Rose Parade Report Fuels Dissension : Pageant: Pasadena City Council accepts recommendation to renegotiate tournament’s controversial contract with city. Panel cites ‘appearance of impropriety’ in officials’ dual roles.

With Rose Parade organizers talking about moving their show to another city and black activists announcing that the Rev. Jesse Jackson will lead a rally against racism at a local church next week, the Tournament of Roses controversy landed in front of the Pasadena City Council like a bomb with a sputtering fuse.

“Perhaps the tournament should pick up and leave Pasadena and take with them their Rose Bowl game and their parade,” said former state Supreme Court Justice Marcus M. Kaufman, the tournament’s legal adviser.

“We are on a collision course,” said Jim Morris, co-chairman of the Ad Hoc Committee to End Discrimination, which will bring civil rights leader Jackson to a rally at All Saints Episcopal Church on Monday. “I don’t want to see that happen, but the stage is being set for that.”

The raucous debate dragged out for five hours during a Tuesday evening meeting of the council, which at the end approved most of the recommendations of a panel of lawyers and accountants hired by the city to examine the tournament’s business dealings.

The panel, headed by former state Supreme Court Justice Cruz Reynoso, found “the appearance of impropriety” in the city’s business dealings with the tournament because some city officials involved in those dealings also were tournament members.

Faced with that finding, the council voted to seek renegotiation of the city’s controversial 1984 contract with the tournament and to exclude council members who are also tournament members from the negotiations. The council also called on the tournament to move more quickly to give women and minorities more decision-making powers in the organization.

Leaders in the black community accuse the tournament of practicing de facto racial exclusion despite recent measures to open the tournament’s ranks to more women and minorities. The nine members of its executive committee, volunteers with at least 25 years of service, are all white men.

An overflow audience, many of them tournament volunteers and black activists, alternately applauded and muttered disapproval as speakers and council members responded to the Reynoso report. “The intensity in this room could crack a wall,” one speaker said.

The report found, among other things, that the tournament has shortchanged the city by at least $479,797 since 1984 because of accounting errors and that the city has needlessly relinquished its right to participate in multimillion-dollar negotiations with broadcasters.

Under the 1984 contract, which is scheduled to expire in 2009, the tournament and the city share equally in the expenses and profits from the New Year’s Day events.

It also grants long-term privileges to the tournament, such as the use of the city-owned Wrigley Mansion as the tournament’s headquarters for $1 a year and the use of other facilities for nominal fees.

The tournament responded testily to the report. The criticisms were erroneous or “a real slap in the face,” said Kaufman, now a member of a Newport Beach firm.

“The (tournament) resents any implication that the people who negotiated on behalf of the city were not looking out for the best interests of the city,” Kaufman said.

While asserting that the organization had the legal right to relocate outside Pasadena if it wanted to, Kaufman said the tournament was willing to renegotiate the contract.

Kaufman said the tournament has made significant improvements on city property without demanding reimbursement. Tournament events have also brought large infusions of transient occupancy taxes, sales taxes and other revenues--a “virtual bonanza,” he said.

Black activists continued to press for more minorities in positions of authority in planning the Rose Parade and Rose Bowl game, with one speaker rejecting recent tournament moves to open the decision-making ranks to minorities and women as “an illusion.”

Several council members fretted about the future of the tournament in an atmosphere of dissent. “The tournament is effectively a pretty fragile organization,” said Councilman Bill Crowfoot.