Wilson Derails Contract for Day-Care Chain : Budget: The governor vetoes the Legislature’s $8-million guarantee for the foundation, which serves immigrants and the poor. The FBI is investigating allegations that it misused funds.

Gov. Pete Wilson has thwarted an attempt by the Legislature to guarantee an $8-million contract for a chain of politically connected day-care centers under FBI investigation for possible misuse of government funds.

Wilson, who signed a new $57.5-billion state spending plan Friday, used his line-item veto to delete a provision requiring the state Department of Education to renew the contract of a nonprofit foundation that operates day-care centers for 2,300 immigrant and poor children statewide. Three of the centers are in Los Angeles.

In his veto message, Wilson said the mandate would “circumvent current law and regulations” by placing limitations on the department’s authority to grant or renew contracts.

A spokesman for the Department of Education said a final decision on the foundation’s contract will not be made until after a Sacramento Superior Court judge rules in a lawsuit that the foundation has filed. The foundation sued the department after it was notified that the state agency was considering not renewing its contract.

James Mattesich, an attorney and lobbyist for the Foundation Center for Phenomenological Research, said the veto came as a surprise and disappointment, especially because past governors have approved similar provisions for other organizations.

“We had hoped and expected that the governor would approve the decision of the Legislature to require an additional one-year funding period for the foundation center,” he said.

In May, the education department began procedures to stop the renewal of its 1994-95 contract with the foundation after examinations of the center’s financial records by the state controller’s office and an outside consultant questioned whether money intended for children was being diverted for other purposes. Over the last three years, the foundation has received more than $20 million in state and federal contracts.

The FBI, which raided the foundation’s offices and seized its records a year ago, has been investigating similar questions.

The Legislature took the unusual step of requiring a state agency to contract with a specific organization at the urging of state Sen. Nicholas C. Petris (D-Oakland), who insisted that the group needed to be protected from what he believed was undue harassment by state bureaucrats and federal investigators.

In an interview, Petris said he had seen no evidence of any wrongdoing by the foundation and could only conclude that it was having trouble with state education officials because “somebody in the department didn’t like them.” He blamed department officials for instigating the FBI investigation in an attempt to discredit the organization.

Until he has seen the FBI produce evidence of wrongdoing, Petris said he would not be impressed by the investigation. “The problem is too many people, the minute they hear FBI, they wet their pants. . . . Well, that’s not me,” he said.

Petris acknowledged that he had not reviewed the financial reports by the controller’s office and an outside consultant, but said he would expect any department audit to be negative. He said he preferred to believe an independent auditor hired by the foundation who told lawmakers that his audit of foundation books had uncovered nothing questionable.

Petris’ staff director, Felice Tanenbaum, said she advised Petris to take up the foundation’s cause after reviewing hundreds of letters of support from the parents of children who have been served by the day-care centers.

She said she also placed great faith in assurances that she had gotten from the foundation’s lobbyist, Donne Brownsey, that there was no wrongdoing. She described Brownsey, who formerly worked on the staff of state Sen. David A. Roberti (D-Van Nuys), as someone she had known for years whose judgment she trusted.

Although he was not involved in the latest legislative action, Roberti and other Democratic lawmakers over the years have been strong supporters of the foundation and have intervened in the past when the Department of Education threatened adverse actions. The foundation’s largest center, in South-Central Los Angeles, is named the David Roberti Child Development Center, after the senator.