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How a coup in the City of Industry opened the door for a $20 million corruption scandal

First of two parts

In early 2015, members of the City of Industry’s nobility met in a vacant office building to plan a coup.

The owner of the local trash company — a former longtime mayor and kingmaker in town who had fallen from favor at City Hall — and a powerfully connected former state senator brought together a municipal government attorney and three handpicked City Council candidates to plot their moves for an upcoming election and beyond, according to interviews and court testimony.

At the same time, across more than a dozen clandestine meetings, the group drafted a rough framework in which the tiny city — already a regional economic power due to its embrace of all manner of commerce — would position itself as a major player in the state’s goal to transition solely to renewable energy.

To accomplish this lofty goal, the future council members put their faith in a previously rejected plan from Frank Hill, a former legislator-turned-convicted-felon, and William Barkett, a developer with $50 million in debts and no experience in the renewable energy industry to his name. The two men had long-gestating ambitions to turn an undeveloped ranch land retreat purchased by the city decades earlier into a massive solar array that would allow Industry to offload excess power at a premium.

They just needed a new administration willing to foot the bill.

Hill and Barkett had gained some traction when David Perez, the waste collection magnate who organized the clandestine meetings years later, was still the city’s mayor. But after Perez stepped down in 2012, City Manager Kevin Radecki and City Attorney Michele Vadon, the two administrators in the coup’s cross hairs, shut the idea down after running a background check on Barkett and determining the promised returns were unrealistic.

The City of Industry City Council, seven months after a bitter election, closes a meeting on Jan. 28, 2016.  (Photo by Sarah Reingewirtz/Pasadena Star-News)

A successful coup

In June 2015, Hill and Barkett’s proposal for a solar farm on the so-called Tres Hermanos Ranch would get a second chance. The council slate that Hill and Perez brought together — Mark Radecki, Cory Moss and Newell Ruggles — swept a bitter election, one of the only six contested races since Industry’s incorporation in 1954.

Industry was under significant pressure from the county and the state to institute reforms in light of a report that detailed $326 million in payments to the Perez family’s businesses over a two-decade period and a state controller’s audit that found major deficiencies in the way the city awarded public contracts.

The new council pledged to make sweeping changes — and in many cases did — though the solar project was seemingly exempted from such scrutiny. The project was voted on in secret, never put out to bid and resulted in $20 million flowing with little oversight to an unqualified developer with a troubled history.

Interviews, testimony and court records over the last seven years indicate Hill, in particular, wielded considerable influence in the early days following the 2015 election, though he had no official title and wasn’t paid by the city.

Yet, the former state senator negotiated severances, interviewed new employees and acted as an unofficial lobbyist for the city, intercepting concerned officials from the neighboring cities and the state when questions arose about Industry’s secretive plans for the ranch land known as Tres Hermanos. The city entered into a lease agreement with San Gabriel Valley Water and Power, a company that Hill partially owned, to develop the solar project within the first year.

Though the council members maintain they always acted independently, those preelection discussions in the defunct offices of Valley Vista Services nevertheless sold the newly elected officials on Industry’s green future and cemented Hill as a trusted adviser.

‘He was running the city’

“He kind of took over everything,” Councilman Ruggles said in a 2019 interview. “He was running the city behind the scenes.”

Moss alleged Hill frequently met with council members in pairs, or alone in those early years. She suspects Hill used the fledgling council’s naivety to intentionally filter the information presented to them before their votes.

“We were given specific and limited information on certain issues, and, in retrospect, I feel that it was because Frank Hill wanted to control the outcome of those decisions,” Moss said. “As a new council member, I didn’t really understand what questions to ask, or who to go to for more information.”

The Los Angeles County District Attorney’s Office charged Hill, Barkett, former City Manager Paul Philips and attorney Anthony Bouza in 2021 under a similar premise. Investigators allege the men took part in an uncharged “conspiracy” to defraud the city of up to $20 million in taxpayer funds.

Hill is charged with two counts of conflict of interest and one count of misuse of public funds. All four have pleaded not guilty. Hill, Barkett, and Bouza are scheduled to appear in court May 10. A preliminary hearing for Philips is underway.

A key component in the criminal case is the allegation that the solar project was rigged in the developer’s favor from the start. The new administration, with Hill guiding them, cleaned house and began to replace key positions with individuals recommended by Hill.

Vadon and Kevin Radecki, the brother of Mark, were the first to go in a bloodletting that removed nearly every person who had opposed Perez and the earlier renditions of the solar proposal, including the longtime city engineer and an energy consultant whose continued warnings about the project’s feasibility were ultimately ignored. Hill is alleged to have recommended each of their replacements.

The new City Council’s first pick for city manager, Frank Tripepi, allegedly turned down the offer because of Hill, according to Ruggles’ interview with the D.A.’s investigators.

“The reason he didn’t take the job is because Frank Hill wanted to call all the shots in the city and Frank (Tripepi) didn’t want to do that,” Ruggles said in a recording of the interview played in court.

The prior City Council had tried to prevent a mass firing by passing an ordinance that prevented the removal of the city manager, city attorney, city clerk and city treasurer within 180 days of an election. But the coup had successfully passed a referendum — drafted by the municipal attorney, Jamie Casso, who would eventually replace Vadon — that removed the protection from the city attorney’s position.

Casso, who is still Industry’s city attorney, was later removed as the general counsel for Industry’s public utility and replaced with Bouza, an attorney owed $1.5 million by Barkett. Hill delivered the news, according to Casso’s testimony in the criminal case.

“Jamie, you know we love you,” Hill allegedly told Casso. “But another attorney is going to come in and handle the work on the solar project.”

Kevin Radecki resigned quietly in 2015 with a severance package that kept him on the payroll for the next year. He attributed his ouster to retaliation for ending a lucrative maintenance contract with one of Perez’s companies and for his attempts to publicly challenge the family’s invoices to the city.

Kevin Radecki never questioned why Hill handled the severance negotiations, according to a March 2018 deposition from Kevin Radecki.

“Because I knew how it worked,” he said.

In the testimony, Radecki referred to Hill as “Dave Perez’s right-hand man” and alleged the two men ran the city “as much as they could possibly do that.”

Friendship dates back decades

Hill was hardly a stranger in Industry, but it was his friendship with Perez that ingratiated him to the new City Council. Though it has nearly a billion dollars in the bank, Industry is, at its heart, a small town, and Perez was practically royalty. Though he only served as mayor from 2001 to 2012, city staff and other elected officials still refer to him as “Mayor Dave.”

Depending on who you ask, Perez was either a puppet master, pulling the strings of the city’s leadership for decades, or simply a well-respected businessman and politician committed to seeing Industry — and his companies symbiotically tied to it — flourish. Perez was investigated by the Los Angeles County District Attorney’s Office on multiple occasions for potential conflicts of interest and cleared each time, but allegations around his power in Industry persisted until his death in 2020.

The following year, city officials renamed the street where City Hall is located to “Mayor Dave Way.”

Hill and Perez’s friendship dated back to the 1980s, when Hill was a legislator for the area. In 1991, Hill authored a law that exempted Industry from state affordable housing requirements in exchange for the city paying into a county-run fund that would build such housing elsewhere. The law kept Industry’s housing stock low and prevented an influx of new voters.

Hill was sentenced to 46 months in federal prison in 1994 for taking a bribe from an undercover FBI agent posing as the representative of a fake shrimping company. The conviction, which some perceived as overzealous prosecution, did little to hinder his political connections in Los Angeles County.

Hill found work as a consultant in Industry after his release. Perez later even personally arranged for Hill to receive a separate consulting gig with the Industry Manufacturers’ Council, the city’s de facto chamber of commerce, that paid Hill more than its own executive director, according to public records and interviews.

Kevin Radecki ended Hill’s consulting work with Industry after Perez left office in 2012. Perez later hired Hill as a consultant for his companies, according to court testimony.

Hill and Perez reportedly met for drinks every Monday, according to testimony by Curtis Fresch, who was placed in charge of Industry’s redevelopment properties under the Perez-backed administration and later served as interim public utilities director as the solar project picked up steam.

“That’s when they were trying to figure out who was going to be on the council next,” Fresch said of the 2014 meetings he attended.

Industry, under the new council in 2015, almost immediately backed away from a series of lawsuits brought forward by Vadon that challenged the Perez family’s business ties to the city. The council also publicly denigrated a report alleging those same businesses had profited for two decades off the family’s political influence. The new council sued Vadon’s firm, alleging she had released the information in an attempt to influence the election.

How Hill gained power

Following the election, Hill became a gatekeeper for Industry’s new council. When Diamond Bar and Chino Hills, the two cities with jurisdiction over the Tres Hermanos Ranch, began to question what Industry planned for the land, their city managers received calls from Hill before anyone else.

When former state Sen. Ed Hernandez threatened to dismantle the city through legislation if its leaders didn’t shape up, Hill reached out to him first to try to find a compromise. The city and Hernandez later agreed to the hiring of former Attorney General William Lockyer to monitor the city’s reforms.

“Frank Hill consistently was a peacemaker among the council members and community folks,” Lockyer explained in a 2019 interview, adding that Hill “smoothed over ruffled feathers.”

Tony Rackauckas, the former Orange County district attorney serving as Hill’s attorney in the criminal case, alleges that Hill was brought in by Perez prior to the election to advise the group on possible reforms and alleges, like Lockyer, that Hill’s eventual ouster related to housing. Rackauckas acknowledges that Hill served as an adviser to the City Council, while owning a stake in the solar project’s development company.

“I can tell you that Frank — he was advising Mayor Dave for the benefit of the city, and he always worked toward what he believed was to the benefit of the city,” Rackauckas said. “If he could make some money on it, great. He never hid from anybody that he intended to share in the profits.”

Hill did not receive or manage any of the $20 million paid out by the city to the developer, San Gabriel Valley Water and Power, and was not aware of the discrepancies in billings that now form the backbone of the criminal case, Rackauckas argued.

A company Hill set up, Mojave Green Power LLC, owned a 50% stake in San Gabriel Valley Water and Power, the development company managed by Barkett. At the same time, he made nearly $700,000 as a consultant to the Cordoba Corp., a company hired by Industry to serve as its engineering department and as the project manager on the Tres Hermanos proposal.

Hill and Cordoba’s relationship predated the 2015 election, according to Hill. Council members now allege they did not know Hill worked at Cordoba or that he owned part of SGVWP.

Hill believed his actions were legal based on his interpretation of law at the time. California’s conflict-of-interest law initially applied to public “officers” and “employees” until a California Supreme Court decision in 2017 interpreted the statute more broadly to include other roles, such as consultants and advisers, Rackauckas said.

Hill continued to work on the solar project until early 2018, when a new council majority began to question his influence and the project’s billings.

When that happened, the house of cards upon which the project was built began to collapse.

Next: City officials put a dagger through the heart of the Tres Hermanos solar project.

Source: Orange County Register

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