Central Basin Municipal Water District is a public agency that purchases imported water from the Metropolitan Water District of Southern California and wholesales the imported water to cities, mutual water companies, investor-owned utilities and private companies in southeast Los Angeles County. There are 24 cities in Central Basin’s service area. The company is headquartered in Commerce California. The politically explosive District appears to be within a few days of financial armageddon after the agency was officially put on notice that its public insurance carrier is dropping them as a client.

According to the report by Hews Media Group-Community Newspaper, the Association of California Water Agencies and the Joint Powers Insurance Authority (ACWA-JPIA) officially informed Central Basin officials that their insurance coverage has been discontinued citing the “workings of a dysfunctional Board of Directors.” The District claims it is now “proactively reviewing all its available insurance options and alternative providers, in light of a pending decision by ACWA-JPIA regarding the District’s future relationship with the insurance provider.

During the past year, HMG-CN has published dozens of exclusive investigative reports documenting deep legal problems allegedly caused by Directors Robert Apodaca, James Roybal and Leticia Vasquez that could be the reasons for JPIA dropping the agency. HMG-CN disclosed the details of a sordid sexual harassment complaint lodged by a female employee against Apodaca;The newspaper has learned that the alleged victim in the case could be handed a high seven-figure settlement. Sources also tell HMG-CN that other females may be in the process of coming forward to file additional cases of sexual harassment activities against Apodaca.

HMG-CN also was the first news outlet to confirm and disclose the details of Director Leticia Vasquez’ filing of a highly controversial whistleblower lawsuit against her own agency. Vasquez, who denied she would be filing the lawsuit until it was revealed by HMG-CN, claims to have been “victimized” by many parties, individuals and law firms who have banked millions in questionable contracts with the agency during the past decade. Vasquez’s lawsuit also goes after her top political alley and heavy campaign contributor Ernest “Ernie” Camacho who is the owner of Pacifica Services. It also cited the Calderons, and other companies. Camacho and his company have banked millions in exclusive contracts with Central Basin.

Vasquez staged a bizarre press conference two weeks ago where she demanded that another director, Art Chacon resign his seat after it was learned that he had been involved in one accident while performing district business. The accident is in litigation, JPIA is fighting the fact that Chacon was working despite multiple sources coming forward to HMG-CN saying he was working, and is set for arbitration August of this year.

Former Central Basin District executive Ron Beilke also filed a complaint alleging wrongfully termination, retaliation, and harassment during his short tenure at the agency. Beilke confirmed to HMG-CN that he is plans to file a seven-figure lawsuit and plans to name Roybal, Apodaca and Vasquez individually in the complaint.

Phil Hawkins, who recently took over as President of the Board of Directors after Roybal was removed with the support of Apodaca and Chacon also chimed in on the current insurance crisis. “This District is hanging on by a thread and our General Manager and staff has done amazing things to right this ship. Our General Manager (Perez) just completed the biggest water sale in our District’s history and has aggressively been identifying potential long term recycled water customers, but somehow our Board continues to drag this agency through the mud,” said Hawkins a former state assemblyman from Cerritos. “What I will say to this Board is that the cancellation of our insurance is the ultimate wake-up call. Let’s settle down, let staff do their jobs and try to remember that it’s not about us, it’s about our 2 million customers,” Hawkins continued.

The agency is also being investigated by the Federal Bureau of Investigation, the Los Angeles County District Attorney’s Office, the Internal Revenue Service and the United States Attorney’s Office in connection with a case involving current State Senator Ronald Calderon and former Assemblyman Thomas Calderon.