With the Los Angeles Department of Water and Power (DWP) settling a suit last year for over-billing customers $44 million due to shoddy work by Pricewaterhouse Coopers implementing a billing system, the L.A. City Attorney has now alleged that the prestigious firm accounting also fraudulently billed DWP to pay for hookers at swanky bachelor parties at Vegas hotels.
Senior consulting management at Pricewaterhouse Coopers (PWC) is alleged to have botched a 2014 installation of a new DWP billing system that inflated 1.6 million monthly bills for customers in the cities of Los Angeles, LADWP, Bishop, Culver City, South Pasadena and West Hollywood areas by $44 million.
According to DWP Chief Administrative Officer David Wright, the nation’s largest utility is prepared to settle a class-action lawsuit from aggrieved customers. The public power authority claims it has already refunded and credited some of the money, but still owes rate-payers about $36 million.
Wright believes that although the vast majority of the billing credits and refunds have only been around $10 or less, DWP will make all customers whole, no matter how small the amount or if customers know they were over-billed.
The class-action settlement also requires DWP to spend $20 million to overhaul the billing system and appoint an outside ombudsman to monitor its progress. Depositions in the lawsuit found that DWP was aware that customers who called DWP about over-billing were often put in hold “queues” for a half-hour or more.
Cleveland-based class-action attorney Jack Landskroner, who represented large numbers of Los Angeles customers and is expected to be awarded a big piece of the $13 million in attorneys’ fees in connection with the four lawsuits, commented that the DWP settlement is “a home run,” adding, “It’s not often you get 100% recovery for customers.”
Landskroner snarled that DWP admitted responsibility for bank charges and overdraft fees that resulted when payments for excessive bills were automatically drawn on customer accounts. Landskroner encouraged customers to submit claims for full reimbursement that could push the cost to DWP much higher.
The over-billing charges also highlighted lucrative DWP union contracts, with terms for employees far more generous than comparable jobs elsewhere.
Moreover, what was first thought to be a lawsuit over PWC incompetence’s in misrepresenting its capability to implement the supposedly state-of–the-arts billing system has also now metastasized into a full scandal for prestigious accounting and consulting firm.
According to Superior Court filings from the L.A. Attorney’s Office, PWC also billed for bogus work never performed to cover the cost for prostitutes, lavish hotel suites and liquor for at two bachelor parties.
PricewaterhouseCoopers has said the DWP allegations have no merit and contends it is being scapegoated by the utility trying to shift blame for its own business practices.