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Central Basin Water customers pick up tab for board member's car accident

Central Basin Municipal Water District ratepayers are footing the bill to the tune of $79,000 to pay claims arising from a 2010 six-car automobile accident involving board member Art Chacon, despite a finding that Chacon was not working at the time of the accident and was at fault, according to insurance and other records.

The accident occurred around 5:40 p.m. on a Thursday in November 2010. Chacon was driving a Nissan Frontier home southbound in the usual rush hour traffic on the 710 freeway.

According to a report by the California Highway Patrol, Chacon was using a cellphone and driving at an unsafe speed. The resulting six-car pileup was so bad, the CHP shut down three lanes of traffic near the 710 and 105 interchange so ambulances could get in.

Although Central Basin's insurance authority determined Chacon was off the clock at the time of the crash, records show the water district has paid out $16,000 to settle a claim related to damages and injuries.

RELATED: What happened to the $2.7m in a Central Basin trust fund?

Chacon has also received $63,000 in state workers compensation payments for injuries he said he suffered during the crash, records show.

When asked by KPCC on Feb. 24th about the car accident, Chacon refused to comment and drove off in a black Mercedes.

Chacon previously told state officials that he was on duty at the time of the crash. In confidential records obtained by KPCC, he said a Montebello commissioner had asked him to inspect the condition of a road near a Central Basin construction site, and he was on his way home from there when the accident occurred.

Two other Central Basin board members who spoke to KPCC - Leticia Vasquez and Jim Roybal - said they have never inspected potholes or roads as part of their responsibilities as board members.

"We set policy. We are not technical people who inspect pipes or roads or anything," Roybal said, adding that Chacon’s story "seems far fetched" and "rather dubious."

Three drivers who were hurt in the crash sued Chacon and his brother, Hector, whose car Art was driving.  Neither brother had insurance, according to court documents filed by Infinity Insurance, which represented two of the drivers in one case.

A court awarded Infinity and Wawanesa Insurance, which represented the third driver, a total of $30,000.

After Art Chacon was ordered to pay the judgments, the Association for California Water Agencies Joint Powers Insurance Authority (ACWA/JPIA), the public agency responsible for paying Central Basin’s claims, was asked to pay the judgments.

"It was the first time in 30 years I’ve been asked to indemnify a person after they’ve received two judgments against them," said ACWA/JPIA attorney Robert Gokoo, an attorney with the insurance authority.

Refused to pay

After reviewing the case, ACWA/JPIA denied the claim; it concluded that the road inspection had nothing to do with Chacon’s duties as a Central Basin board member, calling it "personal" and "discretionary." 

"Director Chacon acknowledged his total lack of education, experience and training in the construction industry," the rejection letter said, adding, "His ability to determine whether there was any problem with the asphalt, as reported by the commissioner, is limited to that of a lay person."

Central Basin kept up its efforts on Chacon's behalf. 

In November 2012, Central Basin hired the Sedgwick law firm to deal with Chacon’s case, according to billing records obtained by KPCC. The firm has billed about $13,000 for its work on the matter. 

Last September, the insurance authority again rejected the Chacon claim.

But Central Basin and Sedgwick aren't giving up.

In a Jan. 20, 2014 confidential letter to Central Basin General Manager Tony Perez obtained by KPCC, Sedgwick attorney Curtis Parvin reiterated the firm’s opinion that Chacon was acting "in the course and scope of his employment" when he inspected the road.

And two weeks ago, Perez agreed to have Central Basin pay $16,000 to settle one of the two judgments against Chacon, according to his spokesman, Joseph Legaspi.  Central Basin intends to ask the insurance authority for reimbursement at an August court hearing, he added. 

Perez decided to approve the payment because it is "our duty to...defend" board members "to the best of our ability" while Central Basin appeals ACWA/JPIA's rejection of Chacon's claim, said Legaspi.

It is unclear who approved Chacon's workers' compensation claim; attempts to reach the officials at ACWA/JPIA handling that case were unsuccessful. 

Former Central Basin General Manager Art Aguilar dealt another blow to Chacon's story during a November 2013 deposition on an unrelated matter. Aguilar said that, to his knowledge, Chacon was not on agency business at the time of the car accident. When asked if Chacon had asked him to back his story about being on Central Basin business, Aguilar said, "yes."

"This entire narrative raises a number of questions as to what was really happening as to the car accident that took place and whether Director Chacon should’ve been reimbursed and whether he should’ve been able to get worker’s compensation," said Loyola Law School Professor Jessica Levinson.

Central Basin board members Vasquez and Roybal said they were unaware of the lawsuit payout and Chacon's workers' compensation payment until KPCC informed them. Both said the board had not taken up either matter. Roybal said the lawsuit settlement should have come before the board.

Of the remaining board members, Phil Hawkins refused comment, and Bob Apodaca was unavailable.

The questions surrounding the handling of Chacon's accident are just the latest trouble for Central Basin, which serves more than 2 million customers in 24 southeast L.A. cities. The agency is also the subject of an FBI investigation into its handling of a $2.7 million trust fund

A car allowance but no license

Meanwhile, as Central Basin deals with the fallout from his accident, Chacon continues to receive a $590 monthly car allowance, even though as of last Friday, DMV records show he does not have a valid driver’s license. Chacon's license has been suspended numerous times since 2011, according to the records.

According to Central Basin’s Code of Conduct, board members must have a valid driver’s license and insurance in order to travel by private car while on district business.

"It is a somewhat of a sticky situation for the Central Basin to be paying for a car allowance for someone who shouldn’t be driving a car," said Loyola Law School’s Levinson.