Transportation Official Fined Over S.D. Votes

The state’s political watchdog agency Tuesday fined California Transportation Commissioner J. Thomas Hawthorne of Escondido $165,000 for voting on San Diego County freeway projects that translated into additional business for his exclusive Caterpillar heavy equipment dealership in Kearny Mesa.

The fine is the second-largest ever assessed against a public official by the Fair Political Practices Commission. It was approved Tuesday by the agency’s five-member board as part of a settlement in which Hawthorne admitted his dealership and related firm grossed at least $148,000 from $61.5 million worth of San Diego transportation projects he voted to approve from 1987 to 1989.

The settlement of the 18-count civil lawsuit also concludes a two-year investigation by the agency into a bizarre case in which the influential San Diego County Republican for years openly defied FPPC warnings to refrain from voting on local projects because of the overwhelming probability that construction firms chosen for the work would rent or buy Caterpillar equipment from his firms.

“This case demonstrates an egregious conflict of interest, one of the most flagrant examples we have seen at the commission,” said FPPC Chairman Ben Davidian, who negotiated the settlement personally with Hawthorne at a July 30 meeting in Sacramento.

Davidian said that Hawthorne, who has publicly maintained his innocence, had a change of heart and agreed to pay the $165,000 fine after the agency threatened to file a lawsuit to recover nearly twice that amount in civil damages.

“In April, 1986, the FPPC warned Commissioner Hawthorne about this type of improper activity, but he continued to engage in it. This fine will serve as a strong warning to all public officials that the FPPC will deal sternly with this type of conduct,” Davidian said.

On Tuesday, Hawthorne continued to defend his votes, saying he only authorized the San Diego work, not which company would get the contract. Awarding the highway and trolley bids is up to the California Department of Transportation.

“I have no influence nor can I do anything to determine who gets the job,” said the 62-year-old Escondido businessman, who is president and majority owner of Hawthorne Machinery Co., the exclusive Caterpillar dealership in San Diego County since 1956, and Hawthorne Rent-It Service, an equipment rental yard.

But rather than fight a costly legal battle, Hawthorne said, he decided to pay the fines.

“Frankly, it’s wrong, but I can’t fight. It’s easier to just get it behind me and pay their fines,” he said.

In the settlement, Hawthorne admitted that he violated state conflict-of-interest laws when he voted to fund 14 highway construction projects in the county. All the projects were given to Hawthorne’s customers who frequented his heavy equipment sales and service businesses in San Diego. Hawthorne also admitted that he failed to disclose the identities of hundreds of large customers on his financial disclosure statements.

During a telephone interview, he acknowledged that he had not utilized proper reporting procedures on his disclosure statements.

“Yes, I did something wrong--but it’s more that I didn’t do something correctly,” said Hawthorne, who characterized the lawsuit as “unfair” and said the FPPC saw him as “a pigeon to get money out of.”

Hawthorne’s connections with the construction industry were well-known--even cited in his favor--when former Gov. George Deukmejian named him in February, 1984, to the powerful transportation commission, a nine-member panel responsible for allocating billions of dollars in freeway and transit improvements throughout the state.

At the time, San Diego civic leaders hailed Hawthorne’s appointment and said the San Diegan would make sure his home county received its fair share of the state’s transportation pot.

But The Times revealed in 1985 that Hawthorne’s votes on behalf of San Diego County also posed a conflict of interest. State law prohibits any public official from participating in a governmental decision if it is “reasonably foreseeable” that the outcome will have a financial effect on him or a source of income, such as a business customer.

The Times reported that, during his first 16 months on the transportation panel, Hawthorne voted to allow $55.8 million in San Diego County freeway and trolley improvements. More than 90% of that money went to his business customers, some of whom rented or purchased Caterpillar equipment specifically for the state work.

Hawthorne conceded at the time that it “crosses my mind” his votes could yield more business for his companies, yet he defended his actions by saying he only helped authorize money for the San Diego work. It was the Caltrans staff--not the commissioners--who actually chose the firm that would perform the work and get the money, Hawthorne said.

The FPPC disagreed. And, in a strongly worded letter, dated April, 1986, the agency warned Hawthorne to refrain from voting on local transportation projects if he wanted to avoid legal proceedings for conflict-of-interest violations. Any vote by him on a San Diego-related project was “almost a certainty” to benefit a customer, the FPPC said.

Somewhat chastened, Hawthorne followed the FPPC advice--for just one meeting. He soon began voting again on local transportation improvements.

By the time he was reappointed to the commission by Deukmejian and went before the Senate in January, 1989, for his second confirmation hearing, Hawthorne had voted another 52 times to allocate $164 million worth of San Diego projects.

At the urging of three San Diego County senators, the Senate disregarded Hawthorne’s problems with the FPPC and voted, 28 to 0, to reconfirm him for his current term, which expires in February. Among Hawthorne’s defenders was Sen. Wadie Deddeh (D-Bonita), who said it would be a “travesty of justice” to disqualify the Caterpillar dealer because of his business ties.

The FPPC, however, opened a new investigation of Hawthorne at the urging of Senate President Pro Tempore David A. Roberti (D-Los Angeles).

Although more than 50 votes were in question, the agency eventually focused on 14 cast by Hawthorne between April, 1987, and May, 1989, to approve nearly $61.5 million in local freeway projects.

The votes included authorization for the $10.4-million interchange connecting Interstate 8 with California 163 in Mission Valley, and $20.5 million to create marshland habitat and build freeway connections between I-5, I-805 and California 54 in the South Bay.

“We found that he had been voting when he shouldn’t be voting,” Davidian said about transportation panel decisions, all of which were unanimous and considered noncontroversial. “That flies in the face of everything the Political Reform Act is trying to prevent.”

Davidian said businesses awarded the $61.5 million of freeway work ultimately bought or rented an estimated $148,000 worth of equipment or service from Hawthorne for the state jobs. He said the amount is relatively small but still represents a direct benefit to the transportation commissioner’s business.

“If a company gets the freeway construction contract in San Diego, it is likely it will have some Caterpillar equipment. If they have to acquire some, they will have to acquire it from him. If they need parts or service, they would have to come to him,” said Davidian.

The probe also found that Hawthorne failed to disclose, as required by law, each of the several hundred business customers paying $10,000 or more to his companies for 1986 to 1989. Hawthorne’s disclosure statement for 1990, completed during the probe, shows 946 companies paid his firms $10,000 or more.

To defend himself in the probe, Hawthorne recently hired San Francisco attorney Vigo G. (Chip) Nielsen Jr., one of the foremost experts on political reform law. But Davidian said Hawthorne abruptly fired Nielsen and personally negotiated the settlement in a private meeting at FPPC offices in Sacramento last week.

Because Hawthorne says his construction business has been hard-hit by the recession, Davidian said the FPPC has agreed to let him pay the $165,000 in installments, with $25,000 due immediately and the balance to be paid when he leaves the commission in February.

Times staff writer Nora Zamichow contributed to this story.