U.S. Cuts Off Future Funding for Subway : Tunnels: Numerous construction problems must be addressed, officials say. Move jeopardizes Metro Rail extension to San Fernando Valley, East Los Angeles.

The federal government took the extraordinary step Wednesday of cutting off all expected future funding for the Los Angeles subway project until local officials demonstrate that they can competently manage the construction.

Pointing to the litany of engineering, construction and inspection problems that have emerged, Federal Transit Administrator Gordon J. Linton said that about $1.6 billion of funding for subway construction will be frozen immediately.

“Quite frankly,” Linton said at a Washington news conference, “the quality of the work has not met our standards.”

The announcement jeopardizes plans for extending the subway to the San Fernando Valley and East Los Angeles. But construction of tunnels and stations along Wilshire Boulevard and Vermont Avenue will not be affected, because funding for the work is already in hand.

Transit officials in Los Angeles said that they are moving swiftly to address all of the federal government’s concerns.

The chief executive of the Metropolitan Transportation Authority said he is considering terminating the contractor who is building the problem-plagued subway tunnels along Hollywood Boulevard, as well as the agency’s inspection firm.

The announcement from Washington comes as a stinging blow to the contractors and officials who are building and administering the multibillion-dollar subway project--the most expensive, per mile, in U.S. history.

The federal government has provided the greatest share, nearly 50%, of money for the subway. Other funding comes from special sales tax revenue collected in Los Angeles County and from the state of California.

Linton ordered the MTA not to resume tunneling in Hollywood, where failure of tunnel bracing and surface sinkages have halted excavation, until federal officials are assured that the work can be performed safely.

The transit administrator also delivered to Los Angeles officials the long-awaited findings of engineers retained by his agency to review the problems in Hollywood. Their report raises more questions about the design, construction and supervision of the tunneling.

The federal engineers said that the greatest cause of the sinkages and related difficulties was the crushing of wood wedges used for bracing, which Metro Rail engineers approved two years ago as substitutes for metal struts. Local engineers “incorrectly calculated” the ground forces that the wedges could withstand, according to the federal report.

The report also called for more and better stabilizing of the soil, with grout, whenever excavation resumes.

Linton said he was taking action with the full support of his boss, U.S. Secretary of Transportation Federico Pena.

“These steps,” Pena said in a statement, “are meant to deliver a firm message that the Clinton Administration believes in the (Los Angeles subway) project, supports its continuation, but insists that it be built in a safe and fiscally responsible manner.”

The federal transit agency’s confidence in the Los Angeles project has been shaken by revelations last year of thin concrete in Downtown tunnels already open to passenger service, followed by the structural troubles in Hollywood.

The thin tunnel concrete, the inadequate grouting of the tunnels in Hollywood and the decision by project engineers to authorize the wood bracing instead of steel struts were brought to light over the past 14 months by The Times.

“The management of the Red Line project must make sure quality assurances can be fulfilled, and the American public can be confident that safety issues can be resolved,” Linton said, adding:

“Unfortunately, new technical problems continue to emerge while proposed corrective measures remain incomplete or inadequate. After considerable effort to correct these difficulties, our patience has been exhausted and I have no alternative but to take action.”

In a letter Wednesday to the MTA’s chief executive officer, Franklin E. White, Linton said: “We perceive there to be inadequate management controls at the (MTA) for executing the (subway) project.”

White, who has been blocked by Los Angeles Mayor Richard Riordan and City Councilman Richard Alatorre in his efforts to gain more direct control of rail construction, said he would move swiftly to satisfy the federal government’s concerns.

“We’re looking at everything, including (changing agency) personnel,” White said. “All of the options are on the table.”

White also said for the first time publicly that he is examining whether the MTA will seek to terminate the construction contractor of the Hollywood Boulevard and Vermont Avenue tunnels, Shea-Kiewit-Kenny, along with the MTA’s construction management firm, Parsons-Dillingham.

“We’re looking at the appropriateness of continuing construction with these two firms,” White said. “But it isn’t a simple matter.”

Representatives of Shea-Kiewit-Kenny did not return calls seeking comment.

At Parsons-Dillingham, a spokesman said: “We stand behind our work. Parsons-Dillingham is currently working . . . to (help) expedite FTA authorization to resume tunneling.” The firm on Tuesday alleged that Shea-Kiewit-Kenny “concealed” some of the tunnel problems from inspectors.

County Supervisor Ed Edelman, chairman of the MTA, pledged “some major improvements” as early as next week.

“We want to be able to pinpoint responsibility for what happened under Hollywood Boulevard,” Edelman said. “I’m the first to admit that the procedures we’ve had in place have not picked up some of the noncompliance (with contract specifications).”

Riordan, who sits on the 13-member MTA board and controls three other appointments, was traveling in Europe and unavailable for comment. Alatorre, one of those appointees, said he generally supports the MTA doing “whatever it takes” to satisfy the federal government.

But he added: “I don’t want to point fingers. There’s enough blame to go around.”

Subway work already under way along Wilshire Boulevard, at tunnels and stations extending to Western Avenue, will not be affected by the cutoff of future federal funding. However, extension of the subway from Hollywood over Cahuenga Pass to Universal City and the San Fernando Valley is affected by Wednesday’s announcement.

Also in jeopardy is funding for extension of the subway from Union Station to Indiana Street, in East Los Angeles.

Linton and representatives of the MTA said that they had been close to reaching an agreement to increase by up to $186 million the federal government’s participation in the East Los Angeles extension. Talks regarding part or all of that money will continue, but Linton said he will sign no agreement until he is satisfied that the MTA is doing its job properly.

In Washington, Rep. Henry A. Waxman, who represents Hollywood and has questioned the safety and costs of subway construction, said Wednesday’s announcement “is a fine first step” toward rectifying the problems in Los Angeles. Waxman also said that an engineering assessment performed for the city and unveiled this week “confirmed my worst fears about decisions made at every level of this project.”

“A comprehensive solution, rather than small measures, will be necessary to get to the bottom of the problems that are occurring,” Waxman said.

State Assembly Transportation Committee Chairman Richard Katz said he urged White in a phone call Tuesday night to “act quickly, decisively, to re-establish the credibility of the agency.” Katz said it is time to dissolve the MTA’s subsidiary agency, the Rail Construction Corp., and to terminate any private contractors or agency officials found responsible for the defective work and supervision now at issue.

“Anything short of firing these folks will look like you’re not taking the kind of action you ought to be taking,” Katz said. “You’ve got to fire the people who are screwing up.”

Katz also urged the immediate firing of Edward McSpedon, who as RCC president heads the MTA’s rail-construction unit.

“The RCC . . . should have been eliminated a long time ago,” Katz said. “It is a large reason for the problems we are seeing. . . . They’re not accountable. . . . The sooner that (rail construction) gets brought under the MTA board, the more accountable it is going to become.”

McSpedon said he hopes to remain on the job. “We’ll always have problems as long as we’re trying to do this difficult, difficult work,” he said. “. . . I think our record of performance and accomplishments will stand up against any project of comparable size and magnitude in the nation.”

Los Angeles City Councilman Zev Yaroslavsky, an appointee to the transit authority board, said the actions announced Wednesday should spur the MTA to overhaul its construction management.

“The relationship between the agency, the contractors, and their overseers (has) been too cozy. . . . At long last, the (Federal Transit Administration’s) decisiveness will help protect public safety and the public treasury.”

Yaroslavsky criticized MTA board members for failing to clean up problems themselves. “The board has ignored recommendations from (White) and others to create an effective, safe and accountable construction program. This is not only unfortunate, but it is shameful.”

County Supervisor Mike Antonovich, who sits on the MTA board, called the federal response “a body blow to the subway.”

The federal report on Wednesday provided recommendations and some new information about the MTA’s handling of the problems in Hollywood:

* Representatives of the federal transit agency were not informed of the ground sinkages until Aug. 18--or 22 days after project engineers learned part of Hollywood Boulevard had fallen four inches. In the future, the report said, the MTA should provide quick notifications “to protect the public interest.”

* The wood wedges should be replaced by steel struts for the remainder of tunneling. Concrete or grout material of adequate strength must be placed alongside the wedges.

* The “contact grouting” of soil from within the tunnel must be performed, as required originally by the contract but not fully enforced by the MTA. The report concluded that portions of the most-distressed tunnels had not been grouted.

* There is “a pattern of increased settlement” at the cross streets of Hollywood Boulevard. This “may reflect a structural problem” with the tunnel design or construction.

* There is a “possible connection” between damage inflicted by the Northridge earthquake and the ruptures of pipes along Hollywood Boulevard. An engineering assessment prepared for the city of Los Angeles this week concluded that the subway tunneling most likely caused the ruptures, which soaked the loose soils and contributed to surface sinkages.

Times staff writers Aaron Nathans in Washington and Frederick Muir in Los Angeles contributed to this story.