San Bernardino County BBB May Open L.A.-Orange County Branches

The Better Business Bureau of Los Angeles/Orange Counties, which closed last week after running out of money, may be replaced by branch offices of a bureau based in San Bernardino County if a local proposal receives national approval.

BBB officials confirmed Wednesday that the board of the beleaguered Los Angeles/Orange County bureau approved the branch-office plan at a private meeting Tuesday and will submit it to the Council of Better Business Bureaus in Alexandria, Va., by the end of the week.

Ted Aldershof, board treasurer, confirmed that if national approval is received, the Better Business Bureau Inland Cities will begin providing service to consumers in Los Angeles and Orange counties by paying for at least one office in each county.

Jim McIlhenny, president of the national council, said Wednesday that the group had not yet been contacted about the proposal.

“There are many steps any plan would have to go through,” McIlhenny said. He said he has not ruled out other options, including the opening of a new bureau or bureaus in Los Angeles and Orange counties by business leaders independent of the existing board.

McIlhenny said he has written letters to Los Angeles Mayor Tom Bradley and executives of major corporations seeking their suggestions and financial assistance.

“I’m giving the Los Angeles board a chance to come up with something before we do anything, but I haven’t heard anything yet,” McIlhenny said.

While the Inland Cities bureau, based in Colton, serves a smaller market, its 1987 budget of $750,000 and membership roster of 3,200 companies both exceed those of the ailing bureau for Los Angeles/Orange Counties.

Founded in 1928, the Los Angeles-based bureau at one time was the second-busiest in the nation. It is the first bureau in the nation to close its doors in 50 years.

By last week, the bureau had exhausted its 1987 revenues of $700,000. Many of its 3,000 members are unlikely to provide additional funds, according to William Fritz, the bureau’s president.

While details of the branch-office plan have not been divulged, Inland Cities BBB President William Mitchell said his bureau would move existing employees into new offices in Los Angeles and Orange counties and immediately start a fund-raising drive.

Fritz declined to comment on the plan. Gaylan Perrett, chairman of the Los Angeles/Orange County board, did not return phone calls.

Fritz said the failure of the local bureau was caused in large part by the defection of hundreds of member businesses bitter at being charged for advertising in an ill-fated BBB Consumer Guide and Directory.

Publisher Fails

The two-county BBB sponsored publication of the guidebook each year in 1983-86. Last year, however, the publisher, Better Books of San Francisco, sought bankruptcy court protection after delivering only about 50,000 of the 250,000 books that advertisers had been told would be circulated.

The controversy escalated when the bureau insisted on billing members for the full cost of their ads in an unsuccessful effort to salvage the project.

Terry Hilliard, former president of the Bakersfield BBB, said the Los Angeles-based bureau was aware of problems with Better Books as early as 1984, but continued to sponsor the annual guidebooks, along with many other bureaus in the state.

In 1984, the Kern County district attorney’s consumer fraud division reached a $12,500 consent agreement with Better Books after charging the publisher with failing to deliver the promised number of BBB consumer guides published for the Bakersfield bureau that year.

“In newsletters, the national council and I informed offices across the state and the nation that they should cancel their contracts (with Better Books),” Hilliard said. “But they didn’t.”