L.A. Gave Sludge Contract Special Handling : City Hall: Chemfix was the highest bidder and the contracts were sped along. The mayor’s office denies doing anything improper.

A politically connected firm that Mayor Tom Bradley last year touted to New York’s mayor previously received a $12-million contract in Los Angeles under unusual circumstances, records and interviews show.

In 1987, Chemfix Technologies Inc. was selected to process and dispose of thousands of tons of Los Angeles sludge, although the company had submitted the highest bid. The contract and associated agreements were put on a fast track through City Hall with assistance from the mayor’s office, bypassing some standard reviews, The Times found.

Chemfix not only emerged with a contract, but the city agreed to pay emergency expenses of $1 million to develop a processing site for the company on public land--a facility the firm was allowed to use rent-free through most of its contract, records and interviews show.

Attention focused on Chemfix and the mayor’s involvement with the firm last month, after New York’s Newsday disclosed that Bradley had written to New York Mayor David N. Dinkins praising the company. Chemfix was part of a venture seeking a $210-million sludge-handling contract in that city.

Bradley’s March, 1990, letter lauded Chemfix’s “reliability and flexibility,” but did not mention the high costs and management problems that Los Angeles officials say led to termination of Chemfix’s contract two months earlier.

Chemfix’s board of directors includes Democratic Party national Chairman Ronald Brown, a political acquaintance of Bradley’s. The firm hired one of Bradley’s closest former aides and fund-raisers, Frances Savitch, as a lobbyist in Los Angeles.

Through a spokesman, Bradley has denied doing anything improper, saying he merely wrote a letter of introduction.

Public works officials and Bradley’s office said last week that Chemfix received no political assistance in winning its two-year Los Angeles contract.

It was necessary to expedite the Chemfix contract, officials said, because the city faced a pressing sludge disposal problem, as well as a federal order to halt sewage dumping in Santa Monica Bay.

Just weeks before the contract was approved, the city shut off its ocean outfall at the huge Hyperion Sewage Treatment Plant and began trucking more than 1,000 tons a day of sewage sludge to landfills outside the city.

Officials said that only Chemfix could rapidly provide an alternative to the landfills, which Los Angeles officials feared could be closed by rainy weather or political controversy over sludge dumping.

“It would not have been prudent to stop sludge dumping without our knowledge that Chemfix was quickly coming on line,” said Bill Chandler, Bradley’s press secretary.

In retrospect, it is not clear whether the Chemfix contract was essential. Doug Walters, a city sanitation engineer who oversees sludge disposal, said the city never was shut out of its landfills.

“We didn’t need insurance (of the Chemfix contract) as it turned out,” said Ray Kearney, who headed the sludge management effort when Chemfix was brought in.

Interviews and a review of records indicate that Bradley and his office gave special attention to the Chemfix contract.

Then-Deputy Mayor Michael Gage said in an interview that he was deeply involved in the hectic 1987 effort to end sewage spills and ocean sludge dumping--damaging issues for Bradley as he geared up for a 1989 reelection campaign.

“As a political issue,” Gage said, “the metaphor of a crumbling city is very real.”

Gage said he met with Chemfix officials sometime before they received the city contract, but only to hear about their treatment process. Both Gage and Bradley, through a spokesman, said they were unaware until recently of Democratic Party leader Brown’s ties to the firm.

A spokeswoman said Brown had no contact with Los Angeles officials about the contract. Chemfix officials did not respond to several requests for interviews.

Gage said he made phone calls to help secure Chemfix’s processing site on Los Angeles International Airport land, near the Hyperion plant that generates most of the city’s sludge.

Shortly after the contract was signed--but well before it was clear whether the company could deliver all it had promised--Bradley appeared at a news conference with Chemfix officials at Hyperion. Bradley praised Chemfix, calling the firm’s technology a “keystone to the city’s strategy to stop (sludge) dumping in the ocean” and a “miracle.” Chandler said the latter remark was a layman’s reaction to Chemfix’s plan to “convert human waste into harmless clay.”

Former Bradley aide Savitch told The Times in a 1988 interview that, as a Chemfix consultant, she helped arrange the news conference and rode to the event with the mayor. “It’s always neat to ride with the mayor,” she said, but added that “looking back on that it may have been a mistake; that may engender some resentment.”

Savitch could not be reached for comment last week. A business associate said Savitch was hired after Chemfix had been selected by Los Angeles.

Savitch’s high-profile association with the firm and the mayor’s office’s involvement did engender suspicions that the Chemfix contract was getting special handling, City Hall sources said.

One manager familiar with the Chemfix contract said it appeared that the mayor’s office pushed the contract in part because of the political concerns about setbacks in a experimental, $350-million sludge treatment and burning facility at Hyperion.

That troubled project, dubbed the Hyperion Energy Recovery System, or HERS, was supposed to have begun burning most of the city’s sludge years earlier, but was far behind schedule and encountering major technical problems. Even today, HERS can dispose of only a portion of the sludge planned.

Chandler, Bradley’s press secretary, denied that political motives figured in the handling of the Chemfix contract, and he noted that public works officials sought the bids for the contract. “I don’t think you can say anything was forced upon anyone,” he said.

Chemfix’s contract called for the firm to chemically treat the city’s sludge, converting it into an inert material that could be sold to landfills to cover garbage.

In August, 1987, the company was the highest of five bidders--at nearly $50 per ton--that responded to the city’s request for innovative sludge disposal proposals. However, when other factors were considered, the firm was ranked second.

City officials elected to negotiate with Chemfix and the top-ranked firm, H. Clay Kellogg Inc., which proposed to compost sludge in the Harbor area at a cost of almost 25% less than Chemfix.

Kellogg did not receive any city business because it never was able to secure a site, even with assistance from city officials, said the firm’s president, H. Clay Kellogg.

Only Chemfix got a site, in part because it needed less land than Kellogg, officials said. Initially, city officials demanded that Chemfix find its own site, but the firm pressed the city to provide land near Hyperion and prevailed, officials said.

“The only reason we gave in and didn’t continue negotiating was because of our operational needs,” said Harry Sizemore, a top Bureau of Sanitation executive who headed the city’s negotiating team. He said the city had only a few days of sludge storage capacity.

In December, 1987, the mayor’s office and sanitation officials raced through approvals for a sludge treatment facility at the west end of the airport. The city also agreed to pay about $1 million in improvements for the temporary site, Sizemore said.

In the rush to get Chemfix operating, standard contract and environmental reviews were not performed and Chemfix received the city land rent free for the first 18 months of its two-year contract, said John Malloy, an airport department real estate agent. The airport began charging $7,400 per month for the site in 1989.

The Chemfix contract also bypassed a routine independent review by the city administrative officer because one was not requested by the mayor’s office.

“We were trying to fast-track everything,” said Gage, now a television commentator and president of the Department of Water and Power board.

Sanitation officials said the higher costs of Chemfix’s contract were justified partly because the company would turn sludge into something environmentally safe, useful and salable.

For the first five months of the contract, Chemfix did not obtain necessary state approvals to sell its treated sludge as a landfill cover material. Instead, the treated sludge was dumped in a Valencia area landfill, with the city picking up tens of thousands of dollars per month in added dump fees. “It took longer than we expected,” said Sheila Molyneux, the city’s sludge management director.

Beginning in June, 1988, Chemfix’s material was used as a landfill cover at a public dump in Ventura County and a number of problems arose, including odors.

Ventura sanitation officials said they planned to stop accepting the Chemfix material from Los Angeles if the firm had not lost its Hyperion contract.

Los Angeles dropped Chemfix in January, 1990, because of cost, odor and management problems, city officials said. Another firm is chemically treating the sludge at a savings of $2 million per year, officials say.

Despite Chemfix’s problems, Molyneux and other sanitation officials said the firm’s process was technically a good one and the firm stepped in and provided a needed service.