Funding Agency Members Facing Conflict Question

The Los Angeles Private Industry Council each year steers millions of dollars in federal funds to organizations that are run by community leaders who also sit on the council’s Board of Directors, city records show.

In the current fiscal year and last year, six agencies that employ PIC board members have received a total of $10.5 million in job training grants, according to the agency’s contracts. This relationship raises serious conflict-of-interest questions for board members who discuss these contracts with fellow directors privately and at public meetings, city officials said.

“Even if these members abstain from voting on issues affecting their agencies directly, there is an appearance of impropriety,” Councilman Robert Farrell said Monday in a speech to the PIC board members.

Mayor Tom Bradley is concerned enough about the potential conflict issue that he will seek to replace board members when their terms expire with officials who do not control organizations that receive PIC funds, Deputy City Mayor Grace M. Davis said.

“They do become advocates and then a conflict of interest surfaces,” Davis said. “They shouldn’t be advocates for monies they are receiving. If someone else is receiving money, there wouldn’t be that conflict.”

The board, which is made up of 22 volunteers, grants $42 million a year in federal funds to schools, private businesses, labor unions and minority agencies to provide job training programs for low-income residents. Last year, 8,000 people were enrolled in a variety of employment and training programs, according to figures provided by the nonprofit agency.

The federal Job Training Partnership Act and the conflict-of-interest code adopted by the City Council prohibit any PIC director from voting or participating in decisions that could benefit the member’s organization, Deputy City Atty. Jessica Heinz said.

Heinz said she is not aware of any instances in which board members have voted on contracts awarded to their businesses. But she said she repeatedly interrupted meetings to warn members that their discussions came close to violating conflict-of-interest statutes.

“We are not police officers,” said Heinz, who advises the Private Industry Council on legal issues. “The board members don’t have to listen to us. They don’t frequently.”

The members whose agencies received PIC monies in the last two years are Gabriel Cortina, assistant superintendent of the Los Angeles Unified School District ($4.9 million); John Mack, president of the Los Angeles Urban League ($1.7 million); Stelle Feuers, an administrator in the Los Angeles Community College District ($1.2 million); Kerry Doi, executive director of the Pacific Asian Consortium in Employment ($1.1 million); Sophia Esparza, executive director of the Chicana Service Action Center ($920,702), and Pat Williams, a labor consultant for the United Auto Workers ($773,109).

The Times reported Thursday that the president of the Private Industry Council, Dominick J. Ramos, has been the target of several inquiries into allegations that he mismanaged a $160,000 marketing contract, solicited political campaign contributions from his employees and used government dollars to purchase a new car.

In interviews Thursday, the board members took strong exception to claims by city officials that their roles posed any form of a conflict. They said that federal legislation requires the participation of board members who represent community-based organizations.

Feuers said the board’s policy of not permitting members to sit on committees that authorize grants to their own agencies prevents any opportunity for directors to use their influence.

Esparza said that elected officials who oversee PIC boards in other jurisdictions are not as critical as Los Angeles city leaders.

City officials here have taken an “extremely narrow view” by interpreting the grants paid to the six organizations as a potential conflict, said Mack, the Urban League president.

“At times I feel the city would prefer not to have some of us around because we are more vocal than people would like us to be,” Mack said. “We keep the process honest, keep the job-training mechanism true to its spirits of law to serve all people.

“If we . . . leave it strictly up to bureaucrats, elected officials and the private sector, I think the people we . . . serve will be in big trouble.”

Davis, who is in charge of the grants section in the mayor’s office, said in the future the mayor will attempt to get policy makers, such as school board members, instead of administrators, to serve on the PIC board.

“The thing is that PIC should only really be making policy and not get involved in the day-to-day stuff,” Davis said. “Right now they get very much involved in that.”