‘Criminals’ and ‘Cheats’ Prey on MTA, Panel Told

The Metropolitan Transportation Authority’s inspector general declared Wednesday that the MTA has become a target “for cheats and criminals.”

“We have a very troubled agency,” he said.

It was the latest body blow to a controversy-ridden agency. Arthur Sinai, pressing for more investigators and auditors to probe the “waste, fraud and abuse” he believes afflicts the MTA, told members of the agency’s Finance and Budget Committee that he and his staff are involved in “very difficult, complex investigations.”

They include an ongoing criminal probe into alleged improper influence and bias in the handling of a lucrative consulting contract for the proposed subway extension into the Eastside.

“With the amount of money being spent by the MTA, it should be no surprise that we have been and still are the target of those who unjustly or criminally enrich themselves at MTA expense,” Sinai said.

The inspector general is asking for a 10% increase in his budget, which would bring it to $3.1 million for the next fiscal year. The committee unanimously approved his request, a decision that must be ratified by the entire MTA board.

Without mentioning open cases by name, Sinai’s annual report noted not only the active investigation of the Eastside extension contract, but also his department’s recent work with federal prosecutors. That collaboration already has sent a former MTA manager to federal prison for accepting bribes in the awarding of insurance contracts.

A former MTA controller was indicted by a federal grand jury in January and is awaiting trial on 29 counts of defrauding the agency after allegedly receiving kickbacks for hiring temporary employees.

The inspector general’s budget request was passionately endorsed by county Board of Supervisors Chairman and committee member Zev Yaroslavsky, who told Sinai: “You haven’t gone far enough” in ferreting out corruption.

“It’s an awkward situation when you have an inspector general even in a perfectly clean organization--which this is not by any stretch of the imagination,” the supervisor said.

“You have a very difficult job,” Yaroslavsky added. “Nobody likes an inspector . . . whether it’s a plumbing inspector, building inspector or a corruption inspector.”

Yaroslavsky cautioned Sinai, a veteran investigator for the federal government, to be “very careful of people who want to hurt you and damage your credibility.”

The supervisor’s blunt remarks came immediately after board member John Fasana, a Duarte city councilman, suggested that the inspector general’s activities were causing morale problems at the MTA.

Sinai shot back that the agency’s morale problems cannot be put on his shoulders. “We are a very troubled agency,” he said. “It troubles me to see the problems the MTA has.”

Pressed by Yaroslavsky to be specific, Fasana complained that individuals who are investigated by the inspector general never get information that they are cleared.

Sinai, whose office was established to investigate waste, fraud and abuse at the $3-billion-a-year agency, said the MTA suffers from a host of suspicious problems, including what he cryptically called “the odor problems.”

While his office’s efforts to expose kickbacks and bribes have drawn headlines, none has received more attention than his bombshell announcement in October that he had launched a criminal investigation into a $65-million contract to oversee construction of the subway on the Eastside.

Sinai’s announcement minutes before a crucial vote forced the transit agency board to postpone awarding the contract.

The board had been expected to give the job to a politically well-connected group, Metro East Consultants, that had been ranked last by a panel of independent experts. Despite the ranking, former MTA chief executive officer Joseph E. Drew had recommended that Metro East get the contract over the first-place firm, a consortium called JMA.

Without mentioning the Eastside contract, Yaroslavsky said again that he is concerned that some contractors are refusing to bid on MTA jobs after being told that they must hire certain subcontractors to get MTA business.

In his formal request for additional funds, Sinai said his office has “uncovered several significant weaknesses in MTA financial management and other processes” over the past two years. “As currently ongoing investigations are concluded,” he said, “additional revelations will be brought to light.”

MTA Board Chairman Larry Zarian praised Sinai’s performance and said his office plays an important role that needs to be respected. Zarian pointedly said board members need to keep their hands off his operation.