Conflicts of Interest Stymie MTA Vote on Bus Contract

The Metropolitan Transportation Authority’s board Thursday postponed the award of a $227.7-million contract to private bus firms after a current contractor blocked a vote by disclosing that its own campaign contributions created a conflict of interest for six directors.

The board was unable to approve giving the contract to operate private buses on MTA lines after representatives of a losing bidder, Laidlaw Transit Services, used their history of political contributions to effectively prevent directors from voting without risking a violation of state law.

To crack down on campaign contributions influencing decisions on contracts, state lawmakers passed an unusually strict law in 1997 that prevents the transit agency’s board members from voting on issues if they have received more than $10 in campaign contributions during the last four years from companies doing or seeking business with the MTA.

Four of the 13 board members already had been identified as having a conflict of interest when Laidlaw attorney Ellen Berkowitz said County Supervisors Zev Yaroslavsky and Don Knabe also had conflicts because they had received contributions of more than $10 from Laidlaw or a subsidiary.

Laidlaw’s decision to invoke the law to halt the award of the contract to competitors infuriated several board members, who sharply criticized both the firm and the law for tying their hands.

Yaroslavsky bitterly protested his being named at the last minute as a recipient of a Laidlaw contribution, even though his name, and those of other recipients on the MTA board, had been listed in a document submitted to the agency last fall. “I resent being put in this situation by any contractor,” Yaroslavsky said.

He accused the firm of using the information at the “11th hour and 59th minute” to prevent a vote on an issue in which it had a financial interest. In an unsuccessful attempt to get around the problem, Yaroslavsky asked: “Can we return the contributions?”

Later, he suggested delegating the decision to MTA Chief Executive Officer Julian Burke, another approach that was rejected.

Board member Jose Legaspi called the firm’s tactics “extremely insulting.”

After the agency’s legal counsel, Steven Carnevale, said he could not guarantee that the six board members could vote under the circumstances, the decision was delayed until next month. “I’m not the person who gets convicted if I am wrong,” Carnevale said.

The law allows the full MTA board to act on urgent matters such as contracts even if a conflict exists, but only when all directors without a conflict are present. That was not the case Thursday.

Ironically, Laidlaw’s action also stopped the MTA board from approving a temporary extension of the firm’s existing contract to operate six local bus lines. The current pact expires at the end of May.

Laidlaw Vice President Irwin Rosenberg filed a formal protest of the MTA staff’s recommendation to award the five-year contract with three one-year options to rivals First Transit Inc., Coach USA/Progressive, MV Transportation and R&D; Transportation. Laidlaw demanded that the contract be put out to bid, but the protest was rejected by the MTA.

The proposed contract also drew opposition from representatives of the South Coast Air Quality Management District, environmental groups and the Bus Riders Union because the MTA proposes to use 150 new diesel-powered buses for the service. The AQMD is considering adoption of a regulation in June mandating that transit buses in the region be powered by clean-burning fuels such as natural gas. State officials in 1998 designated diesel soot as a carcinogen.

Julie Masters, an attorney with the Natural Resources Defense Council, strongly opposed the purchase of diesel buses, saying that it violates the letter and spirit of the MTA’s program to purchase buses powered by clean fuels.

The MTA board also delayed approval of a five-year business plan that calls for the MTA to provide increased financial support to Access Services Inc., a company that provides service to the disabled across the county.

Board members sought the postponement after hearing complaints of service and computer problems, including an incident Monday night in which a disabled man in a wheelchair, Joseph Schine, and a friend, J. Graigory, complained of long delays in getting a van to pick Schine up at a bar in Burbank. Graigory said the driver later called Schine “a faggot.”

Access Services executive director Richard De Rock promised the board the incident would be investigated and the driver fired if Schine’s allegation is verified.