Reforms in Minority Contracting Demanded : Transit: RTD president orders drafting of changes after disclosures in The Times of abuses in construction program.

The chief of minority contracting for the Southern California Rapid Transit District was ordered Friday to recommend reforms in a federally mandated program intended to steer transit construction work to disadvantaged businesses, and to explain why the program has not been more aggressively monitored by the RTD.

RTD President Nikolas Patsaouras ordered Walter Norwood, head of the district’s office of economic opportunity, to prepare recommendations for reform legislation in the wake of disclosures in The Times detailing abuses in the program, which is supposed to help struggling firms operated by women and members of racial and ethnic minority groups.

“I asked Norwood, by the end of next week, to frame a legislative agenda and also to address any issues (in the Times series) that were critical of the RTD,” Patsaouras said, adding he expects direct responses. “I don’t want smoke and mirrors,” he said.

Patsaouras said the report would be presented to the RTD board next month.

The Times’ series reported that tens of millions of dollars meant for businesses owned by minorities and women have been going to firms that do not appear to be disadvantaged or allegedly have acted as fronts for non-minority firms.

The RTD and the Los Angeles County Transportation Commission have been in charge of constructing the $7.5-billion transit system that is slated for completion by the year 2010.

Patsaouras said he has also asked the commission to help draft reform legislation.

The Times found that loopholes in federal regulations appear to allow companies that are not owned by disadvantaged individuals to receive lucrative minority subcontracts.

“It is an undisputed fact that minorities need a break--but the rules under which public agencies such as the RTD and (the transportation commission) operate are flawed,” Patsaouras said in a prepared statement released by RTD officials. “We commend The Times for shining a spotlight on those areas. We hope those with the power to make changes in Sacramento and Washington, D.C., will do so.”

In addition to loopholes in regulations, The Times found that the program was not working properly because the RTD and the transportation commission failed to communicate with each other, were slow to enforce rules, were sometimes unaware of important federal regulations and interpreted regulations differently.

The commission, for example, requires a minority contractor applicant to possess a state contractor’s license before being certified for the program, but the RTD does not.

“It’s nonsense,” Patsaouras said of the district’s failure to require such a license. He also said that RTD officials should be more aggressive and use common sense in monitoring the program.

“If the staff says the law is ambiguous,” he said, “I would rather they do what they thought was right and let the aggrieved party sue us. . . . If in (their) opinion, the (applicant) is not a legitimate minority, let’s test it . . . and let him challenge it. . . . At least we’ll make a statement rather than hiding behind federal rules.”

Patsaouras said he has long believed minority certification for work on the transit project should be handled by only one agency to prevent duplication and inconsistency.