L.A. Parking Tickets: Role of Firm Is Questioned

A year ago, when Los Angeles contracted with Datacom Systems Corp. to collect delinquent parking tickets, the company projected it could collect 5% to 10% of the city’s unpaid citations.

Now, with unpaid fines reported at nearly $249 million, the company has collected $5.6 million--slightly over 2%--and has not yet resorted to the aggressive ticket collection methods spelled out in the contract.

Some elected officials are asking whether more money could be collected, especially now that the city faces fiscal problems.

Mayor Tom Bradley recently ordered the city’s Department of Transportation to report by this week on the status of collection efforts, and some City Council members recently have questioned whether the contractor has done an adequate job.

“Their performance has been inadequate,” said Councilman Nate Holden, who chairs the council’s Traffic and Transportation Committee.

“Even if we were able to get 20% of $250 million, that’s . . . $50 million,” said Councilman Zev Yaroslavsky, chairman of the Finance and Revenue Committee. “That could go a long way to dealing with our budgetary problems.”

City parking officials praise the contractor’s collections approach and note that 70% of the tickets written each year are paid.

Much of the outstanding $249 million is uncollectable, parking officials say, because the owners of the ticketed vehicles cannot be identified.

“It’s like milking blood out of a turnip,” said Jay Carsman, the city’s parking ticket coordinator.

Datacom, currently known as Lockheed Information Management Services Co., has been paid $32 million to process the city’s parking tickets since 1985 and has received at least $1.3 million more to collect delinquent tickets in the last year. The contract comes up for renewal later this year.

Lockheed already has come under fire for its ticket collection efforts in Los Angeles. Last year, the city received a storm of complaints after the company sent 50,000 ticket notices to people who did not own the vehicles when the parking citations were issued.

Lockheed Information Management Services, a Teaneck, N.J.-based subsidiary of defense contractor Lockheed Corp., has been no stranger to controversy. When it was called Datacom, the company was implicated in the political corruption scandals of New York City four years ago. One former city official and a local Democratic leader were convicted of paying bribes to obtain business for Datacom, and a former president of the company testified that he had authorized bribe payments.

The company, though not charged with any crime, lost its contract in New York City and suffered negative publicity around the country.

Since 1986, the company has installed new leadership, instituted an ethics program and made a number of other changes, according to Thomas J. O’Neil, Lockheed Information Systems senior vice president.

“It was a very difficult time,” O’Neil said in an interview. “It probably served to make us tougher and better.”

While becoming an acknowledged leader in the municipal parking industry, Lockheed has lobbied energetically for contracts in several cities and has hired a number of former government officials.

Since 1983, Lockheed/Datacom and its officials have contributed at least $71,400 to city and county elected officials in Los Angeles, with about half of the money given to Bradley, campaign records show. The company also has hired Julie A. Sgarzi, who served as a transportation aide to Bradley from 1977 to 1981.

As a regional vice president for Lockheed, Sgarzi served as project manager when the company signed its five-year contract with the city in 1985. She is now a senior vice president. Last year, the mayor appointed Sgarzi to the Cultural Affairs Commission.

The current head of Lockheed’s Los Angeles office is Edgar Hayes, who previously was director of data processing for Los Angeles County. Lockheed holds a $2.6-million, three-year contract with Los Angeles County to process parking citations for county unincorporated areas and several cities, according to county officials.

“We have hired folks from the public sector,” said O’Neil, who himself had been a Boston official before he went to work for Datacom in that city. “How better to understand the process? It is logical, ethical, and moral.”

The company currently processes parking citations for 100 U.S. cities or counties, O’Neil said, including Boston, Washington and New Orleans.

At least 250 cities and counties contract out such services, according to Marie Witmer of the Institutional and Municipal Parking Congress, a Virginia-based clearinghouse on parking issues.

Lockheed’s relationship with Los Angeles began in the early 1980s when the City Council sought to increase revenue by centralizing the city’s fragmented parking enforcement, citation processing and collections system. In 1983, the council selected Datacom and a consultant, Brophy & Associates, to perform a study that led to the current system.

Brophy & Associates was headed by John Brophy, now president of Lockheed Information Management Services. A former Washington parking official, he has marketed the idea that cities could make a lot of money through centralized parking management combined with aggressive ticketing, towing and use of metal “boots” to immobilize cars with several outstanding tickets.

Over the last decade, his ideas appealed to officials in a number of cities facing increasingly tight budgets, including Los Angeles. In 1984, the mayor and council decided to implement the Brophy/Datacom concept. The next year Datacom won a five-year contract to implement its own plan, beating out three other bidders.

Since 1985, the number of tickets issued by traffic officers employed by the city’s Department of Transportation has quadrupled to 4.3 million, and revenue has climbed from $18 million in 1984 to $90 million in 1989.

Under its contract, Lockheed uses its computer system to process tickets and track payments, and the company staffs the city’s payment offices. The company is paid $1.18 to $2.48 to process each ticket, whether the fine is paid or not.

In January, 1989, the City Council approved a contract amendment authorizing Lockheed to collect fines on delinquent tickets for a 30% commission. The city attorney ruled the contract award could be made without competitive bidding.

When the contract was awarded, officials who oversee parking collections told the council that the city had 800,000 unpaid citations amounting to $35 million.

Recently, officials told The Times that there are 5.4 million unpaid citations worth nearly $249 million.

When asked how much money is collectable, city officials and Lockheed have provided estimates ranging from $35 million to $162 million. They said the amount would be clarified in their report to the mayor.

City Council President John Ferraro said through a spokesman last week that he is “totally surprised by the disparity in numbers and wants an investigation into the facts.”

“Thirty-five million dollars is a far cry from $249 million,” Holden said. “My question is what are they talking about?”

Holden voted against the additional contract award because of Lockheed Corp.’s past business ties to South Africa.

Lockheed’s 1989 agreement with the city said the company could pursue an array of ticket collection strategies such as skip-tracing--a method of finding valid current addresses--and making telephone collection calls.

But since then, Lockheed’s collection efforts have been limited to sending letters to non-paying parking violators.

City parking officials say they jointly decided on a strategy of sending letters as a first stage of collection before resorting to more aggressive methods.

“That strategy is in the process of being reviewed,” said Parking Administrator Robert Yates, who oversees the contractor’s operations for the city’s Transportation Department.

The Times recently reported that 75,000 vehicles had five or more tickets, and that the top violators each owed several thousand dollars in fines.

After inquiries from The Times, prosecutors from the city attorney’s office met with parking officials to consider ways to seek payment from the worst parking violators, some of whom have up to 200 tickets.

Assistant City Atty. Maureen Siegel, acting chief of criminal operations, said: “We’re looking at prosecution remedies, civil remedies and legislative changes that could impact our ability to collect a larger percentage of unpaid fines.”

Lockheed’s contract with the city expires this fall. Lockheed has submitted proposals to win the new contract, along with Andersen Consulting, a division of Arthur Andersen & Co., and Tixon Corp. of Detroit.

Times researcher Cecilia Rasmussen contributed to this story.