The law firm of former state Attorney General William Lockyer will pay $350,000 to the City of Industry to settle allegations that Lockyer breached his contract while serving as the city’s reform adviser during a period in which a developer who had donated heavily to Lockyer’s political campaigns in the past allegedly stole millions from a city-backed solar project.

The settlement is the equivalent of paying back roughly two-thirds of the $533,418 paid to Lockyer for his 20-month tenure as watchdog.

Neither Lockyer nor City Attorney Jamie Casso would comment on the settlement. A clause in the agreement prevents either side from discussing it with the media.

The city declined to release a November 2021 letter outlining its allegations against Lockyer, but a staff report states the dispute between the city and Lockyer’s firm, Brown Rudnick LLP, was “particularly with respect to the Tres Hermanos solar project” that is now the subject of a civil lawsuit by Industry against the developers and an ongoing criminal case.

The settlement agreement indicates the city alleged Lockyer and Brown Rudnick are liable for “alleged breaches” of their professional services agreement and “other statutory and common law claims” connected to the agreement.

Industry ultimately paid $20 million toward the solar project, which never broke ground, and later learned that many of the invoices submitted by the developer for reimbursement were allegedly fraudulent. Lockyer served as reform adviser from the start of the project in May 2016 until he was fired in January 2018.

California state Attorney General William Lockyer answers questions outside of the 9th U.S. Circuit Court of Appeals building on Sept. 22, 2003, in San Francisco. (Photo by David Paul Morris/Getty Images)

The Los Angeles County District Attorney’s Office has filed charges against developer William Barkett, former state Sen. Frank Hill, former Industry City Manager Paul Philips and attorney Anthony Bouza in connection with the embezzlement scandal. Barkett is alleged to have used more than $8 million of the funds on personal items, including a lavish wedding for his daughter in the French Riviera. Court testimony and interviews indicate the project was pushed forward because of Hill’s close ties to the newly elected City Council.

Lockyer was not named as a defendant in either the civil or criminal cases. As part of the settlement, Industry and Brown Rudnick agreed to mutually release each other from any claims related to Lockyer’s work in the city, Tres Hermanos, the four defendants in the criminal case and the allegations outlined in the November 2021 letter. Brown Rudnick and Lockyer “each expressly deny any wrongdoing,” the settlement states.

Industry hired Lockyer, through his firm, in May 2016, following a scathing audit by the state controller that found “the potential for fraud, waste and abuse of public resources was extremely high” in the tiny manufacturing-focused city. Lockyer was to act independently from the city’s administration and was tasked with making sure the city followed through with its promises to fix several issues highlighted by the controller’s audit, including the city’s historically lax review of invoices submitted by third parties.

Around the time of Lockyer’s hiring, Industry began working in secret with Barkett and Hill to develop a solar farm on ranch land on the border of Diamond Bar and Chino Hills known locally as Tres Hermanos Ranch. Lockyer had known both men from his time in the state politics and Barkett, a frequent contributor to Democrats, had donated more than $70,000 to Lockyer’s campaigns over the years. Lockyer previously denied being influenced by his history with the two men.

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Though the city’s reforms increased scrutiny of other projects, the Tres Hermanos project was treated differently. Funds flowed to the project with little oversight and, when questions were raised about invoicing in particular, the project’s funding was restructured into a loan and staff was told it no longer needed to watch the disbursements as closely. None of the money has been paid back in the years since the project was shut down.

Industry eventually fired Lockyer, alongside Philips and others working on the solar project, in early 2018 before cutting ties with the developers, too. Since then, the project’s developers and the city have filed multiple lawsuits against each other and, at one point, an attorney with ties to Barkett attempted unsuccessfully to get a judge to place Lockyer and Philips in charge of the city.

After his firing, Lockyer called for the district attorney’s office to investigate Industry and alleged his firing was prompted by a prominent family’s opposition to efforts to reform Industry’s housing program.