FBI: Former City Attorney Mike Feuer Aided and Abetted Extortion, Lied to Investigators & Obstructed Justice, Says Consumer Watchdog

LOS ANGELES, May 16, 2024 /PRNewswire/ -- The FBI believed former City Attorney Mike Feuer lied to government investigators when he denied knowledge of a hush money payment to conceal a litigation scandal in his office five years ago, as well as other aspects of the collusive litigation, according to newly unsealed documents.

Consumer Watchdog and the Los Angeles Times sought to unseal the documents, totaling over 1,400 pages, in a legal action filed in February.

The new details, part of a trove of approximately 33 warrants turned over by the Department of Justice as part of their now closed criminal investigation into the City Attorney's Office and the Los Angeles Department of Water and Power, contradict what Feuer, a former Democratic candidate for Los Angeles Mayor and U.S. Congress, has said publicly about his role in the matter that prosecuted one of his top officials, sent three others to prison, and has cost the city hundreds of millions of dollars.

The evidence uncovered by the FBI suggests:

• Feuer not only knew about the collusive nature of the 2015 Jones v. City of Los Angeles billing lawsuit earlier than he maintained he did, but he also knew about and directed an extortion payment to conceal it. Pages 750, 769
   
• Feuer made false or misleading statements to government investigators about his knowledge of the payment as well as his knowledge of the collusive lawsuit. Page 1161
   
• Feuer directed the City Attorney's office to withhold documents from a California court that would have revealed the collusive nature of the Jones litigation. Page 799
   
• Feuer gave false or misleading testimony in a civil deposition and lied to the FBI about the timeline of when he knew about the collusive nature of the Jones lawsuit. Page 804
   
• Feuer was in the room during the December 1, 2017 discussion of the extortion payment, in which Feuer "impliedly directed" one of his top officials to ensure the payment demand was "confidentially settle[d]". Page 769

Feuer previously called such accusations "absurd" and "malicious."

He told the Los Angeles Times in 2023: "I never attended any meeting in which there was discussion of an extortion threat to reveal collusive litigation in the DWP matter."

In 2022, he told KNBC: "That allegation has no merit to it. It is from a confessed felon. I've never been involved in any such discussion."

Feuer also said multiple times over the years that he was not aware of his attorneys bringing a collusive lawsuit against the city as part of a sue-and-settle scheme to get rid of multiple lawsuits it was facing due to a botched LADWP billing malfunction.

"No one in the city attorney's office had any involvement, or awareness, of any such plan," a spokesman for the office said when the scandal broke in 2019. 

But in an affidavit supporting a search warrant application in 2020, FBI Agent Andy Civetti said, "there is probable cause to believe that Feuer made false or misleading statements to the investigation team REDACTED wherein he denied knowledge of any hush money payment to conceal his office's litigation practices as well as knowledge of specific other details about the collusive litigation."

"The government documents show that Feuer lied early and lied often," said Consumer Watchdog Litigation Director Jerry Flanagan. "The government documents paint a disturbing picture of Feuer conspiring to obstruct justice and ordering an extortion payment to cover up illegal and unethical activity in order to protect his political career. The only question now is: why hasn't he been disbarred and why isn't he in jail?"

The California State Bar is investigating Feuer and other lawyers involved in the scandal. Consumer Watchdog urged the State Bar to ensure Feuer does not practice law in California again and for state law enforcement officials to bring criminal charges including perjury, which carries a penalty of four years in state prison.

The FBI documents answer another long-running question: Feuer was in the room when the extortion payment was discussed and approved it.

"Peters proffered that on Friday, December 1, 2017, Peters participated in a scheduled meeting with Feuer, [Chief of staff Leela] Kapur, and [Joseph] Brajevich (called in) to provide an update on the Salgueiro situation," according to the warrant.

Julissa Salgueiro, a former employee of then-Special Counsel Paul Kiesel, demanded $800,000 in exchange for not going public with information that would reveal the collusive nature of a lawsuit against the city.

"Feuer stated that Kiesel needed to do whatever needed to be done to take care of the situation," according to the documents.

"The evidence provides probable cause to believe that at Feuer's direction, [Chief of Civil Litigation Thomas] Peters ordered Kiesel to confidentially settle Salgueiro's demands or face termination of his Special Counsel contract," according to the warrant materials. "Peters informed the government that he advised Feuer of Salgueiro's threats and demands, ordered Kiesel to buy Salgueiro's silence in accordance with Feuer's perceived direction, and apprised Feuer after the hush-money settlement that the matter had been taken care of."

The documents also detailed Feuer's reaction to the specter of the collusion being made public.

"Feuer's reaction was like nothing Peters had seen before," according to the warrant materials. "Feuer was highly emotional and visibly upset, covering his face with his hands for a long period. Feuer repeated multiple times that this 'can't be so.' Feuer stated that this would be 'catastrophic,' which Peters understood to reference the anticipated effect that disclosure of these facts would have on the Jones settlement and the reputation of Feuer's office."

After the eventual payment was made, the corruption scandal was buried for another year.

The documents, based on phone and email records, audio records, and statements by Paradis and Peters, indicate that Feuer knew more than he let on publicly regarding the scandal in his office, managing it behind the scenes while seeking to distance himself from it to avoid any political fallout.

"Multiple sources of evidence provide probable cause to believe that Feuer obstructed justice, made materially misleading statements to the FBI, relating to the timing of Feuer's knowledge that his Special Counsel (Paul Paradis and Kiesel) had collaborated with opposing counsel in a collusive lawsuit that allowed the city to settle multiple class actions on the city's preferred terms," wrote the agent.

Despite this, Feuer furnished a letter from the Department of Justice stating he was no longer a target of government prosecutors. The FBI said Feuer drafted a plan envisioning his way out of the scandal in 2019, including his hopes of obtaining such a letter stating no one in his office was the target of the Department of Justice's investigation.

Obstructing justice carries a penalty of up to five years in prison. Aiding and abetting extortion carries a penalty of up to 20 years in prison.

The U.S. Attorney's Office has closed its investigation without bringing any charges against Feuer or any other senior members it said directed the collusive litigation and hush payment.

"It's inexplicable that the federal prosecutors did not bring charges against Feuer," Flanagan said.

The documents were ordered to be made public by U.S. District Judge Stanley Blumenfeld following redactions to any grand jury references, and personal or medical information.

In his final order, Blumenfeld said:

"Public confidence in government—which lies at the core of a well functioning democracy—is shaken, if not shattered, when public officials and those operating on their behalf engage in criminal or unethical conduct. The nature and scope of misconduct in this case, resulting in convictions of high-level public officials at two municipal agencies, raise serious questions about a culture of corruption."

Tim Blood of the law firm Blood, Hurst, O'Reardon LLP—who, like Consumer Watchdog, has been a key figure in exposing the scandal since 2014—and open records expert Kelly Aviles joined lawyers for Consumer Watchdog in prosecuting the legal action to unseal the FBI warrants.

SOURCE Consumer Watchdog