The Los Angeles Department of Water and Power is investigating the involvement of one of its directors in the bitcoin mining industry after business records demonstrated that he had been managing a data center in North Dakota and had set up a company that began bitcoin mining in Colorado in 2018. John Chen, who is the director of the DWP’s corporate performance office and earns $320,688 yearly, has been placed on administrative leave, pending the investigation. The utility is probing whether he complied with the ethics rules that expect employees to acquire permission for any outside work.
After being questioned by the Los Angeles Times about Chen’s outside ventures, the DWP put him on administrative leave in May 2023. Cynthia McClain-Hill, the president of the DWP board of commissioner, commented that the issue of Chen’s outside ventures was a cause for concern. She expected that employees at DWP, particularly those at a director level, would give their full-time attention to the city’s business.
In an interview with The Times, Chen compared his bitcoin businesses to owning real estate or stocks, saying he didn’t need DWP’s permission to work on them. Chen’s lawyer, Michael Faber, asserted that Chen is exploring all options, including the possibility of litigation against the DWP. Bob Stern, who aided in creating the city’s ethics laws, said that Chen’s bitcoin work would only be a problem if he could not perform his DWP job appropriately.
Court documents, business records, and news stories about Chen’s holdings provide insight into the operation. Chen’s company paid $13 million to acquire an ex-Intel Corp. property in Colorado Springs in 2018, where it began mining Bitcoin. A different company owned by Chen spent $6.5 million upgrading the facility to increase its electrical capacity. Chen said he partnered with Chinese and Singaporean firms on the venture. He also secured an economic development agreement with Colorado Springs Utilities in 2018 to obtain reduced electricity rates.
Two employees who worked for Chen’s company said that he visited the site sometimes up to twice a month. Chen made no secret of his business in Colorado Springs and gave an interview to the Colorado Springs Independent when neighbors there complained about the noisy computer cooling fans at the bitcoin mining operation, promising to plant pine trees to muffle the sound.
In summary, the Los Angeles Department of Water and Power has placed John Chen, one of its directors, on administrative leave while it investigates his involvement in the bitcoin mining industry. Chen owns a firm that began mining bitcoin in Colorado in 2018 and has registered as the manager of a mining data center company in North Dakota. The probe is to look into whether Chen complied with ethics laws that necessitate employees to obtain permission for outside work.
—–
The material in this article is written on the basis of another article.