State Drops Probe of College Officials : Ethics: Panel finds insufficient evidence of a conflict of interest by two Cal State Northridge administrators. They had accepted free work from employees of a contractor that helped rebuild the campus.

The state ethics office has dropped a conflict-of-interest investigation involving two top Cal State Northridge administrators who accepted free home construction work from employees of a contractor that helped rebuild the earthquake-battered campus, officials disclosed Friday.

The decision closes out a state review requested by CSUN President Blenda J. Wilson in June against two of her top aides after a Times story detailed the administrators’ relationship with an engineering firm whose work they oversaw.

The administrators, Bill and Jane Chatham, had developed a friendship with the project manager for Law/Crandall Inc., which had secured a no-bid contract for engineering in the $350-million quake rebuilding. The firm’s project manager vacationed with the couple last year in British Columbia, and he and three other Law/Crandall employees spent a day last summer rebuilding the Chathams’ home patio cover, damaged in the 1994 Northridge earthquake.

At the time, the Chathams were involved in negotiating a $10.5-million increase in Law/Crandall’s contract that doubled the firm’s quake work. Ethics experts raised questions about whether the Chathams may have violated the state Political Reform Act, which bans officials from taking part in decisions affecting anyone who has given them gifts worth $280 or more in the last year.

But the state’s Fair Political Practices Commission closed out its investigation, telling Wilson in a letter last week that “there appears to be insufficient evidence to prove a potential conflict of interest violation.”

The FPPC said it could not demonstrate that the construction work represented a “gift” under state law in part because the Law/Crandall employees appeared to have volunteered their time to work on the Chathams’ home. Moreover, the FPPC said, the employees had no ownership interest in Law/Crandall and were not compensated for their work.

Bill Chatham, associate vice president for facilities, and his wife, Jane, special assistant to the president for earthquake recovery, did not return phone calls Friday. The couple have said the construction work was a personal favor that never influenced their oversight of Law/Crandall.

Wilson announced the FPPC’s decision as part of a newsletter to campus faculty and staff distributed Friday.

Wilson reminded campus officials that they “must hold themselves to the highest standards of ethical judgment.” In the past, she has said the Chathams made “a serious error in judgment . . . which created an appearance of impropriety.”

The Chathams continue to help coordinate the campus’s quake recovery effort. But in a move aimed at “maintaining public confidence” in the project, CSUN officials announced in June that they were assigning a new administrator from the chancellor’s office to work above the Chathams in overseeing the recovery effort.

The university is also seeking a new engineering consultant to finish the work that Law/Crandall started. Officials at Law/Crandall, which is expected to finish its contract by the end of September, could not be reached for comment Friday.

CSUN spokesman Bruce Erickson said many on campus are glad to have the controversy behind them so they can move ahead with the years-long task of rebuilding the campus.

“The campus . . . generally has a much greater sensitivity to the fact that we are public servants,” he said, “and we have a special obligation to avoid even the appearance of a conflict of interest.”