Firms Question Fairness of Carson Mayor’s Dealings

A waste hauler and a developer seeking to do business with the city of Carson each say the mayor referred them to his personal lawyer, who asked for fees of $1 million or more in exchange for help delivering City Council approval.

The two companies said they refused and in both cases lost out to competing firms.

Waste Management, which was seeking a multimillion-dollar contract to collect garbage, and Rand Pearlman Ventures, which wanted to develop a shopping center, each said their efforts to do business with Carson met the same response: Mayor Daryl Sweeney strongly urged them to hire his lawyer, Robert Pryce, as a lobbyist.

Waste Management officials said their concern about the propriety of the deal Pryce offered prompted them to hire a former U.S. prosecutor, Steven Madison, to advise them on the matter. When he went to Sweeney, who also has a vote on the City Council, Madison recalled the mayor saying: “ ‘You need three votes [to get a City Council majority] and if you have to pay Mr. Pryce . . . to get those three votes, then you should do it. . . . You should pay whatever he’s asking you to pay.’ ”

Waste Management declined. A competitor hired Pryce and won the commercial carting contract in Carson, a city of 90,000 east of the intersection of the Harbor and San Diego freeways.

Sweeney, whose residence was searched by the FBI and the IRS on Tuesday, declined to comment and referred questions to a lawyer he hired this week, a distant relative named John Sweeney. He also declined to comment and federal officials refused to say whether the raids were made in connection with city business.

Pryce also did not respond to repeated requests to be interviewed for this story.

Waste Management

Officials at Waste Management, whose company name has a historical association with corruption, said recent efforts to burnish the company name made them sensitive to any appearance of impropriety.

Waste Management, a national firm headquartered in Houston, and one of its predecessors had collected trash in the city for decades, and its contract was up this year. The company wanted to secure a renewal without having to bid against competitors.

John Newell, a Waste Management attorney, said that last year the mayor suggested the company hire Pryce, a lawyer in Carson who also has worked for the city.

Pryce met with Waste Management officials and asked for a $1 million fee, Newell said. He was orally “guaranteeing us the [contract] extension,” Newell said.

In a series of letters in March and early April, reviewed by The Times, Pryce elaborated. He asked Waste Management for $300,000 right away and another $300,000 “upon the City of Carson’s approval of your hauling contract for residential and commercial hauling.”

Waste Management replied that it did not pay success-based fees and retained lawyers only on an hourly basis. Pryce changed his proposal. He specifically said in another letter that he was not guaranteeing success. He requested $660,000 as a “retainer” and drafted an agreement for an additional $297,000 if Waste Management’s long-term residential and commercial carting contract was renewed and the city resolved an unrelated financial dispute with the waste hauler.

Waste Management sought guidance from Madison, a lawyer in private practice who, as a former assistant U.S. attorney in Los Angeles, had helped successfully prosecute Walter R. Tucker III, a former Compton mayor and member of Congress, for extorting bribes in the early 1990s.

Madison said he concluded that Pryce was making “a very crude, odd solicitation . . . A reasonable observer [could] conclude that . . . either Pryce himself was promising to deliver something that couldn’t properly be promised or that Pryce was trading on his relationship with the mayor or council members in a way that wouldn’t be appropriate.”

UCLA law professor Daniel Lowenstein, principal author of California’s quarter-century-old Political Reform Act, said Pryce’s alleged statements are subject to wide interpretation. He said California law has long barred lobbyists from accepting payments contingent on the outcome of any proposed state legislative or administrative action; that does not apply to municipalities.

Madison said he arranged a meeting with the mayor and told him that “anyone would think there is something suspicious here,” expecting that the mayor would “want to correct the record immediately.”

The former prosecutor, who is also a Pasadena City Council member, said Sweeney told him Waste Management should pay what Pryce asked.

Waste Management did not pay, and three weeks later, on May 1, Pryce sent another letter, withdrawing his offer to represent the company.

Waste Management officials, still eager to avoid open bidding, went back to Sweeney and asked if he could recommend someone else to help.

Sweeney then suggested Lee Duncan, a Lynwood tree-trimmer, “as someone who could help us with our contract,” Newell said.

2 Versions of Conversations

Newell said Duncan proposed that Waste Management pay him $40,000 per month to trim trees interfering with garbage trucks in Carson, or $3.3 million over the seven-year life of the contract.

Waste Management, which usually contracts with tree trimmers on an as-needed basis, figured the service was worth no more than $5,000 per month and said it turned Duncan down.

Duncan, an African-American who describes his company, California Western Arborists, as a small tree-trimming operation, gave a different account of the conversations.

He denied making the offer Newell outlined and said Waste Management approached him, saying it wanted to include him as a minority contractor in its trash-hauling proposal.

Duncan said he knows and likes Sweeney but that the mayor’s name never came up in his discussions with Waste Management.

A letter Duncan wrote to Waste Management last October, reviewed by The Times, touted his company and proposed a partnership. The letter does not mention a fee.

“In my opinion it would be mutually beneficial to combine our services and play on the strengths of both companies as you attempt to secure and extend contracts. By integrating tree trimming into your services, you would set yourself apart from other solid waste service providers,” the letter said.

“Marketing my landscaping company to municipalities has given me extensive insight into the political practices and policies of several Southern California municipalities,” the letter said.

After Waste Management and Duncan failed to reach an agreement, the city went ahead with its plan to solicit proposals from rival firms.

The Rand Development

At the beginning of this year, developer Richard Rand and his partner, architect John Killen, were trying to negotiate exclusive rights to develop a prime piece of land in Carson with financial help from the city.

Rand said they met with the Carson mayor in early January at the offices of Los Angeles City Councilwoman Jan Perry, where Sweeney, a part-time mayor, works full time as chief of staff. At the meeting, the mayor told them to hire a lobbyist, Rand said. “We asked him, ‘Who?’ He said, ‘Well, let me make a call for you.’ Right in front of us, he picked up the phone and called Pryce,” Rand said. Killen confirmed the account.

Rand said he set up a meeting with Pryce, whose office is in downtown Los Angeles. Pryce told him he was a close friend of Sweeney.

Records show that Pryce has also recently represented Sweeney in litigation involving a default on a loan Sweeney guaranteed for the purchase of a building by a fraternal organization of which he was a member. Sweeney’s wages were garnished in 1999, and last June Sweeney agreed to pay $105,000 to the lender.

Besides being friends with Sweeney, Pryce also told Rand and Killen that he was close to Carson council member Raunda Frank and could deliver Frank’s vote, Rand said. Pryce picked up the phone, called Frank, and said, “Raunda, can you meet with us?” Rand recalled.

The next meeting took place in Pryce’s law office, where Rand and Killen said they briefed the council member on their project. After Frank left, Rand said, Pryce made his proposal: He asked for $100,000 as a retainer and a 10% interest in the proposed $300-million development, which was to feature a Wal-Mart, a Sam’s Club and smaller stores. Killen said he asked Pryce to put it in writing.

Pryce did, in a Jan. 14 letter viewed by The Times, where he also asked for 6% of the approximately $20 million Carson was planning to pledge to the developers.

“As you may recall from our conversation, I believe it essential that you employ our law firm to assist you in being selected,” the letter said.

Rand said he then went back to Sweeney on Jan. 29 to tell him he was uncomfortable with Pryce’s proposal, but asked if there was anything else the mayor could suggest.

Sweeney reiterated that Rand needed a lobbyist, Rand said. “I walked out of there feeling I’d lost the project,” Rand said.

He did.

On March 20, Sweeney, Frank and a third member of the five-member Carson City Council, Manuel Ontal, voted it down.

Pilar Perry, a spokeswoman for the winning developer, Watson Land Co., said her firm did not hire Pryce and was not asked to.

Frank did not return repeated calls this week.

The BFI Contract

After Waste Management could not reach agreement with the city, Carson solicited bids for the city’s garbage collection contracts.

Browning Ferris Industries, another giant waste hauler, hired Pryce.

After the city received Waste Management’s secret bid, Pryce faxed a copy of it to a BFI executive, the executive later told the City Council. “Enclosed are the various rate pricings Waste Management included in their bid proposal to the city of Carson,” said the fax on the letterhead of Pryce’s law firm. “BFI needs to at least be willing to commit to matching these rates . . .”

At the time, Pryce was also serving as an attorney for the city in an unrelated matter. Records show he had a contract with the city’s principal attorney to represent Carson in a lawsuit. He was fired from that job after the leak was disclosed, a council member said.

The fax, first reported by the Daily Breeze in Torrance, had been sent in an apparent clerical mistake to the city maintenance yard.

City workers notified the City Council.

The leak and the subsequent negotiations were the subject of heated public discussion at City Council meetings.

At a council meeting in February, Waste Management was awarded the contract for residential pickups.

At the same meeting, BFI was asked by a council member to lower its bid for the more lucrative commercial carting contract. BFI agreed and was given the contract by a 3 to 2 vote, with Sweeney, Ontal and Frank voting for BFI and the two other council members objecting that the process was tainted.

On Tuesday, FBI and IRS agents served sealed search warrants on the residences of Sweeney and Frank, as well as the Gardena office of BFI.

The mayor’s lawyer, John Sweeney, said: “Obviously, we’re not going to have him make a comment at this time. That’s why he hired me,” adding that he did not yet know all the facts.

“There has been no indictment,” he said. “The inference of the FBI and the IRS serving a search warrant on his house is that they are very serious.”

Councilman Switches, Then Resigns

At a special meeting Wednesday night, the Carson City Council rescinded the BFI contract by a 3-2 vote. Sweeney and Frank dissented, while Ontal switched his vote to side with the two council members who had publicly objected when the contract was first awarded.

After the vote, Ontal asked to make a statement. He said he felt he had let residents down and that Carson deserves a decision-making process that is “honest and fair.”

He resigned his seat, saying he hoped the move “can be another step in the cleansing process this city so badly needs.”

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Times staff writers Jean Merl and Jessica Garrison contributed to this report.