Steering Clear of Favoritism

Public officials keep pointing at what they say is a fine line that separates awarding contracts and taking campaign contributions given by winners from the realm of wrongdoing or favoritism. The line is so fine hardly anyone else can see it.

The fine line was in the news again last week in Orange County with Supervisor Bruce Nestande denying that the more than $13,000 contributed to his election campaign for secretary of state by the brokerage firm of Smith Barney Harris Upham & Co. Inc., had anything at all to do with the firm’s being awarded the lead underwriting role in the sale of $270 million in revenue bonds to finance expansion at John Wayne Airport.

Nestande also denied that he tried to influence his fellow supervisors to award the contract to Smith Barney. And he denied soliciting a letter that Assemblyman Richard Robinson (D-Garden Grove) said he wrote to the county board, at Nestande’s request, urging them to reopen bidding on the airport bonds (which it did) that previously were awarded to Merrill Lynch & Co. before litigation by Newport Beach residents delayed the project.

The one thing Nestande didn’t deny was the involvement of his old buddies Michael K. Deaver and Steven Rhodes, who served on President Reagan’s White House staff and, before that, were on the Reagan staff with Nestande when Reagan was governor of California. Rhodes, now a Smith Barney vice president, had promised to help raise campaign funds for Nestande. Deaver, now a Washington-based lobbyist, represents Smith Barney and was lobbying Nestande for the contract. Nestande said none of this influenced his support for Smith Barney or prompted him to try to influence other board members. Perhaps.

We heard similar denials earlier this month in Los Angeles after the City Council there awarded a contract to a bonding firm other than the one recommended by city staff.

Even if and when everything is within the letter of the law, the practice shakes public confidence and is fraught with possibilities for corruption or at least favoritism that could easily shut out competent firms and put too much emphasis on campaign contributions and close connections.

The best way to handle the awarding of lucrative bonding company contracts would be to transfer such decisions from the Board of Supervisors to an independent fiscal officer who would not be subjected to political pressures from the county board. That might cut down on campaign contributions, but it would also eliminate the existing potential for corruption, or any suspicions of it, and help restore public confidence in the bidding process.