U.S. Will Probe Expenditures for Metro Rail : Finances: Investigative arm of Congress will look into allegations of fraud, abuse and corruption in the L.A. subway project.

Prodded by a Tennessee congressman, the federal General Accounting Office said Thursday that it has agreed to look into newspaper and whistle-blowers’ allegations of fraud, abuse and corruption on the multibillion-dollar Metro Rail project.

Among the alleged abuses reported to the GAO, the investigative arm of Congress, is the Los Angeles Transportation Commission’s $2.9-million expenditure over an 18-month period for meals, travel and company cars for the commission’s 400 employees--costs first documented by The Times earlier this year.

Another specific charge passed on to investigators is a whistle-blower’s prior allegation that the LACTC staff spent roughly $800,000 on the Metro Blue Line’s opening ceremony in 1990, more than twice the $300,000 budgeted and approved by the commission’s Board of Directors.

An aide to Rep. John J. Duncan Jr. (R-Tenn.) said GAO investigators also have been asked to look into excessive spending on consultants and lawyers, including $700,000 to one law firm, and campaign contributions to some LACTC board members from companies that won contracts from the board.

Supervisor Mike Antonovich, chairman of the Los Angeles County Transportation Commission, denounced the investigation as a “rehash of old charges, most of which have either been disproved or corrected.”

Antonovich said that the timing of the investigation appeared to be politically motivated, designed to hurt Los Angeles’ bid to win continued federal transit funding when Congress takes up future federal funding plans “in the next few days.”

LACTC Executive Director Neil Peterson said that commission lobbyists personally polled key members of Congress Thursday to determine if the allegations would have an impact on funding.

“At this point our sense is it won’t do any damage,” he said. “There’s no new news. Everyone has heard it before and they know what steps we’ve taken to correct them.”

Mayor Tom Bradley, who has led efforts by the LACTC board to rein in spending, called the allegations “disturbing” and urged employees to step forward if they have any suspect spending practices to report.

Alex Silva, a GAO official in Washington, said the agency’s inquiry will be performed by its Office of Special Investigations, a unit of the general counsel’s office that looks into allegations of criminal wrongdoing.

However, Silva said that the decision to involve the OSI was based strictly on the way in which Duncan requested the inquiry--not on any hard evidence of criminal activity.

Duncan initiated the inquiry last week with a letter to both the GAO and the Federal Bureau of Investigation. In the letters, he said he had received “disturbing allegations of fraud, waste and abuse” in Los Angeles’ 30-year, $45.9-billion rail-transit construction program.

Silva stressed that none of the allegations has yet been confirmed or denied.

FBI officials in Washington and Los Angeles declined to discuss whether the bureau is investigating.

Sources familiar with the case said the FBI is simply assessing the allegations and evidence, but has yet to decide whether the charges are worth pursuing.

Duncan’s aide, Jim Easton, said that his boss, who represents Knoxville and southeastern Tennessee, began receiving calls from Los Angeles whistle-blowers after he joined with local union officials and several City Council members in criticizing the LACTC’s decision in January to award a $171-million car-building contract to a foreign-owned company.

Public outcry prompted the LACTC to cancel the car-building contract and seek new bids for cars that will operate on the Norwalk-to-El Segundo Green Line and other proposed light-rail lines.

Duncan called for a federal investigation of the LACTC during the bidding flap but backed down when it was pointed out by LACTC officials that the controversial project was being built without federal funds.

Now, however, the congressman believes that enough questions about bidding practices and overhead expenses have been raised about the LACTC’s overall operations to warrant an investigation.

“When we see $800,000 for opening ceremonies for the Metro Blue Line and (thousands more for) trips to Europe, . . . we say, hold it,” Easton said. “If we are being asked to spend billions more out there . . . we want to make sure it’s being spent wisely.”

In March, The Times documented evidence of casual spending and lax accounting at the LACTC. The agency spent $2.9 million on meals, travel and company fleet cars over an 18-month period. The expenditures included a $9,000 Palm Springs retreat for accountants and bookkeepers, catered, staff-only lunch meetings that cost up to $499 per day, and many thousands of dollars worth of free coffee and doughnuts for staff members.

Government-issued credit cards were used by top LACTC executives to pay for golf lessons in Arizona and bicycles in Los Angeles. Many of these personal expenses were not reimbursed until they were questioned by The Times.

“They paid them back, but so what?” said Easton. “We’re saying they should never have done it in the first place.”

The LACTC stopped providing free coffee and doughnuts for employees immediately after the controversy flared, but recently approved a proposal to renew the free-coffee program at an annual cost of $40,000.

In May, an independent audit ordered by the LACTC confirmed the newspaper’s findings and warned that some abuses were continuing because corrective measures were not being rigorously followed.

Duncan also has called for an investigation of the numerous contract amendments, or change orders, issued by LACTC staff. Hundreds of change orders worth tens of thousands of dollars have been approved by staff members without review by the commission’s board of directors.

The allegation about the Blue Line opening ceremony was made by former LACTC accountant Tim Roberts. On Thursday, he repeated his allegation that LACTC officials wildly exceeded their approved budget--buying thousands of commemorative T-shirts, shopping bags and other promotional items that were never distributed and now sit uselessly in warehouses. The agency then concealed the spending in its administrative budget, Roberts says.

As evidence of his charge, the whistle-blower says that the LACTC’s Comprehensive Annual Financial Report describes the commission spending $962,000 from a “rail start-up special revenue fund” for “administration” costs. The same document shows that the commission budget did not allocate any rail start-up costs for administration.

LACTC officials said Thursday that $800,532 of that was for an RTD safety program approved by the board after the budget had been adopted. Another $158,768 was spent on the Blue Line’s opening ceremony. The last $2,957 was spent on planning for other openings, including the Metrolink commuter-train network next month and the Red Line early next year.

Officials added that the promotional items mentioned by Roberts are given away at all Metro Rail public displays--including one now at the L.A. County Fair--as part of a comprehensive plan to promote public transit. They were not bought strictly for the Blue Line, they said.

Roberts also accused LACTC staff members of seeking to quietly obtain board approval for the expenditure after the fact. When he made the accusation at a board meeting last year, the board told him he was wrong. Directors claimed they had given verbal authorization before the event and simply waited until later to formally approve a written proposal.

Los Angeles City Councilwoman Joan Milke Flores, who had called for a federal inquiry in June, renewed her call Thursday for an outside investigation.

“There should be a fine-tooth comb and a magnifying glass put on all these allegations to make sure all of them are addressed,” said Flores, who is running for Congress in the South Bay.

Times staff writer Rich Simon contributed to this story.