For Burke, Record of Success Is on the Line

Like MTA bus riders on the street and drivers on the picket lines, these are tough times for Julian Burke.

The 73-year-old corporate turnaround specialist helped to clean up the Teamsters’ corrupt Central States Pension Fund, sold off assets of the bankrupt Penn Central Railroad, revived two major insurance companies, and managed assets of failed savings and loans for the federal government’s Resolution Trust Corp.

“I think I know a lot about how to bring order out of what apparently is some chaos,” Burke said three years ago after being tapped by Los Angeles Mayor Richard Riordan to run the Metropolitan Transportation Authority.

Despite his success in solving some of the MTA’s most vexing problems, Burke has been unable to make peace with the MTA’s powerful unions. The bus and rail system that he oversees as chief executive officer of the MTA has been shut down for nine days, leaving 450,000 riders without the public transportation they depend on.

Negotiations resumed Sunday, but both sides refused to comment on any progress because a news blackout was imposed by them Saturday night.

Even before the walkout, Burke acknowledged that a strike would tarnish his track record in turning around the troubled agency.

But for months, as negotiations with the unions went nowhere, Burke stayed above the fray, letting others try to hammer out a new contract at the bargaining table. It was not until the strike appeared imminent that he became directly involved, sitting down face-to-face across the table from union negotiators.

After dealing with the MTA’s tough, hired-gun labor negotiator since last spring, union leaders welcomed his presence. They say the more personable and powerful Burke is someone they can talk to and deal with.

James Williams, head of the United Transportation Union, said he has “tremendous respect” for Burke, who he feels “has surpassed all expectations as CEO of the MTA. He has helped restore credibility to the agency.”

Williams, who can scarcely disguise his contempt for the MTA’s chief negotiator, Tom Webb, has nothing but good things to say about Burke.

“He’s a fine gentleman,” Williams said. “We feel he suffers from the fact that he deals with a highly political board which does not necessarily give him the ability to do the things that he might otherwise be able to do.”

Even as Burke acknowledges the toll the strike is taking on the MTA’s passengers and workers, he is determined to reduce the cost of operating the nation’s second-largest bus system.

Usually soft-spoken, Burke is outspoken about the need for the transit agency to become more efficient. “We have high wages and very restrictive work rules,” he said.

Burke said the transit agency must cut the $98-an-hour cost of operating an MTA bus by $2 an hour. He is quick to point out that the MTA is offering its drivers a wage increase and maintenance of health benefits.

But the agency is insisting on reductions in overtime and changes in work rules to save $23 million over the three-year life of a new contract with the United Transportation Union.

“We owe it to our taxpayers,” Burke said. “We owe it to our riders to make [the bus system] more efficient so we can continue to expand our service.”

The man known at the MTA as “Julian” is no stranger to tough assignments. After receiving his law degree at Georgetown University in 1954, he went on to work as a clerk for a U.S. Supreme Court justice. He later joined the law firm of O’Melveny & Myers where he met and became friends with Riordan, then a young attorney.

By 1975, he had joined the Palmieri Co., a Los Angeles firm that specialized in assisting financially troubled corporations. Burke established a reputation as a master problem solver, a determined, focused, goal-oriented manager with a keen ability to achieve compromise between competing interests in highly complex businesses.

Such skill would prove useful to the Palmieri Co.’s management of all the nonrail assets of the bankrupt Penn Central Railroad, including hotels, real estate, leasing companies and other businesses. Palmieri worked with the bankruptcy trustee and creditors to reorganize and liquidate the assets.

Cleaning Up Other Situations

The same qualities that made Burke a success there were brought to bear on behalf of the U.S. government when Palmieri was chosen to take over $1 billion in real estate assets of the Teamsters’ notoriously corrupt Central States Pension Fund. The real estate assets west of the Mississippi included loans made by the Teamsters’ pension fund for casinos and land purchases in Las Vegas and financing for the La Costa resort in San Diego County.

In the midst of the savings and loan crisis, Palmieri and Burke handled numerous cases for the Resolution Trust Corp. involving the management and liquidation of extensive real estate assets of defunct thrift institutions.

When he took charge of the MTA three years ago this month, Burke said his style in running troubled companies is “not to slash and burn, but to settle down the organization.” He was originally paid $180,000 a year, but took a voluntary pay cut two years ago when the agency was eliminating some jobs.

Running a public agency--let alone the MTA--was not one of Burke’s career goals. It was only after the MTA board was unsuccessful in finding a candidate for the top job that Riordan turned to Burke, who had served on a team that examined the MTA’s budget before the mayor became chairman of the transit agency.

“I got snagged into this job,” Burke said recently. “I thought I was here for four to six months.”

Over time, Burke said, he has become “quite fond” of running the $2.5-billion-a-year agency. “It is absolutely the most important work I’ve done in my entire life, and I’m not a young man,” he said.

As a resident of Los Angeles for 44 years, Burke understands the importance of transportation in the nation’s most populous county.

He pushed hard for a network of high-tech rapid buses that can move swiftly through traffic by keeping traffic lights green. But the MTA board scaled back the proposal to two routes that started in June from the Westside to the Eastside and across the San Fernando Valley.

A determined problem solver, he brought badly needed financial stability to the MTA, helped restore the agency’s damaged reputation in Washington and Sacramento and has overseen the completion of the Metro Rail subway to Hollywood and the San Fernando Valley.

He succeeded in bringing a halt to subway projects for the Eastside and Mid-City area that the MTA could not afford.

Burke has played an active role in the appeal of a federal judge’s order that the MTA buy more buses to reduce overcrowding and improve service. He prefers a less ambitious plan to comply with a federal consent decree reached with bus rider advocates.

Taking a politically unpopular stand, he twice recommended that the board raise bus and rail fares, to no avail.

But Burke has been far less successful on the labor front.

Concern about possible job cuts prompted the agency’s bus and rail supervisors to join the American Federation of State, County and Municipal Employees union during his tenure. Without management personnel to take over for striking bus drivers and train operators, the MTA has been unable to run its 2,000 buses or trains.

Efforts to create a transit zone in the San Fernando Valley, where MTA bus routes would be operated by a new agency, have proven to be bitterly divisive and continue to hang like a cloud over the contract talks with two of the agency’s unions.

On Sunday, both MTA officials and their union counterparts were ensconced at negotiation headquarters at the Pasadena Hilton, where they maintained tight lips.

In fact, at one point Burke walked by a hallway and overheard MTA spokesman Bill Heard explaining to a reporter that he had been ordered not to comment.

“I said nothing,” Burke snapped in Heard’s direction, as if to make it clear to everyone that he had not broken the press blackout and talked to a reporter.

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Times staff writer Peter Y. Hong contributed to this story.