MTA Investigates Treatment of Whistle-Blower

Expanding their probe into an $80-million subway job that has already proven controversial, transit officials are investigating whether a whistle-blower was intimidated by his bosses after he charged that the contract award was tainted by “insider” information.

Metropolitan Transportation Authority officials are trying to determine whether two agency supervisors harassed the whistle-blower by calling meetings with him last week about his work and reassigning him. The MTA’s investigative arm has warned top officials that this could represent illegal retaliation.

The dispute has fueled two long-simmering questions at the MTA: Are transit officials too close to private-sector contractors to fairly dole out hundreds of millions of dollars in contracts each year? And are government whistle-blowers risking their own livelihoods if they step forward to expose such ethical problems?

At the center of the case is a still-pending contract to manage construction of the Hollywood Boulevard subway extension, a project that has been plagued by ground sinkages and other problems. As a result, the MTA is replacing the construction manager.

Pasadena-based Jacobs Engineering Group won the MTA staff’s recommendation for the job earlier this year. But the whistle-blower, a contracts administrator named Steven Rhee, voiced concerns to top agency executives about the integrity of the selection process.

Rhee and others, including some MTA officials, have raised questions about the role of a consultant who is a subcontractor on the Jacobs team and also worked with the MTA to help prepare documents soliciting applications for the job. Critics contend that this may have given Jacobs an unfair edge over its competitors for the work.

“The conflict of interest is self-evident,” Los Angeles County Supervisor Zev Yaroslavsky, who sits on the MTA board, said. “The only question is, how did a person who’s a contractor for a potential bidder end up in the room working on the (application documents)?”

The consultant, Stefanie Spikell, and Jacobs officials refused to discuss the issue Thursday.

MTA contract officials maintain that Spikell’s role in developing criteria for potential bidders was limited to grammar and punctuation in the application documents. And Jacobs officials have maintained that her dual role posed no conflict in the selection process.

The MTA inspector general’s office, however, is investigating whether she may have had a broader role in the evaluation process, with access to confidential information, sources said. One of Jacobs’ competitors has also demanded to know why some bid evaluation documents were shredded and what role two ex-Jacobs employees, now at the MTA, played in the selection.

Franklin E. White, the MTA’s chief executive officer, urged board members last month to vote on the contract even while the inspector general’s office reviewed the issue. But Yaroslavsky and other board members voiced misgivings, and the Jacobs proposal was tabled pending the outcome of the ongoing inquiry.

“There is the perception in this town,” Yaroslavsky said, “that to get a contract at the MTA, you have to know somebody.”

The investigation has delayed the awarding of the new contract by at least a month. In the meantime, the inspector general’s office has broadened its investigation to include not only possible conflicts in the contract selection, but also allegations of harassment against Rhee, who voiced his concerns orally and later in writing to agency executives.

It is not the first time that county transit officials have been accused of harassing a whistle-blower. A few employees have successfully pressed their claims in court, maintaining that they were punished for trying to expose government wrongdoing.

A jury awarded $518,000 last year to former transit official Robert S. Inouye, who alleged that he was fired for digging out contract irregularities. And a Los Angeles appellate court found three months ago that two transit investigators appeared to have been fired in 1990 for alleging an agency cover-up and confronting their boss about it. Their case is still pending.

Some MTA critics question whether Rhee’s case fits a similar pattern.

The inspector general is investigating allegations that soon after Rhee’s role as a whistle-blower in the case became known among some MTA officials last week, he was called into two meetings with supervisors, sources said. At the meetings, supervisors questioned why Rhee had gone to the inspector general instead of to them with his complaints about the Jacobs contract, and they suggested that his work had been “slipping,” Rhee alleged in a letter to White.

He was temporarily taken off the contracts for two upcoming phases of the MTA’s subway construction and ordered to begin signing in and out of the office, the sources said.

Rhee declined comment on his allegations. White and other MTA officials also refused to discuss the issue.

In a letter last week to the MTA’s chief of construction, the MTA inspector general’s office warned that the treatment of Rhee and a second contract administrator who played a lesser role in the case could represent retaliation that is barred by law.

The letter warned that contract administrators Rod Dawson and Mike Baca, through their contacts with Rhee, “are directly interfering with the statutory authority of the inspector general.”

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State law protects government whistle-blowers who voice their suspicions about official wrongdoing, and Acting Inspector General John B. Wynes wrote that the Rhee case could have the effect of “intimidating or coercing” MTA employees who consider stepping forward.

Dawson, who attended one meeting, said he could not discuss the purpose of the meetings or any other issues until the investigation is finished. Baca did not return calls for comment.

State Sen. Tom Hayden (D-Santa Monica) joined the fray as well, writing White last week.

If Rhee was in fact harassed, Hayden wrote, “this is disturbing and I would urge you to take corrective action immediately. . . . Franklin, I’m confident you’d agree that the honesty and courage of your workers should be rewarded and cultivated, not punished.”