Fluor May Lose Job to City Policy on S. Africa

In the first major test of the city’s recently expanded anti-apartheid policy, a huge international construction and engineering firm is fighting to hang onto a $2.5-million contract to enlarge the Los Angeles Convention Center.

Irvine-based Fluor Corp., which currently does about $31 million a year in business in South Africa, had been tentatively selected as the lead firm to oversee the $350-million job. The choice of Fluor was made last month, shortly before the City Council approved the new restrictions on dealings with firms doing business in South Africa, by the joint city-county Convention and Exhibition Center Authority.

Although not legally required to do so, the authority forwarded the selection to Mayor Tom Bradley and the Los Angeles City Council for concurrence.

Councilmen Object

On Friday, however, council members Robert Farrell and Zev Yaroslavsky told a City Hall news conference that awarding Fluor the contract would be a violation of the ordinance adopted on July 2. The contract has not been formally awarded.

The ordinance bans purchases from any firm with business interests in South Africa. The restriction affects about 13% of the city’s contracts, valued at estimated $107 million a year. Most of the city’s commercial dealings are not covered because of a city Charter requirement to accept the lowest bid.

The ordinance extended a policy adopted last August that restricted city business with banks doing business in South Africa and called on managers of city employee pension funds to eliminate any investments made in South Africa-connected enterprises.

Yaroslavsky and Farrell predicted that the council will reject the Fluor recommendation and called on the convention authority commission to do likewise.

‘Very Difficult’

The commission president, Sandra Gordon, said that while the panel has the legal authority to grant the contract to Fluor without council approval, politically it would be “very difficult” to go against the mayor’s and council’s wishes. She said it is not clear how the commission would proceed if Bradley and the council objects to the Fluor selection.

Rick Maslin, a spokesman for Fluor, hinted at a possible court fight. “Our position is very well known by the city. . . . We feel the ordinance, if enforced, could be in violation of state and federal law.” He declined to elaborate.

Maslin said the firm is operating within the foreign policy guidelines of the United States--the Reagan Administration’s so-called “constructive engagement” plan. “We feel that continued participation in South Africa by companies such as ours works as a positive toward social change in that country. We are against apartheid and find it morally repugnant,” he said.

“We feel the U.S. government is the establisher of foreign policy.”

But Farrell brushed aside that argument, saying that’s “last year’s argument, that’s last year’s politics.”

The issue before the council is that “they don’t comply with the city ordinance,” he said.

Yaroslavsky, noting that Fluor is involved in work on a major oil refining facility owned by the South African government, said: “You can’t do business with South Africa and with the City of Los Angeles anymore. . . . Fluor has to make that choice. . . . This is a company that has a very substantial presence in one of the most repressive countries the world has ever known.”

Mayor Holds Comment

A spokesman for Bradley, a vocal supporter of the city’s anti-apartheid policies, said the mayor supports efforts to enforce the ordinance. But the aide, John Stodder, said the mayor had no specific comment on whether Fluor Corp. should receive the contract or on the firm’s dealings in South Africa.

Bradley has received about $14,500 in campaign contributions from Fluor in the last three years, but Stodder denied that that was related to his silence on the contract question.

The contract selection will be reviewed by council committees in the next few weeks, before the full council acts.