Stein, Airport Board Face Mounting Scrutiny
By AMANDA BRONSTAD
Staff Reporter
The Los Angeles Board of Airport Commissioners and its president, Ted Stein, are facing increased scrutiny from a number of government agencies over how airport contracts are awarded.
Ron Rogers, chief executive of public relations firm Rogers & Associates, confirmed to the Business Journal that members of the district attorney’s office had approached him last month on how requests for proposals were issued for airport contracts. Rogers & Associates is bidding for the lucrative communications contract for L.A. Mayor James Hahn’s $9 billion modernization plan for Los Angeles International Airport.
Rogers declined to be specific about the questioning, including whether he was asked about specific individuals. (Rogers & Associates has done publicity work for the Business Journal.)
Asked whether the district attorney’s office is investigating the airport commission or airport contracts, spokeswoman Jane Robison declined comment.
Meanwhile, a senior city official speaking on condition of anonymity claims to have been told by at least two current LAX contractors that Stein asked them for political contributions. One of the contractors said Stein specifically asked for contributions to LA United, which led last year’s campaign against San Fernando Valley secession, the city official said.
The senior official identified URS Corp., a San Francisco-based facilities design, planning and construction management consultant and one of the primary contractors to the LAX Master Plan, as one of the contractors that Stein approached.
According to this official, a URS representative claims to have been told by Stein: “‘We want you to give to LA United.’ And (the URS official) said, ‘That’s not something we can do because we’re a publicly traded firm, and corporate governance prevents that. We’d like to help you with anything else.’ And Ted said, ‘No, you’re out of luck.'”
URS officials did not respond to requests for comment.
Stein did not return phone calls seeking comment.
City inquiries
The recent developments come to light as two city watchdog agencies are reviewing the commission’s operations.
The City Controller’s office will wrap up an audit next month on the airport’s contracting process, and the staff of the City Ethics Commission has begun looking into political fundraisers hosted by airport commissioners, including Stein.
Asked to comment on the inquiries, Hahn spokeswoman Shannon Murphy said in a statement: “Mayor Hahn is confident that his commissioners will abide by the city’s highest ethical standards and will fulfill their duties to the city of Los Angeles with the highest degree of integrity.”
Stein, who was appointed president of the Airport Commission by former L.A. Mayor Richard Riordan and was re-appointed to the post by Hahn in 2001, is one of several commissioners who held fundraisers for elected city officials, including a $1,000-per-person event for the mayor last month.
While the Ethics Commission review covers all city commissions, Bill Boyarsky, a member of the commission, said he was particularly troubled about those hosted by airport commissioners because of the proposed makeover of LAX. “It’s such a huge public works project,” he said. “Hundreds of contracts will be involved.”
Councilmembers Cindy Miscikowski and Bernard Parks had urged the Ethics Commission to begin reviewing the fundraising activities by members of various city commissions. In a motion filed Oct. 24, Parks and Miscikowski suggested a ban on all political fundraisers by commissioners.
“It is widely perceived in the contracting community that awards of contracts, bids and procurements will be based on political considerations, including campaign contributions, rather than professional merit,” the motion said.
Separately, City Controller Laura Chick is preparing the release of the first performance audit on the contracting process at the airport, as required under a city charter mandate.
Though Chick declined comment on the content of the audit, in a speech earlier this year at the Los Angeles Current Affairs Forum, she did reference a 2000 study of LAWA that recommended a change to the commission’s contracting practices.
“One of the recommendations is that the commissioners not be involved in the intricate, finite details of sitting in on meetings with staff,” she said. “That finding was never put into practice.”
Role in assessing bids
Although Chick did not name Stein directly, several commissioners acknowledge Stein’s practice of sitting in on early bid meetings that would otherwise be conducted by staff members.
Former Airport Commissioner Warren Valdry said that the practice represents a conflict of interest.
“If you have a commissioner sitting in on the bid process, he or she will influence the outcome of the other members of that commission,” Valdry said. “You sit in on the appraisal process, and you have evidence and advice other commissioners don’t have. It’s a conflict of interest.”
Valdry said his conflicts with Stein were among the reasons Hahn asked the council to remove him from the commission in October 2002. His second term was to expire next year.
Cheryl Petersen, vice president of the commission, said Stein frequently butts heads with people and has a “definite point of view on most things.” She said she and Stein often sit in on initial meetings, but neither of them has done anything improper.
“There’s always five people on every panel, and the decision is made by all five people,” she said.
Jim Ritchie, deputy executive director of LAWA, its No. 2 staff member, said he prefers that Stein or other commissioners sit in on initial bid meetings because they better understand the selection process. And he has the ear of the mayor.
“Ted is a hard charger,” he said. “He brings an important component: He wants to get this project done. In areas I can’t bring political support, he can.”
Comparing airport tasks
Ritchie, who manages the URS contract, said he would not know and doubted whether Stein ever asked for political contributions. He said Stein did not approve the original URS deal and that his involvement is limited to his role as a member of the commission, which approves funding and amendments to contracts.
URS’ contract with LAWA, signed in April 2001, was amended in May 2003, with many of the original tasks either postponed or canceled. Several task sheets include headers reading, “not funded,” or “at the direction of LAWA staff, this task was not completed.”
On Nov. 9, LAWA issued a request for proposals for a new consulting firm to develop additional design work, including “the programming and planning of individual components of the LAX Master Plan.” The RFP seeks advanced planning services such as scheduling, cost estimates, research and pre-construction management.
The original URS contract included consulting services for “program management services” for Phase III of the LAX Master Plan and environmental impact report. Those advanced planning services include managing other consultants on the Master Plan and preparing administrative and technical reports on subjects such as noise impact analyses, entitlements, mapping, zone changes and conceptual estimates.
The city official said the RFP and the removed portions of the URS contract are strikingly similar. “Why was this work taken away, and why is it being offered to other parties?” the official said.
Ritchie said changes to contracts are common in complex projects like the LAX Master Plan and that some components of the original contract were terminated after the Sept. 11, 2001 terrorist attacks, when the airport’s original expansion plan was scrapped and Hahn worked to develop a revised Master Plan.
Stein’s management style has gotten him in trouble in the past.
In 1997, then-City Controller Rick Tuttle issued a report critical of a consulting contract Stein made with Webster Hubbell, a former law partner of Sen. Hillary Rodham Clinton, D-New York.
Hubbell was indicted in 1994 and 1998 on tax evasion, mail fraud and conspiracy charges as part of Independent Counsel Kenneth Starr’s Whitewater investigation into President Clinton.
Stein, while serving as airport commission president and advisor to Riordan, hired Hubbell as a consultant in 1994 without a written contract and without informing anyone, including the airport commission, according to the controller’s report.
Hubbell was paid $24,750, which Tuttle approved after receiving assurances that the payment was valid, to lobby the U.S. Department of Transportation for the transfer of $58 million from the airport’s revenue fund to the city’s general fund. After Hubbell pleaded guilty to mail fraud and tax evasion in 1994, Stein fired him, the report said.
The report concluded Stein improperly approved the contract and that Hubbell, who billed for 80 hours’ worth of work, only put in less than half that amount. The controller’s office recommended Hubbell return the $24,750 to the city and that various departments to develop a “training curriculum on city commissioners’ roles and responsibilities.”
Staff Reporter Howard Fine contributed to this article.
