CSUN Officials Accept Free Work From Contractor : Northridge: Couple says patio rebuilding did not influence oversight of millions of dollars in quake project.

Two university officials with key roles overseeing reconstruction of Cal State Northridge’s earthquake-battered campus authorized millions of dollars in no-bid contract increases with an engineering firm after developing a friendship with a company official and receiving help from firm employees on a home construction job, records show.

University Vice President Bill Chatham and his wife, Jane, special assistant to the president, acknowledge that they became friends with the quake recovery project manager at Law/Crandall Inc. and vacationed with him in British Columbia last year. They frequently entertained him at their home and accepted help from him and three employees who rebuilt a patio cover damaged in the 1994 earthquake.

At the time of their patio repair last summer, records show, the Chathams were negotiating a $10.5-million escalation of Law/Crandall’s work that doubled the company’s contract. The contract expansion occurred as state regulators voiced concerns over the absence of competitive bidding and the firm’s billing practices.

Jane Chatham, in charge of quake repairs at the San Fernando Valley campus, said in an interview that it was probably a mistake for her and her husband to accept the free patio work because it could create the appearance of a possible conflict. But she said the work was done solely out of friendship and did not influence the couple’s oversight of the firm’s contracts.

Neither of the Chathams disclosed the patio work as a gift on the statements of economic interest that state officials are required to file each year. The state Political Reform Act prohibits officials from making decisions that affect those who have given them gifts worth more than $280 during the previous year. Experts said that the Chathams may have violated this provision, though the Chathams and CSUN President Blenda J. Wilson do not agree.

Wilson said she does not believe that the Chathams did anything wrong when they accepted the patio work and explained that the Chathams developed an innocent friendship with the firm’s project manager that may have “obscured the ethics code.”

She said she plans to draft a memo informing campus staff of laws that restrict the gifts they can accept.

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Meanwhile, Law/Crandall has suspended the CSUN project manager, Christopher Baylis. Regional manager Fred Krishon said the action was not taken over the patio project but because Baylis reported that he treated project officials to thousands of dollars in meals improperly billed to the university.

Baylis, who resigned from Law/Crandall after his suspension, has not returned messages or answered letters requesting an interview.

Based in Los Angeles, Law/Crandall is part of an international Atlanta-based conglomerate that specializes in engineering and environmental services. Its top executives include former U.N. Ambassador Andrew Young and Watergate figure John Ehrlichman.

From a minor presence on the California State University, Northridge, campus before the earthquake, Law/Crandall has now assumed a major role as the prime engineering consultant on the mammoth program to repair 58 damaged buildings at an estimated cost of $350 million.

University officials have praised the firm for helping speed construction of portable classrooms and making repairs that enabled the university to start its spring 1994 semester shortly after the quake.

In a letter to Baylis last summer, Wilson cited the firm’s “can-do attitude” and its “unparalleled” skill and commitment.

Jon Regnier, head of planning and development in the CSU chancellor’s office, commended campus officials for their exceptional performance under pressure and for setting up fiscal controls that caught problems.

However, records show that the firm’s contract increases, billing practices and performance have been criticized by state and federal regulators monitoring the project:

* State auditors have disallowed $1.6 million in bills submitted by Law/Crandall, including invoices for unauthorized work, hundreds of hours of overtime and personal expenses such as laundry service for out-of-town consultants and takeout food bills that sometimes exceeded $10,000 a month.

The university also has paid out at least $200,000 for items that should never have been reimbursed, according to auditors. Since December, the university has fined Law/Crandall $40,000 for what auditors have characterized as improper billings.

* State auditors have questioned oversight of a $1.3-million computer program Law/Crandall was hired to develop under a no-bid contract approved by Jane Chatham. The project has fallen months behind schedule and university officials have refused to pay for it. The company promised to deliver the program this past Friday.

* The chancellor’s liaison to the university earthquake recovery project, Matt Babick, warned Jane Chatham in memos last fall that Law/Crandall appeared to be charging too much and that a proposed $5.7-million contract increase appeared to include cost overruns the company should be made to pay for.

Babick recommended reducing the firm’s fees to a “a razor-thin margin of return.” Eventually, Chatham signed the contract with no reduction of fees.

* The state Office of Emergency Services, suggesting that some of Law/Crandall’s administrative billings may have been too high, demanded better accounting of the project’s costs earlier this year. In the aftermath of the quake, the agency had made some allowances, but Chatham told Baylis in a memo this April: “We should no longer expect any ‘special treatment.’ ”

Krishon, the Law/Crandall manager, said he has not seen any of the memos criticizing the company’s work. “I haven’t heard of this before, so I’d rather not say anything about it,” he said. “It’s all news to me.”

As for the Chathams’ patio construction, Krishon said: “If we could go back in time, I would have perhaps given a directive that there shall be no neighborly help [for government clients].”

He said it was not “standard practice” for company employees to do free work for clients but this case is a “non-issue” because employees were not ordered to help out and merely volunteered their time.

One former Law/Crandall employee, architect Charles Chagnon, said he was directed by a superior to contact city inspectors about getting a building permit for the Chathams’ patio. But before he could follow through, Chagnon said, Baylis said he would do it himself.

Chagnon, who resigned from the company earlier this year, said he was bothered by what he saw as an overriding priority at the company to “please the client” both on and off campus.

“We were trying to get in good with these people--that’s what it comes down to,” he said in an interview. “We wouldn’t have done [the patio work] for free if these people weren’t signing the checks on a $10-million contract. To me, it was more than a coincidence.”

Company officials said they were unaware that Chagnon or anyone else had been asked to assist with the permit.

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During a social visit to the Chathams’ Northridge home last summer, Baylis saw their damaged patio cover and suggested that Law/Crandall employees could help rebuild it, according to Jane Chatham.

The couple had sustained “quite a bit of damage” to their single-story tract home during the quake and had hired contractors to repair most of it, but not the back-yard patio cover, she said.

So Vinceena Kelly, a Law/Crandall architect who was working on the CSUN project, came to the house and looked over the patio, said Jane Chatham. Kelly prepared a schematic drawing for repairing the 18-by-22-foot patio cover attached to the back of the Chathams’ home, according to plans filed with the city building department.

Then, Law/Crandall employees gave the Chathams a list of lumber and other materials they needed to buy, according to Jane Chatham.

Chatham said she could not remember exactly when the work was done but that it took place during a weekend day in July or August. She said she barbecued a meal, while Kelly, estimator Jack Haney and operations manager Marc Bissell from Law/Crandall rebuilt the patio cover.

Baylis, who was also supervising the university project that weekend, left campus at least four times to check on the patio during six hours of work, Chatham recalled.

She said she and her husband paid for the building materials but declined to say how much they cost or provide receipts. On a building permit, the Chathams estimated the value of the job at $2,500.

Kelly, who has left Law/Crandall, declined to be interviewed. Haney did not return phone calls.

Bissell, who said he could not recall who asked him to help out, said he and his co-workers showed up at the Chathams’ house with hammers and nails for what he likened to an old-fashioned barn-raising.

“It was mostly just a friendship-type deal,” he said. “You know, burgers and beer and let’s go build a patio.”

Bill Chatham said he has no regrets about accepting the help from company employees. “These were my friends and colleagues, and their employer [at Law/Crandall] got no benefit from this,” he said. “What they did as friends is really my personal business.”

Jane Chatham said it was probably a mistake to accept a favor from employees of a company she oversees. “Had I to do it again, I would not. But there’s a lot of reasons for things that happen with human beings . . . when you’re pressed for time and different things are going on, I guess,” she said. “Mistakes can happen.”

In early fall, after the patio cover was repaired, the Chathams took a vacation to British Columbia. Baylis joined them for a weekend.

Jane Chatham said they took turns picking up the tabs for meals, as was their practice in Los Angeles.

The Chathams, whose combined annual income is about $180,000, appear as occasional dinner guests of Baylis on expense accounts filed with the university. The price of the five meals ranged from $19 to $30 per person.

In all, Baylis sought reimbursement for about $10,000 in meals during the last six months of 1994, listing administrators, professors and others at the university as his guests.

Most frequently listed on his expense accounts was Charles Thiel, an engineering consultant who heads the Cal State Seismic Review Board and was hired by the university to review contracts and construction plans for Law/Crandall and other firms.

Baylis reported picking up the tab on 25 occasions when he dined with Thiel during the last half of 1994, according to company invoices. The cost per person of those 25 meals totaled about $700, records show. The price per person ranged from $8 at a pizzeria to $60 at a Pasadena steakhouse.

Thiel acknowledged in an interview that he occasionally dined out with Baylis. After checking his calendar, he said he did not attend any of the meals reported by Baylis--an assertion that he had repeated in a letter recently provided to CSUN’s President Wilson.

Auditors disallowed virtually all of Baylis’ meal expenses.

Public officials are required to report all gifts, including meals, valued at $50 or more.

Jane Chatham said she did not report meals from Baylis because they were offset by meals she bought him. As for the patio work, she said she did not consider it a gift because Law/Crandall employees volunteered their time out of friendship rather than professional obligation. Furthermore, she pointed out that she prepared a barbecue for the Law/Crandall employees while they worked on the patio.

Jeanette Turvill, spokeswoman for the state’s Fair Political Practices Commission, said state ethics law requires that public figures give something of “equal consideration” when accepting gifts, and hosting a barbecue would not meet that standard when weighed against construction of a patio cover valued at $2,500.

“If that’s all it took, I’d have the most beautiful back yard in the world,” Turvill said. “I’d have people doing my landscaping and give them a glass of water.”

Asked whether free design and construction work could be considered an unreported gift, Turvill said: “Absolutely.”

Dana Reed, a private attorney specializing in political finances and ethics issues, said the Chathams’ failure to report the patio work and abstain from making decisions that affected Law/Crandall could be “a serious and major violation of the Political Reform Act.”

Both Jane and Bill Chatham have been among those university officials making decisions that directly affected Law/Crandall’s burgeoning work on campus.

Before the earthquake, the firm had received several small jobs after competing with several other companies to win a designation as the campus’s consulting structural engineer.

After the quake, the chancellor’s office and federal officials gave campus administrators broad authority to suspend normal procedures in authorizing quake repair work.

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Law/Crandall was initially authorized to receive about $200,000 to assess quake damage. Several weeks later, the company received a no-bid contract for $9 million, signed by Jane Chatham. She later signed three more contract escalations, bringing the company’s total contract amount to $19.6 million.

Regnier, in the chancellor’s office, said it is university policy not to seek competitive bids for professional services such as those provided by Law/Crandall.

But one FEMA official said that when a project has grown as dramatically as the CSUN engineering work, it is good practice to open up the job to competing firms.

“If you offered a job to the engineering community and said, ‘We have a $5-million contract,’ and it turns out it’s really a $20-million . . . in fairness to everyone, you would probably want to go out and re-compete,” said Larry Zensinger, FEMA’s federal coordinating officer for the Northridge earthquake.

In memos on file at the university, Bill Chatham said the decision to expand Law/Crandall’s contract was justified by the firm’s familiarity with the campus. That, he said, should save the school money.

But Babick, the chancellor’s liaison to the CSUN recovery project, said in a memo last fall that Law/Crandall’s costs for engineering services represented “an unusually large percentage” of the total project cost--with uncertain benefits. “Campus discussions have shown,” he said, “that no one outside of Law/Crandall knows whether Law has efficiently provided the contemplated $14,849,000 of engineering services.”