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    Central Basin hired company secretly tied to general manager’s co-defendant in bribery case
    • July 10, 2023

    Central Basin Municipal Water District hired a company secretly run by employees of a construction firm that allegedly funneled $400,000 in bribes to the district’s general manager when he served as superintendent of a nearby school district, according to recently released court records.

    Now, Central Basin’s board members are weighing whether to terminate General Manager Alex Rojas or temporarily relieve him from duty in response to revelations that the water district paid roughly $790,000 to a company called Capstone Partners Group, which was owned by an employee of the man Rojas allegedly assisted in an embezzlement scheme in exchange for the bribes.

    The Los Angeles County District Attorney’s Office charged Alex Rojas and Luis Rojas — the two men are not related — in August 2022 on 18 counts, including money laundering, bribery, perjury and embezzlement. Luis Rojas runs the Del Terra Group, a Pasadena-based construction management firm with clients throughout the state.

    Prosecutors allege that, from 2015 to 2017, Luis Rojas’ sister paid more than $400,000 to a consulting firm owned by Alex Rojas while he served as superintendent in Bassett Unified School District. During that time, Alex Rojas signed off on at least $1 million payments to Del Terra for work that allegedly never occurred, according to the District Attorney’s Office.

    Both Luis and Alex Rojas have pleaded not guilty to the charges and have denied the allegations publicly. The case is still pending.

    In October, California’s Financial Crisis and Management Assistance Team, an independent state agency that reviewed Del Terra’s billings in Bassett at the county’s request, concluded there was “sufficient evidence” to demonstrate that fraud, misappropriation of funds or other illegal fiscal practices had likely occurred.

    Del Terra has faced similar allegations of impropriety in other jurisdictions, including Montebello Unified, Rio Hondo College and Alum Rock in Northern California. No one has been charged in those cases.

    Central Basin Municipal Water District is a public water wholesaler with few of its own employees. It serves nearly 2 million people from 24 cities and unincorporated areas in southeast Los Angeles County, with its boundaries stretching from La Habra Heights in the east to Carson in the west and from Signal Hill in the south to Montebello in north. The board is made up of seven members, four of whom are elected and three of whom are appointed by the agency’s customers. The state Legislature forced the appointees on the agency following a scathing state audit that found questionable contract practices in 2016.

    Capstone hired just months after Rojas

    Roughly two years before Alex Rojas was arrested, Central Basin put out to bid two bench contracts — a type of open-ended agreement for whatever work is needed in the future — for construction and project management services. Though the request for proposals originally had a Nov. 9, 2020, deadline, Rojas extended it to Nov. 16 due to an alleged lack of bidders. Capstone was formed three days before the second deadline, according to records obtained by the Southern California News Group.

    In an interview, Alex Rojas denied knowing about Capstone’s ties to Del Terra.

    “If it is true that they were full time employees, that would be a concern,” Rojas said. “We didn’t know that, we weren’t aware of that. There were never times where our projects were delayed or they were unavailable.”

    The general manager sat in on the interviews with Capstone at the time, but he stressed that he did not ask questions, or participate in the scoring, which he said was handled by Central Basin’s most senior employees.

    A staff report at the time states all four groups that submitted proposals were invited for an “interview with the General Manager and two staff members.” Rojas recommended Capstone and a second company, Cummings Management Group,, for the contract based on their “background, experience and quality of their work,” according to the report. The contract, approved by the water board in December 2020, set the minimum payment each company would make at $50,000, did not set a maximum and gave the authority for issuing new work to Rojas.

    At the time, Rojas had only been on the job for a few months and had fired most of Central Basin’s employees as part of restructuring. He leaned on his remaining employees’ expertise to vet the qualifications of the teams in the proposals, he said.

    “We had three or four projects that had been approved and no work had started on them,” Rojas said. “These projects were not initiated by me, these were legacy projects that had been started, approved, and had been floundering for some time.”

    Central Basin struggled to get bidders, even after Rojas personally approached several companies in the industry to ask if they would be interested in bidding. He did not ask Del Terra, he said, because they did not “know water.”

    Capstone rose to the top because its proposed team included some water infrastructure experts well-known in the industry, Rojas said. The team members in the proposal provided resumes listing public projects they had worked on without mentioning any current or previous employers.

    Allegations emerged in civil suit

    An attorney representing Central Basin board member Leticia Vasquez-Wilson deposed Capstone’s owner, Manuel Jaramillo, in June 2023 as part of a separate lawsuit Vasquez-Wilson filed against the district alleging Rojas retaliated against her for raising concerns about his conduct. The suit claimed Rojas limited her ability to speak at meetings and refused to provide documents she said were needed to serve the communities she represents.

    Vasquez-Wilson, who once pushed for Rojas’ hiring, alleges Rojas and his supporters on the board have turned Central Basin into a “criminal enterprise.”

    “Unfortunately, we have a board majority that hasn’t carried out their fiduciary duty to look into these very, very serious matters, including the fact Del Terra was essentially doing business and getting money out of Central Basin through this company called Capstone,” Vasquez-Wilson said.

    Despite Rojas’ arrest, she said, he still serves as the district’s treasurer and controls its finances.

    “What other public agency in the state would allow that?” she asked.

    Capstone owner’s admission

    The Southern California News Group independently reviewed a recording of the deposition for this article. Jaramillo could not be reached for comment.

    In the deposition, Jaramillo said Luis Rojas helped him form the company, though he stressed that Luis was not involved in the operation at all beyond serving as a mentor. Instead, Jaramillo — who admitted to struggling to juggle his responsibilities at Capstone and his full-time job at Del Terra — brought on Rudy Viramontes, another Del Terra employee, to help with the day-to-day workload. Jaramillo paid Del Terra directly for Viramontes’ time, he said.

    Viramontes managed the engineers and other subcontractors that were sent out to cover the various jobs requested by Central Basin, according to Jaramillo.

    Jaramillo terminated Capstone’s contract with Central Basin in August 2022 due to his concerns about an article related to Vasquez-Wilson, he testified. He could not recall the article’s contents or where it was published, according to his testimony.

    Alex Rojas and Luis Rojas were charged by the District Attorney’s Office that same month, though Jaramillo denied their arrests influenced his decision and said he has no concerns about working at Del Terra.

    Jaramillo defended his boss when the district attorney’s allegations were brought up.

    “The Luis Rojas that I know is a very good man,” Jaramillo said. “He was there for me when my oldest daughter passed away, he’s been there for hard times.”

    Jaramillo and another Del Terra employee who worked with Capstone were identified in a different criminal case against Luis Rojas. That case, filed in 2020 by the District Attorney’s Office, alleges Luis Rojas and Gustavo Camacho, a Pico Rivera councilman, conspired to commit campaign money laundering by funneling contributions through various friends and family members to a Montebello Unified School District board member’s campaign.

    The three-count criminal complaint in that case alleges contributions were made under the names of Jaramillo and Del Terra employee Jerry Quemada. During that investigation, the District Attorney’s Office stumbled on the alleged payments made to Alex Rojas, which he failed to report on his financial disclosures.

    How much they were paid

    Checks obtained through the court case showed Capstone was paid at least $790,000. Ronald Wilson, Vasquez-Wilson’s husband and attorney, alleges Capstone had another $5 million in work in its queue at the time.

    “There’s at least $792,000 that I can verify, because I have copies of the checks,” Wilson said, adding that he is still subpoenaing records to determine if other payments were made.

    Jaramillo stated in the deposition that he received almost none of the money, except for a company car — an Audi Q5 — and about $25,000 that was left over following the company’s dissolution earlier this year.

    “At the end of the day, I didn’t find it lucrative,” Jaramillo said.

    During his testimony, Jaramillo stated he was laid off from Del Terra in the spring of 2020 and created Capstone as a result. He later testified that he returned to Del Terra full-time in November 2020 and was still in that position as of the deposition on June 22.

    The Los Angeles Times interviewed Jaramillo and identified him as a Del Terra employee in an article about a school roof collapse in Lynwood Unified in July 2022, while Capstone’s contract was still active.

    Rojas denies knowing about ties

    Alex Rojas alleged he did not know Jaramillo or Viramontes worked for Del Terra. His interactions with the company were mostly with Viramontes, he said.

    “There was nothing that indicated he had another job,” Rojas said.

    Rojas referred a number of questions to his attorney, Craig Missakian, due to the pending criminal case. Missakian, who also represents Camacho in the other criminal case against Luis Rojas, acknowledged questions sent to him, but did not provide any further response.

    Board weighs Rojas’ future

    Central Basin board member Juan Garza, who joined the water district in November, pushed his colleagues to schedule a closed-session discussion about Rojas’ employment at their July 5 meeting after the deposition video began circulating around the district. The board did not take any action and continued the matter to their next meeting.

    Garza could not speak about the specifics of the discussions due to confidentiality requirements, but said his personal concerns about Capstone motivated him to make the request and that he would like to see an investigation into any payments made to that company.

    “My focus is on our agency and ensuring that our agency is not in any way negatively affected,” he said.

    Removing Rojas as general manager, or placing him on paid administrative leave, won’t be an easy feat. Not only has Central Basin’s board refused to take action against him in the past, but prior boards have imposed measures to protect his employment. Firing Rojas, even for cause, requires a third-party arbitrator to determine whether Rojas has committed “major malfeasance.” And even if he has, the district is required to give him six months to “demonstrate improvement.”

    Initiating that process requires the support of six of the seven board members.

    Rojas declined to comment on the board’s possible actions. He pointed to Central Basin’s progress over the past three years, noting the district received clean audits in the last two years and went from junk level bond ratings to AA+, one of the highest ratings.

    “We’re doing really well,” he said, “and it is unfortunate now that people are trying to make connections.”

    Related links

    Central Basin won’t take action against indicted general manager, memo states
    Local legislators reach compromise on Central Basin reform bills
    Who is Del Terra? The controversial history of the City of Industry-based company through the years
    Central Basin’s general manager allegedly took $400,000 in bribes at his previous job

    ​ Orange County Register