Black Truckers Allege Freeway Firm Is a Front

A small, black-owned firm in line for a $10-million dirt-hauling contract on the Century Freeway project actually is a front for a larger, white-owned company, according to complaints filed by two black truckers and a watchdog group that oversees minority hiring for the project.

The allegations that Gueno Development Co. of Los Angeles is being used to skirt equal opportunity hiring regulations have stirred up a controversy that could delay completion of the $2-billion freeway for six months or more and result in hefty cost overruns, state officials said.

The complaints, filed with the California Department of Transportation, allege that Gueno is fronting for Roadway Construction Co. of Newport Beach. Roadway is a large general contracting company specializing in excavation and dirt hauling. Roadway owners deny that Gueno is a front for their company.

Government affirmative action regulations and a federal court order require that at least a third of the work on the 17-mile east-west freeway through South-Central Los Angeles must go to qualified disadvantaged minority-owned and women-owned firms.

“The rules were set up to make sure that minority contractors at least get some of that (contract) money . . . but this isn’t happening,” said Shelly Mandell, chairman of the Century Freeway Affirmative Action Committee.

The watchdog committee--appointed by the federal court to ensure that equal opportunity goals are met--wants more minority truckers to get a shot at this big dirt-hauling contract.

But Caltrans officials overseeing the federally funded project said Gueno is a legitimate minority-owned firm. They contend that the watchdog committee has overstepped its bounds in challenging Gueno’s status.

“They think that everybody with a wheelbarrow and a shovel should have a job,” said Jack Hallin, Caltrans deputy district director. “That’s not the way it works.”

The controversy focuses on a $52-million prime contract that Caltrans was to award Ball, Ball and Brosamer Inc. of Danville, Calif., early in January. The firm listed Gueno as a minority subcontractor to meet the required equal opportunity goals.

According to terms set out in the 1981 federal court consent decree that governs the affirmative action program on the big freeway project, the watchdog committee has the right to challenge any prime contract that it believes does not meet the court-set minority-hiring goals. The state must then hold a hearing to determine the validity of the challenge.

If the challenge is ruled valid, highway officials must act to make sure the minority goals are met. They can substitute another minority subcontractor, or throw out the contract and rebid the job. However, if the complaints are ruled invalid, the state can award the contract, unless blocked by appeals that can take months to resolve.

Caltrans has scheduled a public hearing for Tuesday. The controversy has already set the start of work on this contract back several weeks. Any appeal would delay the scheduled September, 1993, opening of the Century Freeway until the spring of 1994, officials said. Such a delay could add $2 million or more to the cost of the project.

Gueno Development is owned by Andre Gueno, who is black. It is a small company that leases office space from Roadway. Gueno has only one truck and three employees, records show.

“I am not a front for Roadway,” Gueno said in a brief interview. He refused to say anything more.

The subcontract calls for the removal of 2.6 million cubic yards of dirt and hazardous wastes from an illegal landfill found in the freeway right-of-way. To complete the work, the firm would have to lease 30 to 50 “belly dumper” trucks and trailers, state experts said.

Gueno is being used by Roadway to secure a lucrative contract that was earmarked for minority or women truckers, according to the complaint filed with Caltrans.

“Gueno Development has . . . strong ties with Roadway Construction,” Andrew Delgado, executive director of the Century Freeway Affirmative Action Committee, complained to the state.

A subcontractor can be certified for such work by Caltrans only if the firm is at least 51% owned by a disadvantaged ethnic minority or a woman. The certified owner must also control and actively manage the company.

If Gueno is awarded the dirt-hauling subcontract, the affirmative action committee contends, then dozens of certified minority and women haulers living and working in the freeway corridor will not get the work, as the court intended.

Gueno has been properly certified annually, over the repeated objections of the committee, state officials said. Each time the committee has raised its objections against Gueno, the company has agreed to comply, Hallin said. But the committee contends that Gueno never follows through on its promises.

Roadway officials and Andre Gueno deny that Gueno Development is fronting for Roadway. Roadway’s owners acknowledge that they helped Gueno get into business and they said Roadway leases Gueno office space. In addition, they said, Gueno sometimes works for them, leases Roadway trucks and sometimes uses Roadway drivers.

State records show that Roadway is jointly owned by a father and son, Thomas M. Hess, 69, of Sacramento and Thomas D. Hess of Newport Beach. According to the records, the senior Hess also owns one-third interest in Gueno Development. The younger Hess is listed as Gueno’s treasurer.