Wary OCTA Reviews Policy on Administrators’ Side Businesses : Ethics: It hopes to avoid even appearance of conflicts among several officials who conduct various private enterprises. One asks for reassignment.

Fearing even the appearance of conflicts of interest, the Orange County Transportation Authority is reviewing policies affecting administrators who run their own businesses on the side, OCTA officials said Wednesday.

The review, plus news media inquiries, prompted one employee to seek reassignment late Wednesday. Maintenance supervisor Efren Medellin Medellin, who sells bus parts to other transit agencies and to a firm in Mexico from his Garden Grove home, asked to be reassigned to “avoid bringing negative exposure to the authority and himself,” transit operations manager John Catoe said.

Catoe said the reassignment will ensure that Medellin has no influence at OCTA on the evaluation and purchase of bus parts.

None of the employees with business sidelines, including Medellin, has been accused of any wrongdoing. But statements required by the state show that eight full-time OCTA employees, including Medellin, are supplementing their salaries by free-lancing for outside clients.

“We’re concerned about even the appearance of a conflict, and we’ll try to do something about it,” said OCTA Chairman Gary L. Hausdorfer, who is also a San Juan Capistrano councilman. “We’re reviewing all of our ethics policies, and this is part of that review.”

Medellin said Wednesday that at one point, after OCTA’s chief auditor questioned his business activities, he consulted a lawyer to avoid any conflicts and turned over his business records.

OCTA chief auditor Robert A. Duffy himself runs a tax preparation service from his home, as do five other OCTA finance officers--James S. Kenan, Mike Jensen, Gary Burton, Nancy Schafer and Ron Kilzer--according to their economic disclosure statements.

Another employee, Human Resources Director Marlene Heyser, reported income from annual seminars, one of which she conducts each year at UC Irvine.

While agency officials said they don’t believe any of the side jobs present illegal conflicts of interest, they are examining internal policies with an eye toward discouraging those businesses, especially when they are similar to work done for OCTA.

Kilzer could not be reached for comment, but all of the others denied using their offices for personal profit. They said they don’t even solicit clients through OCTA.

“I keep my business completely separate,” Medellin said Wednesday. “I know we have a conflict-of-interest policy and I respect it. . . . My business is no big money-maker anyway.”

Medellin said his 2-year-old business earned him “$2,000 to $3,000” in 1992.

Citing the confidentiality of personnel matters, Duffy declined to discuss specifics of OCTA’s review of Medellin’s activities. That review will continue, OCTA officials said.

However, Duffy said he was confident that employees with tax preparation businesses such as his own weren’t soliciting clients through OCTA, or doing so on the agency’s time.

“We’re very concerned,” Duffy said. “We want to keep our eyes open. If we find a conflict, we will do something about it.”

The economic disclosure statements show that in addition to outside business income, OCTA board members and employees received gifts ranging from theater tickets to meals and golf games from lobbyists and firms doing business with the agency.

OCTA records show that Kenan, the chief financial officer, and financial consultant Jeff Leifer took each other out to dinner several times--expenditures totaling about $150.

While the meals themselves don’t amount to much, Leifer’s relationship with OCTA does.

Leifer, who helped OCTA sell $540 million in Measure M bonds last year, has parlayed an initial $25,000 contract awarded by OCTA after competitive bidding into into a three-year agreement. The cumulative obligation to Leifer: $650,000 plus expenses.

“Once you establish a relationship with a financial adviser, you’d want to maintain that relationship,” Chief Executive Officer Stan Oftelie said.

Meanwhile, Kenan reported receiving $439 in free meals and tickets from firms doing business with OCTA; Oftelie reported receiving $215 worth.

Board member Daniel H. Young, who is the mayor of Santa Ana, and board alternate Sara Catz have acknowledged that they must abstain on votes affecting the Disney expansion project in Anaheim because they own Disney stock.