Dixon Defends Wife’s Minority Business Dealings
The chairman of the House Ethics Committee on Tuesday defended his wife’s participation in a minority business enterprise at Los Angeles International Airport, asserting that she did not receive favoritism and was “very well qualified for this type of operation.”
At the same time, Rep. Julian C. Dixon (D-Los Angeles), whose committee investigated alleged ethics abuses by recently resigned House Speaker Jim Wright, insisted there was no connection between his wife’s airport business and a lucrative contract awarded by the Ethics Committee to the Los Angeles law firm of Johnnie L. Cochran Jr. Cochran is a member and former chairman of the Airport Commission.
“I don’t know all the criteria involved in such contracts,” Dixon said, referring to the airport concessions franchise granted to his wife and a group of other minority investors. “But I must point out that the Airport Commission approved this contract. . . . And I have intentionally stayed out of it. I have never discussed with anyone, including Johnnie Cochran, anything about Betty Dixon’s business.”
The Times and two other news organizations, the Associated Press and the Wall Street Journal, reported Tuesday that Betty Dixon earned more than $150,000 over the last two years on concession contracts at the airport on an initial investment of less than $15,000 in 1986.
She derived the income by investing three years ago in two minority business firms that qualified for airport work under a government program for minority- and women-run enterprises.
“I’m emphatic in telling you that Betty Dixon is very well qualified for this type of operation,” Dixon said in an interview, citing her retail experience with a gift shop she operated in Washington.
However, Betty Dixon acknowledged to The Times that she did little of the hands-on management work in the airport enterprises intended by the government program.
In addition, the Wall Street Journal disclosed that the Ethics Committee earlier in 1986 awarded a contract to Cochran’s Los Angeles firm to lead a staff investigation into alleged financial irregularities involving former Rep. Fernand J. St Germain (D-R.I.). The panel’s investigation concluded in April, 1987, with no charges being filed against St Germain.
Tells of Recommendation
Dixon said that he had recommended Cochran, a longtime friend, for the job but that “he was interviewed and hired by the committee, not by me.” He said Cochran’s fee was $170,000 for about 14 months of work.
“Much of the investigation centered in Los Angeles and he was eminently qualified for the job,” Dixon said. “He was formerly assistant district attorney of Los Angeles County.”
Cochran also told The Times that the concession contracts and his committee appointment were unrelated. Cochran, who was Airport Commission chairman when the concession agreements were approved, said he and Dixon “never discussed his wife’s business. That wasn’t relevant to anything we talked about.”
At the time the concession franchise was awarded to Duty Free Shoppers, the prime contractor that had a joint venture with the minority firms, “we had no knowledge at all of Betty Dixon,” Cochran said. “She never appeared in records or anything.”
House Speaker Thomas S. Foley, who succeeded Wright in the top House post last week, came to Dixon’s defense Tuesday.
“As far as I know, there is no impropriety of any kind,” the Speaker said, adding that Betty Dixon’s contract seems to be “a proper business arrangement.”
Los Angeles airport officials have said they will review the concession contracts to determine whether they are legal and meet the intent of the city’s minority contracting policy.
Case May Be Reviewed
Irene Mields, senior attorney on the Federal Aviation Administration’s general counsel staff, said the agency probably will review the case based on the recommendations of airport officials.
One question at issue is how much work Betty Dixon did for her pay. Regulations published by the FAA’s civil rights office state that officers of minority firms should serve in a hands-on management role and gain actual work experience. Absentee ownership is frowned upon.
Betty Dixon, a director of the two firms, Mir Kanon Inc. and Peideau Inc., acknowledged in an interview that aside from attending periodic board meetings in Los Angeles, she has done no actual work at the airport concessions owned by the firms.
A Washington resident, she spent most of her time in the capital while operating her gift shop, Much Ado About Something Inc., and now distributes advertising novelties from an office here.
Her husband said that she intends to work at the facilities this summer.
“What she wants to be able to do is bid independently on an airport concession someplace,” Dixon said. “She realized that the only way to do that was first to get involved in a joint venture.”
One of 10 Partners
Betty Dixon was one of 10 partners recruited by Duty Free Shoppers Group Ltd. Partnership, the world’s largest duty-free concessionaire, to boost its minority and female participation and improve its chances of winning contracts to operate gift shops at the airport.
Among the charges the Ethics Committee lodged against Wright this spring after a yearlong investigation of his financial affairs was that his wife received an $18,000-a-year salary, use of a condominium and a car from a Fort Worth, Tex., firm while doing little work. The committee charged that the income should have been reported by Wright as a gift.
Another issue is that while FAA guidelines favor local business people for minority contracts, three of Betty Dixon’s partners live in Atlanta and--like her--do not appear to fit the usual minority-business qualification of “socially and economically disadvantaged individuals.”
All are highly successful businessmen--Jesse Hill Jr., president of Atlanta Life Insurance Co.; Herman J. Russell, president of H.J. Russell Co., the nation’s largest black-owned construction company; and Felker W. Ward Jr., a prominent attorney.
Atlanta Activist
Hill has been a major force in Atlanta for decades. He played a key role in formulating civil rights strategy in the 1950s and 1960s and in the city’s commercial and political life. Russell, a longtime friend of Hill, was the first black to serve on the Atlanta Chamber of Commerce. Russell’s company was the fourth-largest black industrial firm in the United States in 1987, with revenues that year of $141.9 million.
Ward now has his own investment banking firm, called Ward & Associates Inc. In September, 1988, he was elected to the board of the Atlanta Gas Light Co., the largest natural gas distribution company in the Southeast, serving more than 1 million customers in 215 Georgia communities. The three men, who are 40% owners of the duty-free shop at Atlanta’s Hartsfield Airport, did not return calls from The Times.
Times staff writers Glenn F. Bunting and Rich Connell in Los Angeles and David Treadwell in Atlanta contributed to this story.
