County to Consider Tightening Its Policy on Receiving Gifts

For a Padres fan like John Fullinwider, October 1998 was an exciting time. After 14 years, San Diego’s professional baseball team finally had made it back to the World Series.

For Pacific Bell, last October also held great promise. Los Angeles County was taking final bids for a $250-million telecommunications contract, and Pacific Bell, which already ran much of the county’s telephone system, was one of the finalists.

So when the company found it had two spare tickets to the series’ fourth game at Qualcomm Stadium in San Diego, it gave them to Fullinwider, who happens to be Los Angeles County’s chief information officer, and his daughter.

Things didn’t turn out the way Fullinwider or Pacific Bell had hoped. The Padres lost, and though PacBell won the contract, the deal went into limbo when county supervisors learned of the troubles the telecommunications company has had in providing computer service to California’s state government.

In retrospect, Fullinwider said in an interview, attending the World Series on PacBell’s dime was a bad decision. “It probably was not a wise thing to do, only from the standpoint of the perception of impropriety,” said Fullinwider, denying that the tickets influenced his department’s ultimate recommendation of Pacific Bell’s bid to the Board of Supervisors.

Whether the problem such gifts create is substantial or perceptual, today, the supervisors are scheduled to consider tightening the county’s policy on such presents, which is far more lenient than that at Los Angeles City Hall. The impetus for the discussion is a report that a county contractor helped a friend in the Department of Children and Family Services buy a Mercedes after the businessman won a $4-million contract with that agency.

County auditors are urging a tougher gift policy in response to the case. The district attorney’s office declined to prosecute anyone involved since no laws had been violated, because the county agency’s manager, Tedjitou Dessalegn, was omitted from the list of department officials covered by a state law limiting gifts to certain county employees to $300.

“Clearly, the county has not addressed this issue as other levels of government have,” said Supervisor Zev Yaroslavsky, who wants the county commission charged with reviewing the conflict-of-interest code to reconsider the county government’s policy on gifts. He suggested lowering the limit on gifts from contractors.

Supervisor Don Knabe, who also is proposing a review of the gift policy, said there is a significant distinction between PacBell’s gifts, which he said are less frequent due to various state and county lobbying regulations, and the money given to Dessalegn.

The children’s services gift could not be publicly scrutinized because Dessalegn’s boss did not require her to report it. “To have that kind of money floating around and not be a violation of any policy is kind of scary,” Knabe said.

But PacBell’s money is less troublesome, Knabe said, because it is publicly reported, as well as listed on disclosure forms of county officials who receive the gifts, and can be publicly examined.

Indeed, an examination of those gifts, gleaned from detailed reports PacBell filed with the county, demonstrates how much a part such presents play in the business of doing business with government. What sets the county situation apart is the fact that its contractors make gifts not only to the reelection campaigns of top officials, but also to the army of bureaucrats and aides who make the nation’s largest local government run smoothly.

“Gifts are part of doing business, and [companies] are used to doing it in the business world,” said Bob Stern, a campaign finance expert who authored the state’s ethics laws.

But such gifts can have an impact beyond their monetary value, Stern added. “If there are people waiting outside my office, and one of them wants to take me out to lunch and the other doesn’t,” Stern said, “who do you think I’ll pick?”

Steve Getzug, a spokesman for the telecommunications company, said that in its case the gifts were appropriate.

“It’s a pretty routine course of doing business over there,” he said. “When you do business, especially when you’re soliciting business from a customer, you have got to be able to communicate. Sometimes it’s part of lunch, sometimes at a sporting event.”

PacBell’s gifts are far, far smaller than the money given to Dessalegn, but the stakes are far, far higher.

The telecommunications giant already operates most of the county’s telephones. In fact, Los Angeles County is the company’s second-largest customer, behind the state government.

But early last year, Fullinwider and other county officials put together a package to reconfigure the county’s telephone and computer system. The winning bidder would take over telephone service and provide a new network to enable the county’s disparate computer systems to interface. It would also allow greater public access to public documents on the Internet.

Fullinwider said the system was modeled on one he engineered in San Diego County, which ultimately saved taxpayers money because of changes in technology and telecommunications law. When complete, officials say, the Los Angeles County system will save taxpayers more than $12 million annually.

During 1998, the bidders were winnowed down to three finalists--Pacific Bell, GTE and AT&T.; In December, the three submitted their bids. Although AT&T; made the lowest bid, county officials said its proposal was not very detailed and a county panel selected Pacific Bell as the company that should get the contract, which is valued at about $250 million.

Since the bid process began in early 1998, Pacific Bell has spent $100,000 lobbying county officials, though not all of that money has gone to gifts. Unlike several other companies with business before the county, PacBell has not contributed to elected officials’ campaigns. Its money has been spent on more prosaic events.

For example, 12 county employees and their families attended last year’s USC-UCLA game at PacBell’s expense, according to county reports. One of those listed was Fullinwider, who says he actually bought the tickets for himself, his daughter and father-in-law. The event cost the telecommunications company $1,278.90.

Pacific Bell also paid for two $105 tickets that went to two county managers attending the U.S. Senior Open Championship at the Riviera Country Club in Pacific Palisades last year, as well as sending another county manager and one of Supervisor Knabe’s deputies to Dodger games, county records show. The company has also bought lunches for a wide range of county employees, including aides to nearly all county supervisors--from $10 meals at soul food restaurants to $30 lunches at tony Los Angeles eateries.

The most eye-catching gift, and the only one that individually pushes the limits set down by state law, are the World Series tickets.

The combined value of the tickets is listed by Pacific Bell as $300. Fullinwider did not report them on his statement of economic interest, which he said was an oversight. Coupled with $8.95 worth of “refreshments” at a function at McCormick & Schmick’s in downtown Los Angeles last year, the tickets would push contributions to Fullinwider by Pacific Bell over the $300 annual gift limit set by state law.

But because the tickets were used separately by Fullinwider and his daughter, they may not both count as gifts to the county employee. A spokeswoman for the state’s Fair Political Practices Commission said that if a ticket is given directly to a relative rather than to a public official, the value of the ticket would not count as a gift.

Fullinwider said that at first he did not even realize that the tickets had been paid for by PacBell. He said the telecommunications company’s account representative offered them to him.

Pacific Bell may have won the bidding for the county’s contract, but whether it will get that contract signed is uncertain. In the wake of a Times story last week documenting outages on state computer systems serviced by PacBell, the Board of Supervisors delayed approving the contract until county officials study it more. One supervisor suggested it should be re-bid.

Getzug, the Pacific Bell spokesman, said the company welcomes the review and is confident the county will confirm that PacBell is best for the job.

Knabe argues that the board’s action shows that reported gifts do not taint government decisions. If they did, he said, “obviously, Pacific Bell’s contract would have been approved rather than being continued.”