L.A. Port May Rehire Former Chief

Less than a month after Larry Keller resigned amid criticism as executive director of the Port of Los Angeles, officials were finishing work Tuesday on a consulting contract that would pay him as much as $540,000 over three years.

The contract, which port commissioners plan to vote on today, calls for Keller to solicit business for the port, develop marketing strategies, work with shippers to carry out environmental policies and maintain an office in Northern California or the Pacific Northwest, according to a draft.

A port spokesman declined Tuesday to make public the contract or the staff report, saying the final details were still being negotiated. Some of the port’s critics, who welcomed Keller’s departure, harshly criticized the plan to hire him as a consultant, saying that the contract is in exchange for Keller’s Sept. 17 resignation or for keeping quiet about port matters under investigation by local and federal prosecutors.

Harbor Commission President Nicholas Tonsich adamantly denied those charges. He said that he personally approached Keller about a consulting contract sometime after Keller left the port, although he could not say when. “It was after he resigned, but it was before the agenda was published on Friday,” Tonsich said.

Mayor James K. Hahn said Tuesday that he believed Keller could contribute to the port’s economic success.

“Larry Keller has a lot of talent that we could use as a marketing consultant for the Port of Los Angeles,” Hahn said. “I saw that firsthand when we traveled with him in Asia two years ago. He has a lot of valuable contacts. He has been a great salesman for the port. That’s why we are the No. 1 port in the country.”

The draft contract calls for a $180,000 salary for Keller for one year, with two one-year renewal options.

Keller’s departure from his $278,000-a-year job last month sparked widespread speculation that he was forced out by city officials and community leaders.

Tensions had grown as harbor commissioners met privately to evaluate his performance, and Hahn two months ago rejected a major port plan to curb air pollution as inadequate, sending it back to Keller and his staff to be redone.

Clean-air and community activists blamed Keller for contributing to what they described as the port’s arrogance toward area residents worried that their health was being endangered by air pollution from ships, trains and trucks.

Those same residents now are questioning why the port would rehire a former executive who had fostered so much dissent.

“This is an agreement that it’s clear was orchestrated ahead of time,” said San Pedro community activist Janet Gunter. “This is a man who’s been getting paid a handsome, hefty salary. Why would he walk away from that? He’s got to have had a reason, and they gave him one.

“It certainly gives appearances of hush money or of money to appease someone who has the ability to do harm if provoked.”

Activist Noel Park called the contract a “quid pro quo” in return for Keller’s resignation, and he criticized the port for not releasing more information about the consulting arrangement before today’s meeting.

“The public has no knowledge of this,” he said. “It’s a horrible way to do business.”

Keller could not be reached Tuesday for comment.

Keller and Tonsich were among the port officials subpoenaed last spring to appear before a federal grand jury, and a federal and local investigation of port contracts is continuing.

Also, Los Angeles City Controller Laura Chick has questioned port leases.

In a written statement Tuesday, Chick took note of the last-minute negotiations. “Time and again, I have questioned the need for the city to use highly paid, outside consultants. It is disconcerting that at the eleventh hour, this deal is still being formed.”

Chick, who must authorize consultant payments, promised to ensure that the port is getting its money’s worth. “I will review the invoices to determine if the products and deliverables are consistent with the contract,” she said.

Although the port would not make the contract terms public Tuesday, a draft “scope-of-work” reviewed by port officials last week says that consulting duties would include communicating “environmental issues and related concerns to steamship line management, as requested.”

Other duties would include helping to arrange news conferences and notifying the new executive director “regarding proposed visits to the United States of dignitaries and other persons from the Contract Area who may be interested in the port.”

Keller would also help “interview, contact and solicit importers, exporters, freight forwarders, manufacturers, processors, steamship lines, shippers and purchasers in the Contract Area.”

In the margin is a scrawled note: “Contract Area = Northern Calif.,” but a port spokesman said the contract area is the Pacific Northwest, Mexico and Asia. The draft also states, “Consultant shall maintain an office in Northern California or the Northwest United States.”

A port spokesman said that the document was an old draft but declined to provide the current one. Tonsich said Keller would work out of the Bay Area part of the time and would be responsible for travel expenses between there and Los Angeles. The port would reimburse Keller for traveling outside the U.S. at the port’s request, he said. Keller has family in the Bay Area, port officials said.

The port spokesman, Arley Baker, could recall only one other case of a former port chief receiving a lucrative consulting contract.

Ernest “Roy” Perry, who resigned as executive director in the early 1980s, received a $131,000 contract for working from November 1984 to December 1985, he said.

The proposed contract stipulates that Keller must cooperate with any investigation or audit involving the harbor, and a conflict-of-interest clause would prevent him from working for a competing port, Baker said.

City Councilwoman Janice Hahn, a longtime critic of Keller, said she assumes “this is something they might have worked out prior to his resignation.”

Although she said she had problems with his environmental policies, she added, “I’ve never questioned his marketing ability or his ability to interact in industry circles.”

Port Commissioner Camilla Kocol said late Tuesday afternoon that she had not seen a written contract and could not say how she would vote. “If we feel we haven’t had enough time, we’ll ask that it be tabled,” she said.

*

Times staff writer Patrick McGreevy contributed to this report.