Sanders’ Link to Taxi Firms Raises Conflict Concerns : Ethics: Riordan appointee to MTA says he does not represent companies before that board and has done nothing improper.

Attorney Stan Sanders, appointed by Mayor Richard Riordan to the county’s powerful transportation board, has been hired to represent two local taxi operations--a relationship that is raising conflict of interest concerns.

Sanders, who sits on the board of the countywide Metropolitan Transportation Authority, last month contacted a staff member and contractor at the agency to inquire about an MTA-funded program that the taxi firm clients from his private law practice had complained about, The Times found.

Sanders also has arranged or attended meetings on behalf of his clients with City Hall transportation officials, including some who regularly deal with the MTA and its board on funding matters.

Sanders’ recent contacts with mid-level transportation officials have created enough uneasiness at City Hall and the MTA that staff members have notified superiors or legal advisers. “It’s an awkward situation. . . . It troubled us,” said Alan Willis, a taxi regulator at the city Department of Transportation who met with Sanders in October regarding a taxi franchise issue.

Sanders said he has done nothing improper, and violated no ethics laws and does not represent the taxi clients on any MTA matter. “If I thought it was illegal, unethical or improper, I wouldn’t do it,” he said. He said will disqualify himself from participating in any MTA decisions that might pose a conflict.

He also denied that his inquiries with the MTA staff member and contractor were for his clients’ benefit and characterized contacts with City Hall transportation officials as “lawyering, not lobbying.” That is why he has not registered as a lobbyist at City Hall or the MTA, he said.

Although there is no indication that Sanders violated the law, his actions invite questions about potential conflicts, particularly at the MTA, watchdog groups say. “It’s the problem of wearing two hats,” said government ethics expert Robert Stern, co-director of the nonprofit Center for Government Studies. “He runs the risk of confusing employees as to which hat he is wearing.”

Sanders’ financial ties to special transportation interests also are noteworthy because he is a high-profile Riordan appointee. The mayor has repeatedly stressed that he is imposing new standards of behavior at City Hall, including selecting political appointees with no private agendas.

“This reflects on the . . . Administration because Riordan campaigned on no business as usual at City Hall,” said Cecilia Gallardo of California Common Cause. “I think we have to ask what kind of standard is being set.”

Riordan issued a statement saying he was unfamiliar with the specifics of Sanders’ activities, but that he named him to the MTA “because of his proven history of public service as a home-grown Angeleno with a lot of brains. If there is anything to these sets of allegations, I am sure this will come forward in the proper forum.”

Sanders said he has no regrets and nothing he has done is particularly unusual or at odds with the new tone Riordan has pledged to set. “I’m an administrative lawyer,” Sanders said. “I’m going to try within the bounds of what is legal and what is ethical and what is proper to continue to do what I’ve been doing for the last two decades in the city . . . practicing law.”

Sanders, 51, ran for mayor last spring and impressed political observers with his strong showing, finishing sixth in a field of 24 and emerging as the top African American vote-getter. He endorsed Riordan in May and became a leading player in the runoff campaign. He later assumed a top post in the mayor-elect’s transition team and in mid-July was named by Riordan to the 13-member MTA board.

Earlier this month, Sanders was back in the news as Riordan’s emissary, brokering a settlement in a dispute over minority representation on the Rose Parade committee. The Rhodes scholar, who has ambitions to run for local or statewide office, said he only recently returned to his legal practice after taking time off for the campaign.

He was hired by United Independent Taxi and the Independent Taxi Owners Assn. in late August or early September, Sanders and taxi officials said. He has been paid about $17,000 thus far, according to Jeries Qonsol, president of Independent Taxi Owners.

Sanders is advising the two associations on a joint $2.5-million acquisition of a privately held cab franchise, which requires City Hall approval, as well as related matters, according to Qonsol. The franchise is crucial to the associations because, should it fall in their rivals’ hands, it would pose a major competitive threat in the central and Westside parts of the city, the association presidents said.

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The MTA appointment was not a factor in hiring Sanders, Qonsol said, but his political standing and his City Hall contacts were. “All I want to be able to do is get to these guys in the city,” he said. Sanders “knows a lot of people . . . (they) give more respect” to him. Reza Nasrollahy, president of United Independent Taxi, said he was chiefly interested in Sanders’ legal skills, not his political clout.

Although they have broached concerns about MTA-funded taxi programs with Sanders, the taxi officials said he has refused to get involved. “He said it was a conflict of interest,” Qonsol said.

Records and interviews indicate, however, that Sanders made inquiries with an MTA staff member and an MTA contractor regarding a program of particular concern to his clients--a $5 million program that provides free taxi service for the ill, the elderly and the very poor. Under the program, vouchers for free and discounted rides are distributed by neighborhood service groups and redeemed by taxi companies through MTA contractors.

On Friday, Nov. 12, Sanders called Donna Barrett, the MTA manager who oversees the taxi program, identifying himself as an MTA board member, according to a memo Barrett wrote to her supervisor, who passed it on to his supervisor. Sanders said he had received a complaint from United Independent Taxi that they were not being reimbursed monies due them, Barrett recalled. It appeared that Sanders was “just making a very polite inquiry on behalf of a citizen,” she said.

At issue was about $16,000 in billings that had been rejected by an MTA contractor, Barrett said. When she asked who had complained, Sanders “acted as though he did not know the individual and said his name was Resa ‘something,’ ” according to a memo Barrett later drafted for superiors.

On the following Monday, Barrett contacted the MTA contractor who oversees the taxi company payments and learned of Sanders’ possible connection with United Independent, she said. Sanders, identifying himself as United Independent’s attorney, had contacted the contractor the week before, also asking why the payments had not been made to the taxi operator, according to Barrett’s memo.

The funds were never released and Barrett said she never made contact with Sanders to report back. She wrote her memo for superiors, partly because she “was concerned. . . . I felt like somebody needed to know” about Sanders’ possible ties to the taxi firm. “Had (the MTA contractor) not told me, I never would have had a clue,” she said.

She added that it is not unusual for staff members to notify their supervisors about board inquiries.

Sanders said he made the inquiries solely in his capacity as an MTA board member, and not on behalf of his taxi clients. He acknowledged that his clients complained earlier during a meeting in his office about the MTA program, and the seeming advantage a competing firm enjoyed.

But Sanders said he called Barrett and the MTA contractor because he had received a tip about possible fraud in the taxi program. The tipster, an MTA employee whom he declined to identify, indicated that the same taxi firm his clients had complained about was benefiting from the alleged misconduct, Sanders said.

“I looked into it,” he said. “There is a public duty that I have (which) supersedes a remote and potential conflict of interest.” He said he could not recall whether he specifically mentioned any taxi firm or name, but he denied identifying himself as the attorney for United Independent in his call to the contractor.

The contractor, the International Institute of Los Angeles, declined to discuss Sanders’ call.

His inquiries reassured him that there is no problem with MTA’s oversight of the program.

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He said he had no misgivings about being involved in matters so closely linked to his clients’ financial interests. “Should I have made the inquiry that I did? Absolutely. And I would do it again.”

Generally speaking, MTA ethics rules prohibit board members from being involved in decisions that would influence clients’ income.

MTA attorney Susan Amerson said she was not familiar with the Sanders situation, but stressed it may be appropriate for a board member to seek information on a matter even if they have clients whose interests may be affected.

Elsewhere, Sanders met in October with Willis, the City Hall taxi regulator, and his boss, Ken Cude, to discuss the franchise acquisition and conditions that might be placed on the transfer of the taxi rights. The taxi associations complain the city is making onerous, unfair demands.

Cude and Willis both said Sanders appeared to be seeking information rather than trying to influence their actions. Willis recalled the Sanders meeting and “sitting (there) thinking: Is this a conflict of interest?”

After the session, Willis and Cude notified the department’s attorney, but were advised that it is Sanders’ responsibility to avoid any legal problems, Willis said.

Another time, Sanders appeared with his clients at a taxi subcommittee meeting of the city’s Transportation Commission. A member of the subcommittee, John Shallman, had been Sanders’ paid campaign manager this year. Shallman, appointed to the Transportation Commission by Riordan, this summer worked out of Sanders’ law office as part of the city-paid staff of the Riordan transition team.

In an interview, Shallman said he saw no conflict and would not be influenced by his past association with Sanders. Sanders and Shallman said they had not discussed taxi issues.

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Still, when Cude learned of Shallman’s ties to Sanders, he said he again mentioned it to his department’s attorney, in case a question arose about a possible conflict of interest involving the commissioner. The attorney could not be reached for comment.

A few weeks ago, Sanders arranged and attended a meeting on the franchise acquisition with his clients and Councilman Nate Holden, chairman of the council Transportation Committee, which will play a central role in deciding on the franchise transfer.

Holden characterized the meeting as informational and routine and said he saw nothing unusual in Sanders involvement. “You gotta do business,” he said.