Bonilla trying to distance himself from accusations of favoritism engulfing the rest of the agency. In a letter to La Prensa San Diego, Watton said Bonilla was right in the middle of Otay's problems.
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"A (hopefully) short sad chapter in the Otay story, and what happens when public officials like these (including Mr. Bonilla) only want the position for their own ego, power and enrichment," Watton wrote.

Now, 10 years after he resigned, Mark Watton runs the Otay Water District. He was the county's highest-paid water official in 2010, in a job that gives him 71 days of leave annually. Add in weekends, and that's almost half the year.

Watton today says that he had it wrong. Bonilla was wearing a wire, working as an informant for the FBI. Watton said he didn't know Bonilla was trying to nab two other board members and a prominent Los Angeles lobbyist in a failed bribery sting. The case eventually fell apart.

"I didn't have the full picture of what was going on," Watton said.

Watton today answers to the district's five-member board.

Its president, still, is Jaime Bonilla.

♦♦♦

Something was terribly wrong with the water in Suite 109.

It was the summer of 2007. Business owners throughout the Fenton Business Center in Chula Vista's Eastlake neighborhood reported that their tap water suddenly appeared yellow. Others said green. They all agreed the water was foul, so gross some were embarrassed to have customers use their restrooms.

The story of what went wrong there unfolds across hundreds of pages of court documents in a case that has stretched on for four years. It's one of several lawsuits that have successfully targeted Otay as a defendant.

In the Fenton case, Otay blamed the problem on stagnant water in the newly constructed complex and told the businesses to flush their lines. It didn't help. When the district came out and checked, they tested the water at a nearby fire hydrant, where it looked fine, not at the businesses' taps. The color lingered for days.

The mysterious cause was unimaginably foul. Worse, it had been happening undetected for more than a year.

The district had been delivering partially treated sewage to drinking water taps since the park opened. People had been drinking and washing their hands in water contaminated by human waste. In lawsuits, they said they'd even brushed their teeth with it and suffered from countless gastrointestinal illnesses without knowing why.

No one noticed at first because the sewage was diluted with tap water. But that summer, Otay began buying more treated sewage to put in its purple pipe system — suitable for lawns but not people. After that, what came out of the businesses' taps was 100 percent treated sewage.

The district had put a potable water meter on a pipe meant for irrigation and missed chances to catch it. Otay didn't re-inspect the facility after discovering one of its inspectors had taken a bribe on another project from a contractor involved in the park's construction.

A civil jury found Otay and other developers had acted negligently. Lawsuits have held the district liable for $3 million in damages, money Watton said will be covered by an insurer, not ratepayers. But the settlements are the latest to inflate Otay's legal bills and leave a thick trail of paper in courthouse files over the last decade.

There came Tom Harron, the district's former attorney, in 2001. He alleged that he was fired because he was white so the newly elected Bonilla could hire Latino friends. Two rival former Otay board members and a former auditor testified under oath in the case that they'd regularly heard Bonilla call Harron "El Gringo" or "white boy" — allegations he denied.

"With Mr. Bonilla," one rival board member testified, "it is not enough to simply put a man out of his job. He wants to just completely annihilate this person."

The district apologized and settled with Harron in 2007 for nearly $700,000.

There came a class of six employees (five white and one black), alleging racial discrimination as the cause of their departures around the same time as Harron. One rival board member said Bonilla had used a slur to describe the fired black employee. The former auditor, then suing the district, testified that shortly before winning his seat, Bonilla had said about Otay: "We got to get rid of all the gringos." Bonilla denied that.

The district settled in 2007 for $371,000.

♦♦♦

This case was terribly flimsy. And it carried echoes of the political retribution that had once clearly defined Otay's dark days.

But this was March 2011, and an attorney for the Otay Water District was making a case for censure to the Chula Vista Ethics Board. One of the advisory group's members, a businessman named Chris Shilling, had run unsuccessfully in November against an Otay board member, David Gonzalez Jr.

The election hadn't been close. Gonzalez, the brother of Red Sox first baseman Adrian Gonzalez, won easily after far outspending Shilling.

Shilling had taken his campaign against Gonzalez to Facebook, on a page with 46 followers. There, he called the district corrupt and accused Gonzalez of stealing campaign signs. They were baseless comments, hardly noteworthy during election season.

But they sure got the water district's attention. Otay pursued legal action. Bonilla filed a complaint with the ethics board to get Shilling booted.

Bonilla didn't do that on his own dime though. The district's ratepayers paid for the agency's attorney to work on the complaint, which purported to come from the agency's board of directors. But the board hadn't agreed to send it. Bonilla told the Union-Tribune that he, Gonzalez, Watton and an attorney had decided to.

Watton said the district got involved because Shilling had noted in campaign literature that he served on the ethics board, making his criticism carry more weight.

"If someone is just out making stuff up and lying to the public, that is of interest to the district," Watton said. "We're not corrupt."

Bonilla later told the board that he'd pay for any litigation himself, according to meeting minutes. But he didn't reimburse the district for its legal expenses.

When the agency's attorney, Dan Shinoff, presented his case to the ethics board in March, he zeroed in on what he called Shilling's malicious critique of Gonzalez and Bonilla. Shinoff, who's paid $250 an hour by the district, appeared to be settling a campaign score. Talking to commissioners, he unfurled an inflated oratory filled with its own baseless accusations.

Shinoff tried to connect Shilling to an anonymous website that attacked Gonzalez. And yet Shinoff offered no proof it was Shilling's site. Shinoff said the criticism was symptomatic of the country's devolving political discourse.

"Somebody's going to be a victim if we continue this in this society," Shinoff told the board, noting the shooting rampage that had left six dead and 13 wounded in Tucson, Ariz. a few weeks earlier.

He said an ethics board member shouldn't be allowed to make such attacks — not with so much at stake. A rebuke was absolutely necessary, he said.

"I urge you with my heart and with my soul for you to do the right thing," he said. "I come from a family of concentration camp survivors. And I can tell you from a very personal perspective, permitting this sort of dialogue only leads to tragedy."

The ethics board dismissed the complaint.

♦♦♦

Customers in the Otay district often have little reason to complain.

They pay some of the county's lowest water rates. In 2009, while other water districts told customers to cut back on their consumption or face penalties, Otay didn't, saying its customers had already conserved.

But this August, customers went berserk. A standing-room-only crowd filled a mid-afternoon board meeting. They were furious about the district's push to guarantee health care coverage for all current employees after they retire.

While other water agencies and government bodies are doing the opposite, Otay was about to increase its employees' retirement benefits. The district had struggled to articulate a clear reason why.

The fight that day was between Otay leaders and the San Diego County Taxpayers Association, and it turned nasty. Just before voting, Bonilla said something that in any other district might've sounded unusual, which evoked memories of the chilling phone messages that he and other agency officials had received a decade earlier.

"You should see the emails we got, threats to our families," Bonilla told the crowd. "It was motivated by this organization."

Fixed-income retirees erupted in howls of protest, bringing the board's discussion to a halt. Retirees were already upset about the retirement benefit boost, concerned it may impact water rates increasing faster than they said they could afford. Now it appeared that Bonilla was blaming death threats on the taxpayers association. "You're going to lie! Shut up!" one bellowed.

Bonilla quickly clarified. The taxpayers association hadn't actually convinced people to threaten board members, he said. They'd just misled the public and gotten people angry.

Two months later, Bonilla cited the anonymous threats again. This time, he was writing to the taxpayers association's board, calling the group's criticism unfounded, misleading and dangerous. Two threatening emails — "You are US enemies and deserve to die," one said — were attached as evidence.

And just as Otay had done months earlier with Shilling, another public critic, the letter concluded with its own threat.

If the taxpayers association's attack continued, Bonilla wrote, the district would sue.


Otay Water District GM Defends $300K Salary
Mark Watton Would Accept Pay Cut If Board Asked
10News.com
July 22, 2011

SAN DIEGO -- One of the highest-paid public employees in California is defending his $301,000 salary as water rates continue to rise.

10News learned Mark Watton, general manager of the Otay Water District, earns more money than Gov. Jerry Brown and spends a quarter of the year on vacation.

Watton, whose agency has 51,000 customers, told 10News, "This job is just like any CEO's job. It's 24/7. I'm never away from email or the phone, and I'm always on these premises.

According to information obtained by 10News, Watton isn't exactly there every day. His lucrative ratepayer-funded salary includes 71 days of vacation. He could take every Friday of every month off and he would still have 18 days of vacation left.

"You're trying to allude or relate us to some type of criminal prosecution going on in other cities. I agree with those prosecutions, but if you want to imply that's the case here, I disagree with that," said Watton.

There are no accusations of wrongdoing at the Otay Water District, but there are questions about Watton's salary.

Watton served on the water board since 1983, at the same time he was a business owner.

"[I] had a real estate company for a while and a waste disposal company," he said.

"You go directly to your position as general manager?" asked 10News reporter Craig Fiegener.

Watton replied, "Yes. I had certificates and coursework to be successful in the endeavor I chose."

"Would you accept a pay cut to help the agency and save consumer money?" asked Fiegener.

"If the board asked me to do that I would," he said.

10News learned Watton assumed his role in 2004. He is not a specially educated business executive.

Watton's compensation came under scrutiny after the Otay Water District approved another 7.7 percent water rate increase effective next February.

Watton's next contract negotiation could happen next month and could include another raise.

San Diego Ethics Commission refuses to release information about its attorney-lobbyists or attorney who works for SEDC

“You have an excellent reputation in the community; you are an extremely careful person, and I don’t see why your answer should not be sufficient,” Commissioner and retired Judge William Howatt Jr. told Fulhorst.

The ethics of the Ethics Commission
By Dave Maass
San Diego City Beat
Oct 12, 2011

At a September meeting of the San Diego Ethics Commission, the agency’s executive director, Stacey Fulhorst, presented the mother of all catch-22s.

While inspecting lobbyist-activity records, CityBeat had learned that private attorneys retained by the Ethics Commission are also working as counsel for the Southeastern Economic Development Corporation (SEDC), a city redevelopment agency, and as lobbyists for private companies. The relationships seem to present a potential conflict of interest on multiple levels, since the commission both regulates lobbyists and enforces ethics in city government, including SEDC. Asked about this, Fulhorst said the law firm—Stutz, Artiano, Shinoff and Holtz—and the commission have put several firewalls in place.

However, since attorney-client confidentiality covers legal agreements, Fulhorst couldn’t offer proof of these safeguards without first asking the commission’s seven members to release the information.

“I would personally recommend that you do approve a waiver, a very limited waiver of just, literally, a handful of paragraphs, because I do think it’s important to demonstrate to the public that we recognize it would not be appropriate for us to receive legal services from the same law firm that was providing general counsel to SEDC on SEDC matters,” Fulhorst told commissioners on Sept. 23.

Paradoxically, Fulhorst couldn’t show the commissioners the relevant paragraphs because they’d then become public record. Nor could the commission turn to its legal counsel for advice, since the lawyers were the subject of the discussion.

The commission deliberated for 15 minutes on whether an agency that investigates conflicts of interests should be transparent regarding its own potential conflicts. Some members wondered why CityBeat wouldn’t just take Fulhorst’s word.

“You have an excellent reputation in the community; you are an extremely careful person, and I don’t see why your answer should not be sufficient,” Commissioner and retired Judge William Howatt Jr. told Fulhorst.

Some worried about setting a precedent.

“I just think we should be careful with granting such a waiver,” Commissioner Larry Westfall, an accountant, said. “Once you do it, we start to open the door for every little, two-bit newspaper in town to come here and make requests for information, too.”

Some recognized the public interest in releasing the document, but Commissioner and attorney John O’Neill alone saw that as overriding other concerns.

“I think it puts to rest any suspicion there is any impropriety here,” O’Neill said. “I don’t think it helps us to not give the document.”

The commission voted 5-1 (one member was absent) against releasing the information, rejecting Fulhorst’s offer to conduct more research on an issue that wouldn’t have come up a year ago.

With Proposition E in 2004, San Diego voters authorized the Ethics Commission to hire its own legal counsel instead of relying on the advice of the City Attorney’s office. Proponents argued it was problematic for the city attorney to represent both the commission and the city officials subject to commission investigations. They also noted that City Attorney staff are also subject to commission enforcement actions.

For the first five years, the commission employed a staff attorney, but when the lawyer departed last year, the agency decided to contract with an outside firm to allow more flexibility. The Stutz firm submitted a bid and, Fulhorst said, was selected because of the “unique expertise and knowledge” of Christina Cameron, a longtime City Hall staffer specializing in ethics and campaign reform who’d recently earned a law degree. Under the terms of the bid, Cameron would serve as a general counsel, working under the supervision of “associate general counsel” Prescilla Dugard and Leslie Devaney. All three were serving as counsel to SEDC and lobbyists, but the firm agreed that Cameron would be severed from SEDC matters and no longer register as a lobbyist.

In the first half of 2011, the Ethics Commission paid the Stutz firm $48,000 in fees, and another $3,000 to a second firm that handles cases when a conflict arises. During the same period, the Stutz firm collected at least $203,000 from SEDC. As a lobbying organization, the firm represents EverFlow Resources, Staff Pro and Western Towing.

Fulhorst, Cameron and Devaney described to CityBeat many of the physical and procedural measures in place to protect against a conflict. The firm also amended its lobbyist reports following CityBeat’s inquiry to better reflect Devaney and Dugard’s involvement with the Ethics Commission: Each provided less than an hour of legal services in the first half of the year.

Tracy Westen, CEO of the Center for Governmental Studies, a Los Angeles-based watchdog organization, says he’s less concerned with the specific SEDC issue than he is alarmed to learn that registered lobbyists are providing legal advice to lobbyist regulators.

“Ideally, if you contract for ethics advice with outside counsel, you want that outside counsel to give you independent advice,” Westen says. “But if the outside counsel is also lobbying the city, its advice may tilt in favor of lobbyists in general. Simply recusing themselves from judgments involving a client they’re lobbying for is a good idea, but it does not purge them of pro-lobbyist sentiments.”

Of the 106 complaints processed by the commission in 2010, 38 percent—the largest portion—were alleged violations of the city’s lobbying ordinance, according to the commission’s annual report.

“If a matter were heavily related to lobbying and I felt it was inappropriate to talk to [Devaney or Dugard] because they are registered lobbyists, then I have other partners and other senior attorneys that I can work with if I need to,” Cameron says.

Westen says that’s not enough. “It’s very difficult for a law firm to purge itself of this appearance of a conflict if some partners are lobbying and others are not,” Westen says. “I think the city really needs to go to a law firm that is not doing lobbying.”

Fulhorst says that’s an impractical idea coming from someone “working in academia,” since the “vast majority of law firms” in San Diego are registered as lobbyists under the city ordinance...

Tri-City Hospital probe kept secret: Does that prove there's no serious wrongdoing?

Should San Diego be called "Enron by the see-no-evil"?

Does keeping a probe secret prove that there was no serious wrongdoing? Quite the opposite, I would say.

Tri-City Hospital isn't releasing the probe conducted after CEO Art Gonzalez and eight administrators were placed on administrative leave. My guess is that the board doesn't want to go through litigation which would be expensive for the hospital. My guess is that the former employees don't want a trial, either, because the information in the secret probe would no longer be secret. Instead, both parties want to settle, keep the report secret, and preserve the reputations of both the former employees and the board members who worked with them.

Terry Francke, counsel for Californians Aware, says, "If they did find serious misconduct by these employees, then it becomes a matter of public interest" and the report must be released.

I agree, but in San Diego, wrongdoing is regularly hidden by public entities. Maybe the city should be called Enron by the see-no-evil.

How many lawyers does it take to do an ethics training? Three--Leslie Devaney, Priscilla Dugard and Christina Cameron

In the case below, three lawyers from Stutz, Artiano Shinoff & Holtz were apparently needed to give a two-hour ethics training to Murrieta officials.

But Stutz partner Daniel Shinoff has found easier methods of training public employees.

MURRIETA: Ethics training opens eyes
Attorneys from the San Diego firm Stutz, Artiano, Shinoff and Holtz held an ethics training
October 28, 2008
By NELSY RODRIGUEZ

...Attorneys from the San Diego firm Stutz, Artiano, Shinoff and Holtz held an ethics training session for elected and appointed city officials dealing in public business. Members of the City Council and six commissions reviewed issues of transparency in government, reporting personal financial interests, handling public contracts and the misuse of public funds...

"The public's expectations of you are even higher than the law," Devaney told those in attendance. "And avoiding conflicts of interest is your responsibility."

[Blogger's note: This is actually not true. The public would be delighted if officials would simply obey the law. Devaney's problem is that she and her firm have spent so many years helping public entities get away with violating the law, that she has a distorted view of what the law is. The same is true for conflicts of interest, which Ms. Devaney apparently defines as anything that conflicts with her own interests.]

With regard to public meetings, Devaney said new restrictions on serial meetings limit how much discussion of public business can be done outside of a public meeting. If one commissioner e-mails another ... with the intent of getting a consensus, those commissioners will have violated a law that prevents city business from being conducted without the public's knowledge.

[Leslie Devaney's law firm orchestrated the PALMGATE scandal at MiraCosta College.]

..."It would look wrong," said attorney Christina Cameron, regarding financial favors for public officials. "If the public read about it in the paper, they would be sure that (you were) getting a better deal."

Regarding campaign contributions, current officials and even City Council candidates were warned of accepting contributions that might later be suspected of a quid pro quo exchange.

"During the campaign season, promises are going to be problematic, (even) when there is no smoking gun," said attorney Priscilla Dugard.

Murrieta officials have not always been on the right side of conflict of interest allegations. A former city councilman who had also been mayor pleaded guilty in 2007 to criminal counts of submitting a false document and conflict of interest. Jack van Haaster, who was ousted from the City Council in a 2005 recall election, admitted to failing to declare his financial interest in a road paving project when he voted on it.

Councilman Warnie Enochs was admonished by fellow council members in 2006 for helping his son on a contracting job on which Enochs had voted in favor. While Enochs said he did not benefit financially, his colleagues said his action was inappropriate for a public official...

San Diego County Supervisor Dianne Jacob is being bullied

County Supervisor Dianne Jacob recently published an essay in Voice of San Diego. She wrote:

"I was sued by the owner of the Los Angeles Times for speaking my mind about the business practices of one his companies, ironic because people involved in journalism are usually fierce defenders of free speech. Sam Zell’s Manufactured Home Communities--now operating under the name Equity Lifestyle Properties, Inc.-- owns and operates more than 300 mobile home parks in 28 states, including four parks in the district I represent. At first, it was difficult to take Zell or his lawsuit seriously. There’s something amusing about being sued for defamation by an individual who calls himself the “grave dancer"...” I am convinced that Zell is using our judicial system to bully me and intimidate those who dare question how MHC treats its customers..."

I think too many people are terrified of being sued. Being sued is really not so bad. I should know; I'm being sued for defamation by Stutz, Artiano, Shinoff & Holtz. My friends greet me with creased foreheads and downturned mouths when they ask me how I am. I'm fine.

What is terrible is that many people are silent about wrongdoing for fear of being sued. It seems to me that some people (like the partners at Stutz Artiano Shinoff & Holtz, who are suing me in their spare time, when they are not too busy campaigning against lawsuit abuse) are trying to turn our entire society into a place where criminals rule the roost and witnesses are afraid to testify.

Elly Dotseth is concerned about Dianne Jacob and all who speak out. Elly wrote a letter to Voice of San Diego on April 16, 2008 saying:

"...people in our supposedly free country have begun to keep quiet from fear of being sued or blackballed in some other way. I have recently spoken out in criticism of the way the NTC Foundation is handling leases with nonprofit arts groups, and despite the reply from the director, I stand by my criticism. If he were to sue me, though, that would really be horrific."


Here is my response to Elly:

Kudos for standing up to the McMillin/NTC Foundation, and please be assured that it is not so bad getting sued when you have nothing to hide and the big guys that are suing you have plenty to hide. You simply file an answer, then go down to the courthouse and get a deposition subpoena that has been signed by the Clerk of the Court. Make some copies, fill them out, and serve them on the people who are suing you. They filed the lawsuit, so they had better be prepared to testify under oath and produce documents. If they fail to do so, you file a motion to compel that looks something like THIS.