A Lot of Smoke

Certain Los Angeles City Council members huff and puff with indignation at the mere suggestion that the private bonding firms contributing most heavily in city election campaigns have an edge on their competitors in winning city business. They dare you to prove any wrongdoing. They protest that they have never steered contracts in a certain direction to reward those who contribute to their campaign funds or favorite private charities. Goodness, they insist, they even have helped people who never contributed to their campaigns.

They huff and puff too much. The facts, as outlined by Times staff writer Victor Merina on Sunday and Monday, demonstrate that something other than coincidence--or pure competence and qualification--is at work here. In at least one major project the City Council overruled the recommendation of the city administrative officer and a financial adviser in awarding lucrative contracts to bond counsels and underwriters.

The result was that more than $2 million in commissions and fees will go to firms that lobbied the most and provided the most generous campaign contributions to key council members and the mayor, and not to those that the experts believed would provide the most appropriate and qualified services.

It must be noted that Councilman Gilbert Lindsay is not as shy as his colleagues are in denying the connection between contributions and city business. While he insists that he has never pressured anyone to contribute, he said, “All things being equal, without juggling or anything else, I’m going to take care of my friends first.” But who decides that all things are equal or defines what is juggling and what is not? As the chairman of the council’s Public Works Committee, Lindsay is in a crucial position to help his friends. Lindsay also leads the 15-member council in campaign contributions from bonding firms, collecting $36,300 between 1984 and mid-1986.

For their part, the bonding firms protest that campaign contributions themselves don’t win city contracts. They contend that there is no outright shakedown, as in “you contribute or you don’t get any business.” The common excuse by contributors is that contributing is a “necessary evil,”a part of doing business. But money does build “relationships,” they acknowledge, and, all other things being equal, those relationships bear fruit. The fact is that anyone really intent on getting the city’s business would not gamble on losing it by neglecting to contribute.

Councilman Ernani Bernardi does not view the practice quite as innocently and euphemistically as do his colleagues and the bonding-company officials. “We no longer have a competitive bidding process,” Bernardi told The Times. “Instead, we have an auctioneering process.” Councilwoman Joan Milke Flores called the practice “obscene.”

A necessary evil? The practice clearly is wrong, even though it technically may be legal. And it is not necessary. There is no justification for the City Council, a legislative body, to be involved in the awarding of such contracts at all. Now there is talk of a proposed city Charter amendment to allow more bond-underwriting contracts to be based on negotiations rather than competitive bidding.

A case can be made for negotiating certain bonding contracts to achieve the best deal for the city. But the council itself should not be involved in negotiating or awarding such contracts in any manner. That job should be given to an independent fiscal officer who is insulated from political pressure from the City Council, the mayor’s office or any other source.

The present system is an invitation to corruption, whether by blatant shakedown or implication. There may be no proof of wrongdoing, no smoking gun. But there’s plenty of smoke.