RTD Funds Vast Lobbying Effort With Bus Revenues

The Southern California Rapid Transit District in recent years has quietly drawn off millions of dollars from its troubled bus system to develop one of the most costly and extensive lobbying networks of any transit agency in the country.

Since 1983, when financing became critical to the fate of the Los Angeles Metro Rail project, the cost of lobbying for the transit district has jumped about 60%. Aided by a confidante of President Reagan, well-placed former congressional and U.S. Department of Transportation staff members and local political activists, RTD lobbying has gone into high gear, costing nearly $1.5 million in 1986 alone.

Altogether in the last 3 1/2 years, RTD has spent about $5.4 million to spread its influence in Washington, as well as at local city halls and among community groups.

With high-powered, well-connected individuals and companies on its payroll, many of the RTD lobbyists have been allowed to operate without the controls on spending demanded by other transit agencies, or on other RTD contractors, The Times learned. In one instance, a Los Angeles public relations man who was paid to be a Washington lobbyist for Metro Rail seldom if ever left home.

When it was launched with fanfare four years ago, the campaign to win financing for the RTD’s Metro Rail subway line was led by private interests, specifically powerful downtown corporate leaders whose companies stood to benefit from the project.

However, a check of the record shows that promised corporate funds never materialized--but that a far-reaching effort to lobby decision makers from Washington to Altadena was created anyway. The RTD itself paid all the lobbying bills. To do it, it drew on its bus system funds, and today justifies the expense by pointing to its chief accomplishment: construction of Metro Rail is under way.

“Everybody knows what a struggle it was,” RTD General Manager John Dyer said in an interview. “I would suggest that the effort was well worth the cost, the expenses, for the simple reason that we were successful. . . .

Internal RTD Lobbyists

RTD’s internal staff of government affairs specialists accounts for most of the lobbying expense. At a cost of about $1.2 million a year, a staff of 25 is divided between shuttling to Washington and Sacramento and lobbying at the local level.

Working the chicken dinner circuit from the San Fernando Valley to the Harbor, the local lobbyists seek political support for the RTD bus system and for Metro Rail, lavishing attention on areas where the subway will--and will not--run.

But the real boost in RTD lobbyist spending in recent years has been to buy access to key groups of lawmakers through an array of outside lobbying firms in Washington, Sacramento and Los Angeles.

“I’m stumbling over people who represent the RTD all the time,” said Ralph Stanley, administrator of the federal Urban Mass Transportation Administration, who is familiar with many cities’ lobbying efforts. “It’s like the (New York) Giants’ defense. They just keep coming.”

RTD’s federal and state lobbying effort may be the most costly in the nation. Transit agencies in New York, Washington, Houston, Seattle and Atlanta--the latter three competing with Los Angeles for federal construction funds--each spent less than $400,000 last year for staff and outside lobbyists, excluding local advocates. Not counting local lobbying, RTD spent about $742,000.

U.S. Funds Can’t Be Used

All of the money that the RTD spent on Washington lobbying had to be drawn from funds that otherwise could have been used to run buses. Federal Metro Rail funds cannot be used to lobby for more federal dollars.

Unlike many contractors of their size, RTD’s outside lobbyists--who make up to $250 hour and $5,000 to $10,000 per month--have not been subject to detailed accounting or routine auditing procedures. Other large transit systems, such as Washington’s and Houston’s, spend considerably less on lobbyists, yet require far more documentation on what they are paying for.

At the RTD, lobbying contracts of more than $25,000 are approved by the board of directors, but the selection and direction of the lobbyists, as well as the negotiation of fees, have been in the purview of Dyer, the controversial RTD chief. Dyer was hired in 1981 largely on the strength of having delivered through his lobbying skills a new--and now financially struggling--mass transit system to Miami.

As Metro Rail backers point out, the Dyer-directed RTD lobbying effort was legal and it succeeded. Work is finally beginning on the first 4.4-mile downtown segment of the subway, a political triumph over decades of dashed attempts to bring a mass rail transit system back to Los Angeles. Measured against the $1.25-billion package of federal, state and local money obtained for the subway segment between Union Station and MacArthur Park, Metro Rail supporters say, the lobbying costs, amounting to less than 1% of the $800-million annual RTD budget, were a good investment.

“Without those lobbyists, who were doing a lot of things, we would not have been successful,” Dyer said.

However, critics--and even some supporters--of Metro Rail have questioned the need for such an extensive and expensive lobbying effort, particularly at a time when RTD is under fire for loose controls on spending.

Jacki Bacharach, one of the county’s leading commuter rail proponents and a past chairwoman of the Los Angeles County Transportation Commission, worked with RTD’s lobbyists in Washington and came away skeptical.

“RTD always goes on the theory that more is better. . . . “ she said. “It seemed like a lot of money, a lot of people. It wasn’t clear to me what everyone was doing.”

Dyer did not allay such concerns in December when he attempted to expand his force of lobbyists, and then a few weeks later proposed bus fare hikes and service cutbacks and pleaded with city and county officials for money to improve the management of the much-criticized transit agency.

Dyer, who even critics concede can be an adroit political tactician, began quietly supercharging RTD’s lobbying program in 1983.

Business Fund Raising

RTD officials plotted strategy with a coalition of downtown bankers, real estate developers and oil and department store executives--whose financial interests are tied closely to the proposed downtown-to-San Fernando Valley subway. As a show of support for the project, the business leaders unveiled plans to raise hundreds of thousands of dollars--some of it from Metro Rail contractors--for a major private effort to win federal funding.

The RTD and the business group worked so closely that coalition leaders helped screen some of the lobbyists that were hired by the RTD. The relationship with the business coalition overlapped so much that at least one lobbyist believed that he actually had been hired by the businessmen instead of RTD. Even some of the coalition members told The Times that they were unsure who paid.

But RTD officials and downtown business leaders who directed the coalition’s effort insist that, while some political contributions and the cost of junketing key congressmen to Los Angeles to boost Metro Rail were paid privately, it was always clear that RTD would pay the lobbyists.

In any case, the business group fell far short of its fund-raising goal. “I know that at one stage some of the people had grandiose ideas of how the (business) community might support the coalition,” said George Gibbs, past chairman of the organization. “That did not develop.”

Another key leader of the business group, Stephen D. Gavin, acknowledged the business group went into a “kind of limbo” and increasingly relied on RTD to carry the ball. “The RTD had developed an operation that indicated . . . there wasn’t the consistency of need as far as the coalition was concerned,” said Gavin, a prominent downtown consultant and long-time adviser to Mayor Tom Bradley.

Brigade of Lobbyists

The operation RTD was quietly developing was a brigade of publicly financed lobbyists inside and outside the agency. About 30 advocates were deployed by RTD at one point, nearly half of them in a local government unit that was expanded shortly after Dyer arrived.

As the lobbying machinery grew to cover everything from restless community groups in the San Fernando Valley to powerful congressional delegations from states in the Northeast, conflicting explanations emerged about what some of these advocates were doing.

RTD contracts list one of the federal level lobbyists as Earl (Skip) Cooper, who has been paid more than $30,000 since being hired in 1985. Although Cooper has engaged in lobbying for RTD with officials in Los Angeles, payment records describe him chiefly as “one of our liaisons in Washington.”

However, Congress has no record, as required of lobbyists, of Cooper working in Washington.

In an interview, Dyer praised Cooper, a former aide to Los Angeles Councilman Gilbert Lindsay, saying among other things that he has kept members of the congressional Black Caucus “up to speed,” including Rep. Julian C. Dixon (D-Los Angeles).

Unaware of Connection

But Dixon, a key Metro Rail strategist in Congress and a leader of the Black Caucus, told The Times that he was unaware that Cooper worked for the RTD. “Skip has not been involved back here on the national level at all on this,” Dixon said, adding, “I would have known” if Cooper had played a major role in dealing with the Black Caucus.

Later, he said, “I want to qualify (that). He may have done something on the state level. . . . I would think his biggest value would be at the City Council level. He knows all the players.”

Other congressional sources familiar with the Metro Rail lobbying effort, as well as other RTD lobbyists in Washington, said they also had not heard of Cooper, who operates a public relations business out of his Wilshire district home. Cooper, currently a long-shot City Council candidate in the April elections, also is president of a black business association based in the Crenshaw area that helps minority firms get government contracts.

Cooper did not respond to several requests for an interview.

Like the other RTD lobbyists, Cooper was chosen by Dyer, without the competitive proposal process used by some other public agencies to hire outside legislative advocates. In an interview, Dyer said he could not recall who brought Cooper to his attention.

Tried to ‘Open the Door’

Dixon told The Times that he had tried to “open the door” for Cooper at the RTD, but for public relations work, not Washington lobbying.

“I asked and will ask again to look at him as a minority to give a piece of whatever they are doing in public relations,” Dixon said. “But I don’t know specifically what he has done for RTD one way or another.”

Dyer said he selects and evaluates lobbyists based on observation and word-of-mouth references, sometimes from RTD board members. He insisted that a more-structured process, such as seeking proposals for services from a variety of lobbying firms, would not work. Lobbyists would not bother to respond, he said.

However, Los Angeles County officials, hoping to reduce their Washington lobbying costs, are currently seeking competitive proposals from major lobbying firms. Sources said that one of those competing is the Washington office of Manatt, Phelps, Rothenberg & Evans. The Los Angeles-based firm, which until last month included former Sen. John V. Tunney as a partner, has worked for the RTD since 1983.

Supporters argue that the Metro Rail project has been beset by special problems that demand extraordinary lobbying efforts. One problem is the high cost; of current subway building projects, it is the most expensive other than Washington’s. In addition, Metro Rail has contended with strong opposition from the Reagan Administration and a series of life-or-death Congressional floor fights engineered by opponents within Los Angeles’ own delegation--Rep. Henry A. Waxman (D-Los Angeles) and former Rep. Bobbi Fiedler (R-Northridge).

Went After ‘Key Actors’

Dyer said he realized in 1982 that he had to crank up a major lobbying effort and assemble an array of consultants that “in one way or another could access the key actors” in Washington.

“There is national competition between every city that is interested in mass transit,” Dyer said. “And you either get into the competition or you do not have a chance. You don’t get anything.”

The high-powered lobbying drive may have delivered the first segment of the subway project, but it was--in financial terms--a qualified success. Originally, 70% or more of the costs were to be paid by the federal government. RTD officials also had promised an up-front, tentative commitment of federal support for the full 18-mile system.

What they got was about 50% federal funding for the first segment, meaning, according to Stanley of the Urban Mass Transit Administration, that more local tax money will be required for Metro Rail than for any other major transit system in the country. For later segments, despite the promises, the transit district has not yet obtained further federal funds, although Congressional approval is considered likely.

“There is no question as we get further into this thing, I think we all know we’ll be lucky if we get 50% federal dollars,” said Dyer, who blames tighter federal budget policies and Reagan Administration opposition to new mass transit systems.

More May Be Needed

Despite the continuing uncertainties, RTD should be able to cut back on its federal lobbying expenses in the near future, Dyer said. But he warned that more lobbyists may be needed at the state and local levels to make up for less-than-expected federal support.

“We may have to shift around a lot of things,” he said. “Very frankly we need assistance, perhaps more (lobbying) assistance than we’ve got at the state and local level. One of the things that is a real problem today is not just Congress; it is the state Legislature . . . and it’s the (local governments). The locals are putting a large amount of money (as their share in the cost of Metro Rail) and they are going to put more money in.”

While that appears to be true, the RTD board, battered by nearly a year of criticism over free spending and mismanagement at the transit agency, has grown highly sensitive to the costs of lobbying. In an unusual rebuff, the board recently balked at a Dyer proposal to expand his lobbying force. Dyer wanted to hire Eastside political consultant George Pla, a close associate of Los Angeles City Councilman Richard Alatorre, for a $36,000-a-year lobbying contract. The recommendation came only weeks after Alatorre complained publicly that Latinos were not getting enough subway contracts.

Dyer and Alatorre insisted that they never discussed Pla’s contract. “I’ll take the heat entirely on that one,” Dyer said. “It was my own identification of Mr. Pla. . . . I know of his efforts around this town and the state Legislature and a large number of other things from a lot of people.”

Pla’s contract now is on hold and one concern voiced by some board members was that they were unclear where Pla would fit in with all the other RTD lobbyists.

Runs Into Trouble

Dyer also ran into trouble recently when he tried to add the Central City Assn., the main lobbying body for downtown business interests, to the RTD consulting payroll. Dyer proposed an $80,000-a-year “community relations” contract with the group to improve RTD’s communications with businesses during subway construction.

Critics, including members of the RTD board, questioned why an association of the leading boosters and beneficiaries of Metro Rail needed to be paid to help smooth the way for the project. In the face of the criticism, the business group withdrew its proposal.

While RTD board members have begun questioning the need for more political consultants, it not clear from public records how effectively the more than $1 million already paid for outside lobbyists was spent.

The lobbyists’ contracts require them to make periodic reports on their activities. Although the reports are almost always oral, RTD officials insisted that they closely supervise the lobbyists.

The two Washington lobbying powerhouses hired by the RTD--the Manatt law firm and Bill Hecht & Associates--give general descriptions of their monthly activities with their bills. Hecht, for example, who provides the most detail, lists meetings with congressmen, dinners with key committee staffers, golf outings with Administration officials.

Poorly Detailed Billings

Other lobbyists file single-paragraph demands for their monthly fees. The poorly detailed billings have continued even though the RTD board last year supposedly strengthened controls by establishing a minimum number of hours that contract lobbyists must devote to RTD business each month.

Spokesmen for transit systems in Washington and Houston said their outside lobbyists are required to submit hour-by-hour explanations of their activities. “They give us a billing that shows the actual hours, broken down by (name),” said a spokeswoman for the Washington transit system. “Our procurement people were very, very adamant about having that.”

Alan Kiepper, general manager of the Houston transit system, said his agency requires a detailed billing from its Washington lobbying firm, including the name of each employee who worked for the transit district, their hourly rate and time spent, the contacts made or any other work performed. “The bill . . . will normally run many pages,” Kiepper said. “We just like to know what we’re paying for.”

Benjamin Palumbo, a Washington lobbyist whose firm has been paid about $156,000 by RTD since 1983, said RTD has never raised the issue of billing procedures. “I can only tell you this is the way we began billing when we started,” Palumbo said, adding, “No one ever said it was necessary” to submit documentation of hours or expense receipts.

“If requested, we’d certainly provide them,” he said, as did the other lobbyists questioned.

No Contracts Audited

RTD policies also normally require that contracts of over $100,000 be audited. But that has not applied to the lobbying contracts, and none has ever been audited. Until a few months ago, most contracts were written in a way that excluded auditing. But the largest of the outside lobbying contracts--now totaling more than $440,000 with Bill Hecht & Associates--should have been audited long ago and never was, RTD officials acknowledged.

After inquiries by The Times, RTD Controller Joseph Scatchard said the Hecht contract will be audited “very soon.” In the future, as a result of recent contract amendments, other lobbying contracts will be audited when they reach the $100,000 mark.

The lobbying contracts were negotiated, drafted and monitored by Dyer outside of the normal accounting channels. Scatchard said the RTD should establish better billing standards for the lobbyists.

“I feel this whole area can be improved,” he said.

Uses Other Groups

The reach of the Metro Rail lobbying effort is not limited to what RTD spends. The transit agency also has enlisted the help of lobbyists for the City of Los Angeles, the county Transportation Commission, labor unions and businesses that want a piece of the action.

“It’s clearly the most active and effective single (transit) project lobby by far,” said Stanley, echoing the assessments of some knowledgeable congressional sources.

Stanley, who has led the Reagan Administration’s opposition to the project, recalled being spotted and chased through a St. Louis airport by a representative of a rail car supply firm who wanted to argue the merits of Los Angeles’ subway.

He also tells of meeting a congressman from rural Georgia who asked what exactly the federal mass transit agency does. When Stanley began to explain, the congressmen said, “Oh, you mean the Los Angeles system.”