MTA Official Charged With Taking Kickbacks : Subway: Overseer of insurance operations allegedly accepted $25,000. Lawyer says he will plead guilty.

In the first charges to grow out of a yearlong criminal investigation into the Los Angeles subway project, a top Metropolitan Transportation Authority administrator was charged Friday with accepting more than $25,000 in kickbacks from contractors who landed consulting deals.

Abdoul Sesay, who oversaw insurance operations for subway construction until he was suspended Friday, plans to plead guilty to felony kickback and tax-evasion charges, his lawyer said. Sesay is expected to cooperate with prosecutors as part of an agreement.

The 45-year-old Los Angeles man “decided it was in his best interests” to admit guilt in the case, said attorney Ronald J. Nessim. “He believes he’s doing the right thing now and there’s some satisfaction in that. He’s on the road to getting this behind him.”

The charges, which rocked MTA headquarters, are the first filed in connection with the trouble-plagued $5.8-billion subway project as part of a probe into one of the nation’s biggest public works projects by the FBI, U.S. Department of Transportation inspector general, MTA inspector general and IRS.

Authorities are known to have been investigating criminal allegations that some subway contractors had defrauded the MTA in their construction work while others misstated their minority-business credentials. But Friday’s charges broaden the scope of the probe to include the first formal allegations that a government official was involved in criminal activity.

“The charges themselves are serious and the investigation is continuing,” said Assistant U.S. Atty. Richard E. Drooyan, chief of the Los Angeles office’s criminal division.

“We’re dealing with a large public works project, and there’s a danger that people who have responsibility for public funds may be tempted to benefit themselves,” he said. “One of the purposes of our investigation is to determine whether that has happened.”

The charges come in the same month that federal agents raided the offices of the firm building the Hollywood leg of the subway and seized records that investigators said would show the company used substandard materials in tunnel construction. The contractor, Shea-Kiewit-Kenny, has denied any wrongdoing, but it was fired last week by the MTA.

Sesay, as the $91,000-a-year risk manager for the MTA and one of its predecessors, the Los Angeles County Transportation Commission, was responsible for soliciting bids and awarding contracts to insurance companies and other businesses involved in assessing potential liability in connection with the MTA’s rail projects.

Investigators with the MTA inspector general’s office began to look at Sesay after receiving a tip about him, said Supervisor Mike Antonovich, an MTA board member. That tip led to evidence that Sesay had allegedly used his position to make money off contractors who were looking to gain work from the transit agency, officials said.

Sesay was charged with accepting illegal payments totaling $25,100 from unnamed contractors in connection with a federally funded project and with filing a false income tax return.

Authorities alleged in court papers filed in federal court in Los Angeles that Sesay “corruptly accepted” a $20,000 bribe in 1992 from an unidentified insurance consultant in return for recommending that the firm be hired as a subcontractor under a $305,000 contract. Authorities would not say how much the subcontractor received.

Sesay is listed as the transit agency’s representative on the contract, records show.

He also is accused of accepting an additional $5,100 from an insurance consultant last summer in return for helping the firm get work under a contract that totaled $80,000. In addition, he is accused of underreporting his gross income in 1992.

Public records show that a New York insurance consultant, McAllister & Associates, was awarded both contracts in question to advise transit officials on insurance coverage and risk management issues. Representatives of the firm did not return calls for comment.

Sesay faces a maximum penalty of 23 years in prison and a maximum fine of $750,000. He is due to be arraigned July 31.

Prosecutors said they have not decided whether to bring charges against any contractors involved in the case.

“These charges reflect our continuing commitment to identify and prosecute instances of fraud and corruption in connection with this project,” said Assistant U.S. Atty. Marc S. Harris.

The MTA, hit with a string of setbacks that have jeopardized the political and financial future of the subway project, was abuzz with talk of the charges Friday as news spread.

“It’s a pretty difficult thing to imagine--a lot of people just don’t believe he would have done anything like that,” said one MTA official who worked with Sesay on insurance issues. “It’s hard to believe anyone would take those types of chances to steal from the agency.”

MTA Inspector General Arthur Sinai told agency directors about the charges at a retreat in Glendale.

“It hit me like a ton of bricks,” said board Chairman Larry Zarian.

“You never want to see one of your trusted employees be charged with such a tremendously heavy crime,” Zarian said. “We’re dealing with human beings and there are good human beings and bad human beings, honest and crooked. And if in fact these charges are correct, we’re dealing with someone who’s crooked.”

Zarian acknowledged that the charges may turn public sentiment further against the project.

“It’s devastating to me that it comes at an inopportune time,” he said. “But at the same time, we can’t let this one charge cast a shadow on the rest of our employees, as if this sort of thing is rampant.”

Before coming to Los Angeles in 1990, Sesay served as risk manager for the city of Philadelphia and as director of insurance for the city of New York.

In an interview with Business Insurance magazine last year, he talked about the difficulty of guiding the subway construction through a minefield of litigation, having to withstand insults at public meetings and threatening calls at home.

“You go home and you think about whether it’s worth it,” he said. “It’s so stressful.”