Public agency paid private investigators for 'opposition research' on local solar company

A public utility in Southern California paid private investigators to conduct what the agency's general manager called "opposition research" into one of its loudest critics — a local solar company that has accused the agency of possibly illegal activity.

The Imperial Irrigation District used ratepayer funds to hire the Baker Street Group, a private investigations service based in San Diego. The public agency asked Baker Street to help with an internal review of potential conflicts of interest, after The Desert Sun reported that IID had spent tens of millions of dollars on energy projects that benefited a longtime IID consultant and a former IID board member. But Baker Street's investigators also scrutinized Renova Energy, a rooftop solar company whose chief executive, Vincent Battaglia, has taken out radio and television ads criticizing IID.

At least one former Renova employee, the company's bookkeeper from 2012 to 2014, was contacted by a Baker Street investigator looking for information about Renova.

IID has paid Baker Street Group nearly $40,000 in recent months, public records show.

IID general manager Kevin Kelley defended the use of ratepayer dollars to scrutinize Renova, saying Battaglia "wasn't just a critic — he was communicating directly with our counsel and making fairly outrageous claims and allegations." Kelley also said Baker Street's work for IID was "larger than opposition research into the Renova fellow."

The public agency's "opposition research" into Battaglia follows a history of conflict between IID and Renova, which is the Coachella Valley's largest rooftop solar installer.

The rooftop solar market came to a screeching halt in Imperial County and the eastern Coachella Valley in 2016 when IID abruptly shut down a popular compensation program known as net metering. The decision infuriated local solar installers, including Renova. Battaglia urged Riverside County's board of supervisors to pass an ordinance requiring IID to bring back net metering within parts of the county, although that effort has stalled. He also paid for radio and television ads criticizing the agency for its solar policies.

More recently, IID has been dealing with the fallout from a Desert Sun investigation into potential conflicts of interest. As a result of the newspaper's reporting, the public agency has canceled $82 million worth of energy contracts. The agency also accused a former consultant, ZGlobal Inc., of helping make several contracts in which its founder and president, Ziad Alaywan, had a financial interest. ZGlobal has denied any wrongdoing but agreed to divest from four Imperial Valley solar farms as part of a legal settlement.

READ THE SERIES: Imperial Power Players: A Desert Sun investigation

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Following The Desert Sun's reporting, Battaglia launched a new round of attacks on IID. Through a nonprofit he controls, the Electric Ratepayers Alliance, he sent complaints to California's Fair Political Practices Commission, asking the commission to investigate whether the agency has violated the state's conflict-of-interest law. He also copied the FBI on a letter to IID, slamming the utility's response to The Desert Sun's reporting.

Battaglia's criticism prompted a detailed response from IID attorney Mike Aguirre, who was conducting an internal review of the possible financial conflicts uncovered by The Desert Sun. Aguirre was assisted in his internal review by the Baker Street Group.

Aguirre ultimately issued several reports, including a 14-page document in which he rejected Battaglia's accusations and detailed Battaglia's history of criticizing IID.

"Evaluating the credibility of those making accusations is a critical part of any responsible investigation, and that is all that took place," Aguirre told The Desert Sun.

But IID's scrutiny of Renova continued after Aguirre's 14-page report.

In mid-December — more than a month after the report was released — Kathy Adams, Renova's former bookkeeper, said she found a business card by her front door. It was from an investigator at the Baker Street Group, Jerry Crosby, asking her to contact him.

Adams sent Crosby an email, asking what he wanted to talk to her about. He replied that he'd been hired "to do due diligence on one of your former employers (Renova Energy)."

"My client is quickly becoming very disenchanted with your former employer," Crosby wrote in the email, a copy of which Adams provided to The Desert Sun.

Asked this week about the scope of Baker Street's research into Renova and Battaglia, Crosby said in an email that he's prohibited from discussing client matters.

RELATED: Imperial Irrigation District pays ZGlobal $2 million as part of legal settlement

Battaglia said he was "shocked to hear that (IID) would take that kind of response" to his accusations. He said responsibility lies with the agency's board of directors, saying the board members "seem to just be using money to help themselves."

"I just think its speaks volumes about where the board's head is at. It's more about protecting itself and far less about protecting the ratepayer," Battaglia said.

This wasn't the first time the Imperial Irrigation District hired Baker Street for an internal review linked to ZGlobal, the consultant at the heart of The Desert Sun's investigation.

Two years ago, IID asked the private investigations service to retroactively scrutinize a key unit within the agency's energy department, several months after Kelley, the general manager, abruptly ousted five senior engineers and replaced them with ZGlobal. The Folsom-based engineering consultant got a three-year, $9-million contract for the work.

Kelley's decision was based partly on the advice of two consultants — including ZGlobal, which had concluded that the senior engineers were "wholly incompetent."

READ MORE: Why did millions of public dollars keep flowing to ZGlobal?

The removal of the senior engineers prompted a public outcry. In response, IID hired Baker Street to retroactively investigative the work of the ousted employees. The group's investigation supported Kelley's decision, finding that "systemic flaws in transmission planning ... have placed the IID's transmission system — and the safety of its employees in the field — at risk and resulted in major expenditures on unnecessary projects," according to a memo written by the agency's general counsel in April 2016.

It's not clear how much Baker Street was paid for that investigation, but IID paid the company more than $71,000 in 2016, checks released by the agency in response to a California Public Records Act request show. Baker Street got another $7,000 from IID in the first few months of 2017, before starting its latest investigation related to ZGlobal.

The Baker Street Group gets its name from Sir Arthur Conan Doyle's Sherlock Holmes stories, in which the fictional detective lives at 221B Baker Street in London.

Sammy Roth writes about energy and the environment for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.