MTA Fires Review Panel Appointee Who Voted Against Agency

In an unprecedented maneuver that critics said could undermine the system for settling subway construction disputes, the Metropolitan Transportation Authority has fired its own appointee to an independent review panel because he voted against the agency in a recent controversy over the troubled Hollywood leg of the subway, officials disclosed Wednesday.

The appointee, Brooklyn engineer Eugene F. Casey, had joined in a unanimous ruling by the three-member Disputes Review Board in July, finding that the MTA’s dismissal of the main contractor on the Hollywood tunnel made “no sense at all.”

MTA officials were infuriated by the decision, and construction executive Charles W. Stark told Casey in an Aug. 25 letter that he never should have taken part in it. The engineer’s actions, Stark said, “demonstrated personal bias in favor of the contractor” and suggested that the review panel had become a mere “mouthpiece” for the contractor.

But the contractor, Los Angeles-based consortium Shea-Kiewit-Kenny, promised to fight the MTA’s firing of Casey, saying that the decision sets a dangerous precedent that could destroy the review board’s independence in hearing subway disputes.

“The open threat made by the MTA, i.e. rule in our favor or we will fire you, would, if tolerated, imperil the impartiality of any member the MTA might appoint,” SKK project manager E. O. Dixon told Stark in an Aug. 30 letter. The contention that Casey could be fired “for cause” for ruling against the MTA is “absolutely outrageous,” Dixon said.

It was the first time in the history of the MTA’s dispute resolution program that the agency had fired one of its appointees. Established five years ago, the program uses panels of three independent industry experts to try to settle disputes between the MTA and its subway construction contractors.

MTA spokesman Bill Heard said transit officials are proposing changes in the way panel experts are selected to prevent the appointment of “hired guns.” But he stressed that the agency “remains committed” to the program as a way to avoid costly lawsuits.

Some MTA observers were skeptical, however.

“The whole idea of a disputes resolution board is to keep the agency honest and to keep the contractor honest,” said Michael Gagin, editor of the Rose & Kindel MTA Report, a private industry newsletter. “To shoot the messenger because you don’t like the message seems to me to undermine the very purpose of the board. The idea isn’t that the DRB will serve as a rubber-stamp for MTA positions. If it is, you don’t need the board.”

Said Peter Shea, vice president of J. F. Shea Co., the lead firm in the SKK tunneling partnership: “This is unheard of, absolutely unheard of.”

Transit officials fired SKK in June as the main contractor on the Hollywood leg of the subway, saying they had lost faith in the company’s ability to manage the mammoth job after a series of legal, construction and safety setbacks. Most notable was a 70-by-70-foot sinkhole that engulfed part of Hollywood Boulevard in June, halting construction.

But SKK brought the matter before the disputes review board, which includes one representative appointed by the contractor, another by the MTA and a third agreed upon jointly by each agency’s representatives. The three members on the SKK contract have been paid a total of about $240,000 over the last three years for trip expenses and professional billings of up to $200 an hour, SKK officials said.

In its controversial July 25 ruling, the dispute review board characterized SKK’s work as “impressive” and “outstanding,” and it warned that the firm’s firing would mean “horrendous” delays and cost overruns for the subway project.

The MTA, arguing that the review board had no authority to hear the issue once SKK was fired, did not bother to take part in the panel’s hearing on the contract and has refused to honor its ruling. That has thrown the matter into the civil courts, where SKK is suing the transit agency for reinstatement to the job and about $70 million in disputed billings.

MTA officials told Casey in the letter firing him that the panel’s findings amounted to “hyperbole” and “gratuitous and self-serving statements on behalf of the contractor.”

Said MTA spokesman Heard: “Our man bought into that, and we lost faith in him.” Casey also was fired from the two other review boards for the subway project, both handling station construction jobs awarded to a Kiewit/Shea partnership.

Casey refused comment Wednesday on the MTA’s decision to fire him, as did the other two review board members.

Peter M. Douglass, the panel chairman, said it is still unclear whether the board itself even remains in existence. “It would appear,” he said, “that it depends [on] who you talk to.”