FBI Probing Role of Politics in Capri Cleanup Contract

As part of a wide-ranging probe into allegations of political corruption in California, the FBI is investigating the city-run, state-financed cleanup of the Capri Pumping Services dump site in Los Angeles, The Times has learned.

In the investigation, FBI officials are particularly interested in the possibility that political influence might have played a role in awarding the $1.3-million cleanup contract in 1983 to R. E. Wolfe Enterprises, according to several individuals interviewed by the FBI, including the former director of the city Bureau of Sanitation.

In a controversial decision, the city Public Works Board, whose members were appointed by Mayor Tom Bradley, rejected the initial advice of city and state staff members in accepting the bid from Wolfe Enterprises, a firm established by Rolla E. Wolfe, a Kansas City-based highway contractor, and W. Patrick Moriarty, a former fireworks manufacturer and a central figure in the government investigation.

Officials of the state Department of Health Services approved the bid award, but only after a state engineer who objected to Wolfe was removed from bid review activities.

Wolfe’s company also won a five-year contract to operate landfills in San Bernardino County. That contract also is under investigation by the FBI, said sources who had been interviewed by investigators.

Although those contacted by the FBI said they were interviewed two or more months ago, a source close to the inquiry said the investigation remains active and that interviews are continuing.

A spokesman for the FBI in Los Angeles refused to confirm or deny that an investigation is under way.

Public Works Board President Maureen Kindel confirmed that three Bureau of Sanitation employees were interviewed by the FBI at Los Angeles City Hall several weeks ago.

She noted that the board’s bidding procedures were tightened after the Wolfe contract was awarded. But she added: “It would be a big surprise (if the investigation resulted in criminal action) considering the fact that I looked into this very throughly and the city attorney has looked into this.”

Wolfe, in a telephone interview Thursday, said that he and his firm had done nothing improper to influence the award of the Capri contract. He said that Moriarty no longer held an interest in the company at the time of the bid award in August, 1983.

Moriarty’s attorney, Jan Lawrence Handzlik, said: “I decline to comment on anything that might be part of an investigation.”

Last March, Moriarty pleaded guilty to seven counts of mail fraud in connection with bribery of public officials, illegal contributions to politicians and kickbacks to a bank official.

The FBI probe of Capri is a part of the Moriarty investigation but separate from another FBI investigation into the state’s handling of cleanup contracts at three federal Superfund sites--the Stringfellow Acid Pits near Riverside, the McColl refinery dump in Fullerton and the Purity Oil site near Fresno.

The Capri cleanup, which was completed last year, has been a source of bitter contention between Gov. George Deukmejian and Bradley, likely rivals in this year’s governor’s race. In 1984, each accused the other of being responsible for delays at Capri, a one-acre site in an urban neighborhood where barrels of hazardous chemicals, including cyanide and acids, were illegally dumped.

Different Questions

Now, the FBI probe raises questions of a different sort for both city and state administrations over issues detailed in The Times almost a year ago.

In the final days of 1982, just before Deukmejian took office, Gov. Edmund G. Brown Jr. agreed to let the city Public Works Board handle the cleanup at Capri. In an unusual step, the state Department of Health Services agreed to pay the city the entire $1.3-million cost in advance--but retained the authority to approve the details of the cleanup operations.

According to documents obtained by The Times, the city Bureau of Sanitation, which reports to the Public Works Board, rated Wolfe Enterprises third among the four firms that were competing for the job--the largest toxics cleanup attempted with state funds.

The staff of the state Department of Health Services agreed--giving the highest rating to D’Appolonia Consulting Engineers of San Francisco.

Urges Interviews

But records show that, at the urging of public works commissioner Louis Moret, the board insisted that the city staff interview all of the prospective bidders.

Moret, who resigned from the board to run for the City Council, could not be reached for comment this week.

After the interviews, the city’s staff revised the ratings, in effect declaring a tie between Wolfe and D’Appolonia. Kindel said that only one of the five Public Works Board commissioners, Moret, sat in on some of the interviews. Then, the Public Works Board awarded the contract to Wolfe, the lower of the two bidders.

Tadao Isomoto, chief of the Bureau of Sanitation, said this week that the city’s reviewers were surprised by how polished Wolfe’s responses had been in the interviews. Like others contacted by The Times, Isomoto said that he was questioned by an FBI agent a few months ago and that the queries centered on political influence in the awarding of bids.

‘Entirely Nonpolitical’

However, Isomoto defended the work of his own staff, insisting that the ratings were “entirely nonpolitical.”

“We did it very, very objectively,” he said. “These are very, very professional people.”

Nonetheless, Isomoto said that he believed that the state Department of Health Services would overrule the decision, in part because Christopher E. Koerner, the state engineer assigned to oversee the Capri project, regarded Wolfe as unqualified to do the cleanup.

Koerner was approached by Christine Del George, who had been hired as a lobbyist by Wolfe. According to a state Department of Health Services document prepared by Koerner, he refused to discuss the bidding with her.

According to Koerner’s account, he merely told Del George that “the decision would be made on technical merit, not political contacts.”

Complained About Conduct

Soon after, Sen. Daniel E. Boatwright (D-Concord), who describes Del George as a personal friend who he has taken to dinner several times, called a top Department of Health Services official to complain about Koerner’s conduct--charging that Koerner had treated Del George rudely.

Boatwright did legal work for Wolfe on other projects between July and September of 1983, for which he was paid about $14,000, the lawmaker said.

But Boatwright said his complaint about Koerner to Deputy Health Services Director Joel Moskowitz was not prompted by his affiliation with Wolfe. “I didn’t have anything riding on the outcome of it, other than (concern) that a state employee was very rude.”

Moskowitz subsequently removed Koerner from the department’s final review of the Wolfe cleanup proposal.

According to Koerner’s chronological account, department engineers reviewing the bid were told “only to answer the question of whether or not Wolfe was qualified, not how (Wolfe) compared to D’Appolonia,” who was favored by the city and state staff members.

Hired as Subcontractor

Wolfe eventually hired D’Appolonia as a subcontractor to work on the project.

But the controversy did not end with the awarding of the bid. In the midst of the cleanup operation, in June, 1984, Koerner and two other state Department of Health Services staff members, Janet Meyer and Steve Viani, formally complained to their superiors about spending at the city-run Capri cleanup, citing what they described as “the unjustifiable expenditure of hundreds of thousands of (state) dollars.”

Thomas F. Bailey, chief of operations for the department’s toxics division, responded with the assurance that no money would be spent unnecessarily.