Calls Grow for Review of O.C. SuperBus Deal : Transit: Officials seek answers after suits surrounding company and its officers come to light.

A chorus of officials joined the call Friday for an investigation into the finances of a company that holds a $4-million non-competitive agreement to build “SuperBuses” for the Orange County Transportation Authority.

“I’m totally supportive of a review,” said Santa Ana Mayor Daniel H. Young, who serves on the 12-member OCTA board.

“If we’ve got to buy equipment that we have to live with for the next 15 years, we have to know that we’re dealing with a company that’s going to be there over the long haul,” Young said. “What if this turns out to be a lemon?”

Board of Supervisors Chairman Roger R. Stanton--who also chairs the OCTA board--directed transportation staffers to review the agency’s contract with SuperBus Inc. after The Times Orange County Edition found that the firm had been accused of failing to pay its rent and that some officers were being sued for fraud in unrelated business deals.

SuperBus Chief Executive James F. Elder, who has previously said that the fraud allegations are untrue and insisted that his Northern California firm will have no problem delivering the buses, could not be reached for comment Friday.

However, SuperBus founder Joseph M. FitzGerald, a Buena Park inventor who patented the vehicle design but is no longer affiliated with the company, defended his product and the firm.

“It’s the right thing to do,” FitzGerald said of OCTA’s Oct. 17 decision to order 10 of the 58-passenger vehicles. “And it would be a terrible loss for the public if it is denied the chance to use them as passengers and benefit from their efficiency as taxpayers.”

Several OCTA board members, including San Juan Capistrano City Councilman Gary L. Hausdorfer and Los Alamitos City Councilman Robert P. Wahlstrom, said Friday that they supported Stanton’s call for a review.

And Supervisor Gaddi H. Vasquez said that county staffers should routinely conduct background checks on the people and firms with whom county agencies do business.

“I think the financial stability and background of a company, coupled with the ability to produce, should be important components in any project,” Vasquez said.

Stanely T. Oftelie, OCTA’s chief executive officer, said he intends to meet next week with his top administrator, James Kenan, to review issues raised about the company in The Times report on Friday. Oftelie said he will then meet with John Catoe, operations supervisor at the Orange County Transit District, a division of OCTA.

Stanton came close Friday to calling for the OCTA to rescind the SuperBus contract, in part because the company plans to build a new factory in Baja California, Mexico.

“We should not have given (SuperBus) a contract to enable them to build a production plant that they should have had in the first place,” Stanton said.

Furthermore, Stanton said, “we should know what a company’s financial history is. . . . All of the things in The Times article should have been known to us and they weren’t.”

Supervisor Thomas F. Riley, who also serves on the OCTA board, said he is trying to “steer clear” of the issue and declined to comment on any issues raised by The Times story.

“I don’t like to second-guess staff,” Riley said. “I’m comfortable with” OCTA’s efforts.

Dana Reed, the OCTA’s public non-voting member, urged that the financial review be handled quickly so that the buses can be placed in service as soon as possible.

“I want to look at this from the perspective of the people who ride these buses,” Reed said. “This really is a comfortable configuration, and I don’t want to slow down the delivery of the buses.”

At the same time, Reed said he would withhold making a recommendation on how to proceed until after receiving a full staff briefing on the company and its status.

OCTA and SuperBus officials say the agency is already successfully operating two prototype vehicles that have been used on express routes between Fullerton and Los Angeles. Officials say the SuperBuses also operate at significant savings over regular buses because each carries 20 more passengers.

Officials say that no OCTA money will be paid for any new buses until they are delivered and pass inspection.

The Times investigation revealed that SuperBus has already benefited from having the OCTA agreement, which was given to the company without competitive bidding. After the company was sued last year for failing to pay its San Jose office rent, executives settled the case by promising to give the landlord $17,000 from the proceeds of the Orange County contract. The firm is now being operated out of Elder’s home in Saratoga.

Also, some officers of SuperBus are accused of self-dealing and fraud in connection with unrelated business deals, according to Santa Clara County court records.

Moreover, Elder told OCTA in a December memo that the firm was relying on financing from the Mexican government to build the buses at a plant that would be built in Baja California and that the Mexican government was also backing a $760,000 letter of credit that would be issued by the Bank of America in lieu of a performance bond.

Former Orange County Supervisor Ralph B. Clark has acknowledged that he acted as a paid “adviser” to SuperBus after he left county government in 1986, and that he took a small amount of company stock as payment.

Elder has said that Clark helped arrange a number of “private” meetings with county officials before the SuperBus vote.

However, Clark has said that he did nothing to help the company obtain the contract, although he did introduce Elder to Stanton at an Aug. 20 lunch.

Times staff writers Eric Lichtblau and Jim Newton contributed to this report.