Facing Scandal, BART Lays Plans for Major Expansion

Sixteen years after it opened, the Bay Area Rapid Transit system seemed headed for its first major expansion. After much political maneuvering, BART this month announced an ambitious plan to extend the state’s largest regional rail system to the San Francisco Airport and further into the East Bay.

On Friday the California Transportation Commission committed $248 million to the expansion over the next 10 years, but BART still needs support from voters and government agencies to ensure full funding.

So, still-unfolding revelations of cost overruns, labor troubles, political infighting, and a widespread bid-rigging scandal among BART’s middle managers could hardly come at a more inopportune time.

After a three-year FBI sting operation aimed at the rail system’s contracting procedures, three BART officials have been charged with accepting kickbacks in exchange for lucrative contracts.

Last Monday the head of BART’s mechanical maintenance department, Helder Simas, pleaded not guilty to federal charges of bribery, mail fraud and conspiracy.

According to papers filed in federal court in San Francisco, Simas and two BART colleagues, former maintenance manager Arnold J. Flores and former contract supervisor Hilario (Frank) Gomez allegedly arranged kickbacks from more than a dozen East Bay firms seeking contracts to supply train hardware, office supplies, electrical components and other items.

Five of the firms were actually FBI fronts. Flores has pleaded guilty to bribery charges. Gomez has not entered a plea. A Bay Area contractor, Paul Medina, also has been charged, and more arrests are expected.

At the same time, BART’s real estate division is under investigation by the FBI for possible misuse of public funds. Last month federal agents raided the division’s downtown Oakland offices, seizing piles of documents relating to about $25 million in BART land purchases.

FBI spokesman Chuck Latting described the raid as a spinoff of the FBI’s sting operation into maintenance contracts.

Earlier, emerging reports of the bid-rigging scandal were upstaged when a labor dispute between BART and a union representing 1,200 of its employees threatened to paralyze Bay Area transportation two weeks ago. A strike was avoided, but not before members of the BART board of directors voiced accusations of mismanagement, often aimed at the general manager, Keith Bernard.

BART officials admit that the reports of scandal and unrest may jeopardize plans for expansion of the rail system, which carries 200,000 commuters daily.

A proposal for a half-cent sales tax increase faces voters in one East Bay county, Contra Costa, in November. If it passes, the tax would raise $178 million for new tracks. A similar measure passed in San Mateo County, site of San Francisco Airport, last June.

“What has happened to us concerning the FBI investigation could not have come at a worse time,” BART spokesman Sy Mouber said. “The potential strike, the FBI investigation, these things are surely going to impact to some degree on the upcoming vote.”

Mouber said a rejection of the sales tax increase might cause the federal government to take a “good hard look” at the rail system’s bid for matching funds.

BART’s plan calls for $442 million in federal money to help build the airport extension. The Urban Mass Transportation Administration is reviewing BART’s finance application.

In another potential embarrassment, on Friday the Alameda County Grand Jury confirmed that it has requested documents of BART financial records as part of an inquiry into its directors’ spending practices.

And last week the manager of BART’s real estate department was suspended after it was disclosed that before going to work for BART he was convicted of defrauding Hartford, Conn., in procuring loans for a development company he owned.

Project Falls Behind

Problems have also dogged projects to increase efficiency on BART’s existing 71 miles of rail lines. A sophisticated tracking system that was intended to replace the train’s aging central computer is running five years late and $25 million over budget--even though the system has been scaled down.

“We’re not even sure it will work when we do get it,” BART board member Nello Bianco said.

The other improvement project, a plan to add 150 new cars to the rail line, lags about three years behind schedule. Within BART, there is dispute over what needs to be done.

Board President John Glenn, a member of the board for nine years, blames BART’s woes on a management structure that distances general manager Bernard from his subordinates.

“I think the general manager is brilliant at planning and acquiring funds, but is not as strong a person as he should be in managing employees,” Glenn said. “His method of management is that he has several department heads reporting to him but he has no one who can go check on the department heads.”

Shortly after the FBI announced the partial results of its probe, BART management called for an audit of 20 middle managers who had authority to issue contracts.

In addition, Bernard toughened a liberal contracting policy that allowed mid-level managers to award contracts for less than $10,000 without undergoing a competitive sealed-bid process. Now all contracts must be approved by Bernard.

Board member Howard Abelson said that the board has made it very clear to Bernard that the managerial structure needs further changes.

Offers Assessment

“My feeling is that the general manager tries to take on too much by himself,” Abelson said.

Bianco credits Bernard with having helped to prevent a strike that would have posed “one of the most serious problems in the Bay Area in the last century.” But he echoed the criticisms of his colleagues.

“I’ve insisted for many years that Keith Bernard reorganize the district he inherited,” Bianco said.

Bernard declined to be interviewed for this report.

Five members of BART’s nine-member board of directors face reelection in November. Some have speculated that Bernard’s job could be in jeopardy if the directors are replaced by newcomers less favorable to him. In turn, there has been criticism of the board by its own members.

“Too many people on the board have agendas which don’t match the public good,” said director Barclay Simpson, who is retiring in November. “They have their own personal agendas. There is far too much intrigue and infighting on the board.”