Law Firm to Audit RTD Contracting : Minorities: An outside agency will examine programs after allegations that work went to companies that did not qualify.

Southern California Rapid Transit District officials said Tuesday that an outside law firm will audit its minority contracting system after news reports that millions of transit dollars earmarked for firms owned by minorities and women have gone to alleged minority “fronts” or to companies that were not disadvantaged.

“We have to address the issues raised by the Los Angeles Times,” said RTD Board President Nikolas Patsaouras. Rather than conduct an in-house review, the district decided to hire an outside law firm to get an “objective view “ of the program’s problems, he said. The firm has yet to be named.

The RTD and the Los Angeles County Transportation Commission are building a $7.5-billion rail transit system that will link five Southland counties in a 300-mile rail network by the year 2010. Equal-opportunity programs administered by the transit agencies require that prime contractors must make a “good faith” effort to subcontract 20% of the work to disadvantaged firms.

Commission officials say they are attempting to improve that agency’s minority contractor program as a result of The Times’ findings.

Neil Peterson, commission executive director, said his agency hired an experienced administrator in minority contracting late last year, has helped to form an interagency organization to help local agencies keep track of minority “fronts” and is setting up a hot line to report abuses and answer questions about the program.

“We knew the (Times) articles were coming,” said Peterson, “so we’ve really been taking a look at what we can do for a long period of time.”

A Times investigation revealed that because of transit agency policies, bureaucratic confusion and loopholes in the federal regulations, some companies that were not owned by disadvantaged individuals appear to have won at least $50 million in minority subcontracts.

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