Public Works Board Tightens Rules After Disclosures on Capri Contract

The Los Angeles Public Works Board tightened its contracting procedures Monday by requiring extensive background checks on bidders.

Board President Maureen Kindel successfully urged the board at Monday’s meeting to adopt a six-point plan beefing up the board’s contracting methods after disclosures in The Times about a $1.2-million contract awarded in 1983 to clean up a toxic dump site in Boyle Heights owned by Capri Pumping Service.

Without conducting a formal background check, the board awarded the cleanup contract to R.E. Wolfe Enterprises, whose chief owner, Rolla E. Wolfe of Kansas City, had come under fire there for his alleged ties to organized crime.

Wolfe has denied any involvement with organized crime and has collected numerous letters of recommendation from public officials in the Kansas City area.

A part-owner in the firm was controversial Orange County businessman W. Patrick Moriarty, whose interest in the company was bought out by Wolfe about a week before the city signed its contract with Wolfe Enterprises.

Moriarty recently pleaded guilty to federal racketeering charges in connection with a poker club licensing scandal in the City of Commerce.

“We can all learn from experience and should always be willing to do so,” Kindel said. “Recent articles on Capri brought to light several areas in which improvements in our procedures seem desirable.”

Under the new rules, first-time bidders on public works jobs will be investigated by city personnel for their performance on past contracts “anywhere in the United States” as well as overseas. The background check will include the bidder’s record in complying with wage regulations and affirmative action requirements, as well as any civil judgments, criminal activity and “charges of wrongdoing or unethical conduct” against the bidder or its principals.

It is unclear exactly what kind of check will be required of bidders who have done business with the board in the past. Kindel could not be reached for comment. However, board spokeswoman Anna Sklar said she believes that those bidders will also have to submit to a background inquiry of some sort if they bid on public works contracts in the future.

In addition, the new rules require that commissioners contacted by a bidder’s representative before the contract award must disclose the communication by filing a report with the board secretary. Public works personnel contacted by City Council or mayoral representatives must also file disclosure reports. In the case of personal service contracts--awarded by the board after negotiation rather than competitive bid--public works personnel will be required to conduct oral interviews with all qualified responsive bidders, instead of relying exclusively on written applications. A permanent standing committee of two public works commissioners will be appointed to monitor the award of these contracts and to attend the oral exams.

$120 Million in Contracts Annually

The public works board awards more than $120 million a year in contracts to build a variety of public projects ranging from street improvements to sewage treatment plants.

In selecting R.E. Wolfe Enterprises for the Capri cleanup, the board overruled the initial recommendation of its staff, which had found another company to be more qualified. Wolfe ultimately won the contract after hiring several well-known lobbyists and scoring well on an oral interview.

No formal or extensive background checks were done of any of the bidders. Later, it was learned that Rolla Wolfe had come in for criticism for his activities in the Midwest.

A background check of R.E. Wolfe Enterprises done by the San Bernardino County sheriff in 1983, when Wolfe applied for a county landfill contract there, resurrected old newspaper allegations of Wolfe’s dealings with organized crime. The sheriff also uncovered an “open” federal strike force investigation of Wolfe.