Gifts Pour In to 2 O.C. Water District Officials : Utilities: Santa Margarita’s managers have accepted large donations from companies awarded agency work.

The top two managers of the Santa Margarita Water District have accepted more than $40,000 worth of gifts from contractors, bankers, developers and consultants, some of whom they recommended for millions of dollars worth of contracts.

From pheasant hunting and fishing trips to theater tickets and golf outings, district General Manager Walter W. (Bill) Knitz and assistant General Manager Michael P. Lord have regularly taken gifts from companies, primarily engineering firms, that were awarded more than $22 million in work over the same period that the gifts were offered and accepted.

Both men say their acceptance of gifts has no bearing on the contracts awarded.

“If you think that . . . the value of some of these trips and meals and a few golf games with these guys influences any of my impact on the board . . . I don’t think it does,” Knitz said.

A sampling of five other water districts in Orange County show that those administrators had not reported receiving any gifts in the same period of time.

While Knitz and Lord accepted tens of thousands of dollars in gifts, neither man abstained from decisions that benefited the companies financially, as required under the state Political Reform Act of 1974.

Under the law, administrators are prohibited from using their “official positions to influence the making of any governmental decision” that has a financial impact on a company that has given $250 or more in gifts during the previous year.

Both men sit on the district’s finance committee, which approves and recommends payments to all vendors and places those amounts on the Board of Directors’ agenda for final approval. In addition, Knitz sits on the engineering committee, which recommends approval of engineering contracts and places projects on the board’s agenda for consideration.

A spokeswoman for the state Fair Political Practices Commission said public officials can be fined $2,000 each time they violate the requirement that they abstain. They could also face civil penalties. In either case, someone must make a complaint to the FPPC before an investigation can start.

Last year, Lord recognized that he might have a problem for accepting such large gifts, discussed it with the district’s legal counsel, Fritz R. Stradling, and decided to reimburse every donor for amounts exceeding $250 per year--a total of $11,000.

Knitz said he never thought he had a problem and never sought a legal ruling.

During the last three years, Knitz accepted $22,840 in gifts, more than half of which came from two engineering firms--Robert Bein, William Frost & Associates of Irvine, and MacDonald-Stephens Engineering of Mission Viejo. Lord has accepted $20,305 in gifts over a five-year period ending last year, including $10,220 in fiscal year 1989-90.

Since 1989, Robert Bein has been paid about $13 million for a variety of engineering projects. MacDonald-Stephens has been paid more than $4 million.

Specifically, Robert Bein spent $3,000 in 1990 to take Knitz on two fishing trips to Cabo San Lucas. The next year, Knitz received a $1,400 fishing trip from Robert Bein. He wasn’t sure last week whether that 1991 trip was to Cabo San Lucas or to an area near Vancouver, British Columbia, where he likes to fish for salmon.

MacDonald-Stephens spent $1,200 on a trip for Knitz in 1991, $2,000 for a trip in 1990 and $2,500 for trips in 1989. Knitz could not recall the locations of those trips. David Stephens, the company’s president who is said to be a close friend of Knitz’s, did not return several telephone calls for comment.

Robert Bein has been regularly engaged by the district as a consulting engineer since 1970, primarily for planning purposes and to perform engineering work on the district’s domestic water system. His firm has been awarded millions of dollars of work each year. MacDonald-Stephens began doing engineering consulting work on waste water treatment projects for the district about 10 years ago, and has been a regular contractor ever since.

Consulting contracts are not normally bid like construction projects. Once a company is selected for a certain task, it keeps negotiating contracts for more work and would not be replaced unless its “level of performance went down,” said Bill Dye, the district’s chief engineer. “Criteria would be failure to meet schedules and failure to prepare good plans.”

Dye said he figures out what work is needed and negotiates a fee with a consultant. Once a dollar amount is determined, Dye said he sends a recommendation to the board of directors. Larger projects are discussed with Knitz and Lord, he said. In any case, the dollar approval goes through the finance committee, on which Knitz and Lord sit.

Robert Bein has given Lord some $5,190 in gifts, including two $100 pheasant hunting trips in 1988 to a country club in Corona.

“The trip was on my own time,” Lord said. “It was local. It was a couple of hours in the morning.”

Consultant Don Greek provided Lord with an $800 deer-hunting trip to Canon City, Colo., in 1988. His company has been paid $115,210 over the past four years, mostly for work involving a multimillion-dollar pipeline project in South County.

Lord said he has reimbursed the company the entire cost of the trip, because “I wanted no question regarding motive . . . in participating in hunting, which is something I have done since I was a kid.”

Greek’s company also contributed $1,150 in trips and $150 in meals in 1989, $100 in business lunches in 1988 and $50 in meals in 1991. Greek said he believed the $1,150 trip also was for deer hunting in Canon City and that Lord had reimbursed him for both trips.

Greek and Knitz were college roommates at Marquette University and both enlisted in the U.S. Marines together. One time, Knitz mentioned to Greek that Lord was an avid deer hunter. Greek invited Lord, but said he did so without expecting any special consideration from the district.

“The people you’re associated with in this line of work are those you meet through business,” Greek said. “There was never any special attempt to influence or invite any special group. These are just neat people, goofy characters.”

For 1990-91, Lord reported taking no gifts, although he said in an interview last week that he believed he had accepted gifts, and they probably had not been reported by mistake.

Lord did report accepting $1,845 in gifts for 1991-92.

“No question we had business dinners and lunches (in 1990-91) with the same type of people that we traditionally do business with for the last several years,” he said. “There would be no motivation on our part to file them for years and years and not file them (for 1990-91) and then to begin to file them again.”

Failure to file a statement of economic interest is a violation of state law.

Last April, Lord wrote to the water district’s attorney, saying he had misunderstood the limits on gifts and had personally reimbursed gift givers who had given more than $250 per year.

Last week, however, Lord declined to produce any evidence that the gift givers had been repaid the excess $11,100, telling The Times that it would have to contact every company to verify whether the money was reimbursed.

Jeanette Turvill, a spokeswoman for the state’s Fair Political Practices Commission, which monitors campaign financing, said she could not understand why Lord would reimburse the donors. If he believed he had a problem, she said, he should have abstained from influencing the board’s vote on contracts in the first place.

Turvill said she would not attempt to prejudge whether Lord or Knitz violated state law, and said nobody has filed a complaint against either man.

Gift givers refused comment about why they had provided gratuities to district officials.

“I really don’t want to pursue this conversation,” said Dan Boyle, the head of Dan Boyle Engineering, who provided Knitz with $1,280 in gifts, including $650 in meals, $300 for show tickets and $330 in golfing expenses. “If it’s a public record, use it as you see fit.”

Boyle provided nothing to Lord, who does not sit on the district’s engineering committee.

Bob Kallenbaugh, president of Robert Bein, William Frost & Associates, said the company had no set policy on giving gifts.

“We don’t have a dollar amount per se,” he said. “But our business ethics are very important to us. We make sure we are proper in our gift giving, public or private. We use good business sense and good common sense.”

Asked why the company would provide $12,860 in gifts to Lord and Knitz, Kallenbaugh said he didn’t know.

“That’s a good question,” he said.

But William R. Mitchell, the head of Orange County’s Common Cause chapter, said it is clear why the two men were given gifts.

“They are being taken out to lunch and wined and dined with people who do business with the water district solely to influence their business decisions,” Mitchell said. “There’s no other reason.”

Knitz said he does not know why companies give the gifts but that he accepts them because he can meet with consultants on an informal basis to discuss business.

“I think it’s a good chance to do some planning and discussions of some of the things that we have coming down the pike,” he said, adding that he uses the opportunities to discuss “the directions that we should go with our planning and how to solve some of our problems.”

Knitz reported receiving no gifts before 1989 and Lord reported receiving none before 1987.

Administrators such as Lord and Knitz, while required to file statements of economic interest, run little risk if they fail to do so. The state’s Fair Political Practices Commission does not monitor receipt of such records and does not investigate problems with the statements unless a complaint is lodged.

The general managers of the Municipal Water District of Orange County, the Orange County Water District, the Tri-Cities Water District, the Moulton-Niguel Water District and the Irvine Ranch Water District have reported receiving no gifts over the past five years.

Stan Sprague, the general manager of the Municipal Water District of Orange County, said he has not recorded gifts during the eight years he has been in charge of the district, although he may have received something he should have noted.

“I might be in violation a couple of times,” he said. “I may have gotten Angels baseball tickets or something, but that’s about it.”

But in no way has Sprague received the kinds of gifts that Knitz and Lord have recorded, he said.

“We’re a little bit different,” he said. “We’re not affiliated with a lot of contractors and consultants, so we’re not open to the same kind of, if you will, exposures or enticements.”

John Chaufty, the assistant general manager of the Orange County Water District, said his district does not let consultants and contractors buy meals and provide other gifts.

“I guess I may go out twice a year with potential consultants,” he said. “We put out a fair amount of amount of work on the street. If people want to talk about work, they come into the office. We are barraged with people who want to take us to lunch. If we allowed it, we could go out to lunch every single day.”

Beyond the Limit: California law prohibits government officials from using their “positions to influence the making of any governmental decision” with a financial impact on a company that has given them $250 or more in gifts during the previous year. The forms reproduced in part below show that both the general manager of the Santa Margarita Water District, Walter W. Knitz, and his deputy, Michael P. Lord, accepted gifts exceeding the limit from two engineering consulting firms whose contracts they acknowledge recommending repeatedly to the district’s board. Source: Santa Margarita Water District documents