MWD Chairman's $15,000 Oversight

This article was first posted February 12, 2012

John Earl

Surf City Voice

Lately, southern California’s top water official, John V. Foley, has been explaining his apparent violations of a state law that requires public officials to disclose their economic interests.

Foley is chairman of the Metropolitan Water District of Southern California (MWD).

The Surf City Voice recently reported that Foley, who was appointed to the MWD by the Municipal Water District of Orange County (MWDOC), failed to report an estimated $248,000 of income that his wife, Mary Jane Foley, earned as a consultant for various water agencies in Los Angeles, Orange and San Diego counties, going back to 2004. That disclosure came from public records obtained by the Voice.

Now, more public records obtained since then reveal that Foley also failed to report over $15,000 of his own income as a private consultant for the Moulton Niguel Water District (Moulton) in south Orange County going back to late 2008.

His failure to report that income was “an oversight,” Foley told the Voice.

The newly obtained documents include the invoices that Foley filed at Moulton when he worked as a private consultant for that agency under a contract (also obtained by the Voice) that is still open. But he did not report that income on the original financial disclosure (700) forms he filed with the MWD nor in amended versions that followed, records show.

Explanations

Foley, who originally told the Voice that he wasn’t aware that he had to report his wife’s income, had subsequently included it in the amended 700 forms, filed in October.

More recently, however, he told the Voice that he had made the amendments, not because he believed he was required to do so by law but to put the matter to rest by presenting the appearance of transparency and “to be extra safe.”

Based on his claim that his wife’s income was kept separate from his, Foley said that, “I really to this moment think that I don’t have to report it.”

Contrary to Foley’s interpretation, however, the law (Political Reform Act) doesn’t allow for the exemption that he is claiming unless there is a valid prenuptial or postnuptial agreement between spouses, something that Foley says he never had.

Consulting check for Chairman John V. Foley: Click for enlarged view.

When asked why he didn’t report the $15,000, Foley claimed that he was exempt from reporting it because each of the 24 invoices was for less than $500.00. “I think you have to make more than that in the individual voucher [invoice],” he told the Voice. “That’s my understanding.”

When it was pointed out that many of the invoices, fifteen of them to be exact, were for $500 or more, Foley acknowledged an error. “Oh – You know what? It’s an oversight. I don’t recall.”

But, once again, Foley’s interpretation of the law is mistaken. All income must be reported for the previous year – there is no threshold. That much is clear on the 700 forms, where the reporting categories go from $0.00 – $499.00 and up.

Contracts

The Moulton contract stipulates that Foley will attend meetings “for the purpose of developing, implementing and monitoring projects … and evaluating information and water industry issues of concern” to the agency.

Foley also will review the “projects and information, and contracts and documents for those projects, on a periodic basis for this purpose, and advise and recommend project development and implementation measures” for the agency, the contract states.

Foley’s consulting pay is $125 per hour, not to exceed 30 hours a month, according to his contract. He could have made up to $45,000 per year but made far less than that: $1,642 in late 2008, $4,945 in 2009, $5,535 in 2010 and $2,952 in 2011.

At least half of Foley’s consulting income from Moulton was for work related to ocean desalination, including the proposed Dana Point and Poseidon Resources Inc (Huntington Beach) desalination projects, the invoices show. By comparison, his wife’s consulting work during the same period concerned regulatory and permitting issues for the Dana Point project and ocean desalination in general, according to her invoices also obtained by the Voice.

Moulton is one of five south Orange County water agencies that are actively participating in the development of the Dana Point desalination project, which will produce 15,000 acre-feet of drinking water a year if it is built.

Moulton also had a memo of understanding to buy 4,000 acre-feet of water each year from Poseidon. That MOU expired in June, 2011, but MWDOC General Manager Kevin Hunt expects all of the 19 Orange County agencies and cities that previously signed it to renew their pledges.

Strong Influence

Foley was appointed to the MWD by MWDOC in 1989. MWD board members elected him as their chairman in the 90s and again starting in 2011. He also was employed by Moulton as its general manager from 1979 until late 2007 – working at multiple water agencies simultaneously is not uncommon among water officials.

Oddly, MWDOC’s board members don’t consider Foley to be their employee, even though they pay his wages and can fire him at any time at will.

Nor is he treated as an independent contractor or a consultant, even though he regularly advises the board on water issues and votes on behalf of MWDOC’s constituents—who never actually voted for him as their representative—at MWD meetings.

Instead, Foley is considered a “public official” for the MWD, whose board elected him its chairman and represents 19 million constituents – none of whom voted for him – living across southern California, including Ventura County, the Inland Empire, Orange County and San Diego County.

Delivering 1.6 million gallons of water to those constituents in 26 cities and smaller member agencies—including MWDOC (which, in turn, supplies water from MWD to 28 water agencies and cities in Orange County) gives the MWD and its chairman considerable political clout.

As chairman, Foley appoints all members of all standing committees as well as chair persons for special committees. Prior to becoming chairman in 2011 Foley headed the Special Committee on Desalination and Recycling from 2009 through 2010. He also votes on desalination issues before the MWD board and regularly opines on the topic at MWD and MWDOC meetings.

Making Amends

Foley also omitted his wife’s income on 700 forms that he filed with Moulton as its general manager going back to at least 2004. Nor did he report his wife’s income on 700 forms he filed with the Santiago Aqueduct Commission and the San Juan Basin Authority for 2006 -2008 as an appointed representative of Moulton Water. He had not amended those financial disclosure statements as of Tuesday, Feb. 7, according to public records.

Asked if he would amend his MWD financial disclosure forms to correct his $15,000 “oversight,” Foley replied, “Now that you bring it up, I probably should.”

But Foley says that there are much more important topics to pay attention to, such as the Bay Delta and the need to “stay ahead” in order to provide the best water quality to over 19 million people in MWD’s service area.

“It’s what I worry about more than anything else,” he said.