Low-rated firm fights to keep rich county work

Over the last 20 years, Los Angeles County taxpayers have paid tens of millions of dollars to a Virginia-based company to perform work criticized repeatedly as inadequate by county officials.

Faced with the possibility that its $32-million contract won’t be renewed, Maximus Inc. has spent more than $124,000 this year on lobbyists and thousands more on political contributions to county supervisors, including some not running for reelection for two more years.

Maximus’ story illustrates the intense fights that go on as the Board of Supervisors doles out millions of dollars in often lucrative contracts. In Maximus’ case, as well as many others, a county contract offers the possibility of a big payout for providing services to the poor.

Off and on since the 1980s, the company has helped welfare recipients in Los Angeles County get jobs, most recently providing service to about 11,000 people each month in the San Fernando and Antelope valleys.

When the company’s contract came up for renewal this year, the Department of Public Social Services said another company’s bid was better. With its ties to the county in jeopardy, Maximus appealed the judgment only to have a review panel and the county’s auditor-controller affirm the negative evaluation.

But the county’s five supervisors get the final say. They are expected to vote on the matter next month.

In the first half of the year, Maximus spent $124,000 on two lobbying firms. Only the Southern California Hospital Assn. and Plains Exploration & Production Co., the oil company involved in a controversial effort to expand drilling in the Baldwin Hills area, spent more on lobbying in that period, according to reports filed with the county.

The six-month tab is more than the $85,000 Maximus spent on lobbying for all of last year in L.A. County.

At least two more lobbying firms have reported that Maximus hired them in recent months. The county does not require Maximus to report its latest lobbying expenses until next month.

In addition, Maximus gave $1,000, the maximum allowed, to the campaigns to reelect county supervisors Don Knabe and Michael D. Antonovich. They gave the same amount to supervisors Zev Yaroslavsky and Gloria Molina, whose terms still have two years to run. Yvonne B. Burke is retiring and does not have an active campaign account.

The recommendation to cut Maximus follows previous efforts by county officials to sever the county’s relationship with the company, whose aggregate 13 years of service have been marked at times by significant shortcomings.

In 1993, the county did not renew a Maximus contract to provide welfare-to-work services countywide. The company had just completed a five-year contract, and supervisors, along with other officials, complained that county-run programs were outperforming Maximus’.

Seven years later, Maximus won a smaller contract after a bruising political battle over whether the job of helping welfare recipients enter the workforce was best done by public or private employees.

Since then, the company has fallen short of required goals. Last year, an assessment of Maximus’ performance under its three-year contract found the company failed in five of eight categories.

The assessment found:

* Career goals and job placements for participants were not set in a timely manner.

* Clients did not give the company acceptable scores on customer service surveys.

* Maximus failed to offer sufficient support to clients once they were placed in jobs.

A spokeswoman for Maximus, Lisa Miles, called the failing scores “outdated” and said the statistics did not fairly represent the company’s work. She declined, however, to provide data that she said rebutted Department of Public Social Services’ grades.

Even before learning that county officials were recommending that it be dropped, Maximus decided to go directly to the board to seek contract renewal.

After word leaked out that department officials favored Denver-based Policy Studies Inc., Maximus hired additional lobbyists.

In contrast to Maximus’ $124,000 lobbyist expenditure, Policy Studies Inc. hired one lobbyist and paid him $5,000 during the same period.

The company, which competes with Maximus for many contracts across the country and operates welfare-to-work programs in Tennessee, Omaha and Wisconsin, gave no money to county candidates or to aid ballot measures, according to Doug Howard, the company’s senior vice president.

The firms are vying for a two-year contract, the dollar amount of which has not been announced.

The new contract has the potential to be more lucrative than the existing one. If the contractor hits certain service benchmarks, it can earn bonuses of up to 21%.

Among the firms hired most recently to work on Maximus’ behalf is Englander & Associates, one of the largest lobbying firms involved in county politics. Knabe’s son, Matt, is a partner; the firm’s founder, Harvey Englander, is one of Knabe’s former political consultants.

Supervisor Knabe’s spokesman, David Sommers, said the fact that his boss’ son works at the firm will not affect the supervisor’s vote.

And Englander lobbyist Eric Rose said Matt Knabe will not lobby the county on behalf of Maximus.

Knabe has supported Maximus before. In 2000, he joined Antonovich and Yaroslavsky to give Maximus the contract in parts of the San Fernando and Antelope Valleys represented by them.

Molina and Burke opposed outsourcing the welfare-to-work program, and they successfully fought for the services to be provided by county employees in their districts and Knabe’s district.

Yaroslavsky’s support in 2000 for Maximus signified a break with his traditional labor and anti-poverty allies. On the day of that vote, union members filled the supervisors’ meeting room shouting “shame.”

His deciding vote on Maximus’ behalf in 2000 followed a $25,000 donation by the company the year before to a political committee run by Yaroslavsky’s political allies.

That committee helped successfully fight off a ballot initiative to expand the Board of Supervisors from five members to nine, a top priority for Yaroslavsky at the time.

The donation circumvented campaign finance rules that limit donations made directly to supervisorial candidates to $1,000.

Yaroslavsky may be the swing vote again this year. His spokesman, Joel Bellman, said the supervisor has not yet made a decision.

“He is still studying and gathering information,” Bellman said.

But the confluence of political contributions and big ticket contracts concerns many political reformers.

“When decisions to award contracts worth tens of millions of dollars go to companies with a problematic record of significant lobbying efforts and large political donations, it really undermines the public’s trust and confidence in our county government,” said Kathay Feng, executive director of political reform advocate Common Cause California. “It certainly raises questions why they are being awarded a major contract.”

Bellman said Maximus’ political donations “had no bearing on the decision to support Maximus eight years ago and will have no effect now.”

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garrett.therolf@latimes.com