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Contracts, Position Flow to Hahn Ally

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Times Staff Writers

San Pedro’s historic Warner Grand Theatre was buzzing last month as shipping executives and businessmen mixed with politicians, including Mayor James K. Hahn and his sister, Councilwoman Janice Hahn.

The occasion was a fundraising gala for the Art Deco movie palace. But top billing that night went to Nicholas G. Tonsich. The 43-year-old president of the Los Angeles Board of Harbor Commissioners was being honored as Man of the Year.

The tribute capped the remarkable rise of the San Pedro native, who started his career as a little-known personal injury lawyer and now oversees the nation’s largest seaport, which handles more than $120 billion worth of cargo a year.

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Tonsich’s rise owes much to his own ambition.

It also illustrates how connections to Hahn, including generous support for his campaigns, have helped fuel a career. Today, Hahn is campaigning for reelection amid criticism that his administration has given favorable treatment to other donors.

A review of hundreds of public records and interviews with dozens of current and former port officials, lawyers, businessmen and Tonsich associates shows:

* Tonsich’s law firm has earned $1.254 million from no-bid contracts from the Alameda Corridor Transportation Authority, a public agency whose legal contracting work was overseen by a Hahn appointee. After The Times inquired about why the contracts were not competitively bid, the agency launched an internal investigation.

* Tonsich’s firm was one of 25 approved to handle police misconduct cases by the city attorney’s office when Hahn headed that office. All of them had substantial experience defending public agencies except Tonsich’s firm, which cited just one case on its application.

* After Tonsich was appointed to the Harbor Commission by Hahn, a lobbyist who is also a Hahn fundraiser paid Tonsich’s firm at least $10,000 in 2003, according to city documents. The same year, the lobbyist reported lobbying the Harbor Commission. The lobbyist and Tonsich say they can’t recall what work Tonsich did.

* Last year, Tonsich set up a company to sell emissions-control technology for cargo ships, putting himself in position to profit from a market he helped create with his decisions about air quality at the port.

Since 1999 -- when Tonsich began giving to Hahn campaigns -- Tonsich and his family have donated nearly $12,000 to the mayor and his sister. Tonsich’s legal partners and their families, the firm’s clients and a fundraising event Tonsich hosted in 2003 brought the Hahns at least $30,000 more.

For more than a year, local and federal prosecutors have been investigating alleged links between campaign fundraising and official city business under the Hahn administration. Hahn has repeatedly said he knows of no wrongdoing.

To date, there have been no public indications Tonsich is being investigated.

The mayor said last week that his Harbor Commission president has never received special treatment. Hahn, who would answer The Times’ questions only in writing, praised Tonsich for helping to improve the port’s environmental record and for efforts “to change the port’s cultural attitude to one that cares about its impacts on its neighbors.”

The Harbor Commission president has also won praise from environmentalists for presiding over the port’s recent efforts to reduce pollution.

Tonsich said Monday that he was proud of his service, citing the port’s high bond rating and its spending on security and environmental mitigation.

He said neither Hahn nor his administration had ever helped him get business.

Cites ‘Accountability’

Tonsich, a reserved man who favors dark suits and typically runs commission meetings with businesslike efficiency, says he is driven by a desire to make the port area safe for families like his, who have lived for generations with air pollution produced by trucks, trains and ships.

“This is a very tight-knit community, so there is a certain amount of accountability in being in this position,” he said.

The son of a successful auto dealer, Tonsich was raised in the Croatian community that grew up last century around the fish canneries and shipyards of San Pedro harbor.

He attended Bishop Montgomery High School in nearby Torrance, USC and Whittier Law School, graduating in 1986.

Tonsich returned home to build his legal career and has lived near San Pedro Bay ever since, working at several law firms before he started his own practice seven years ago.

Today, Tonsich owns a San Pedro condominium and a home in the gated city of Rolling Hills on the Palos Verdes peninsula.

Earlier Lawsuits

Earlier in his career, Tonsich not only practiced law; he found himself in court as both a plaintiff and a defendant.

Three years after graduating from law school, Tonsich sued the Los Angeles Unified School District after he collided with a basketball pole and broke his ankle during a pickup game at an elementary school. He asked for more than $1 million. The case, which Tonsich said he dropped, cost the school district $8,700 in attorneys’ fees, a district spokesman said.

In 1989, Tonsich and his mother sued a Rolling Hills couple who decided to sell their house to other buyers. Tonsich said he dropped the case. Court records indicate a judge dismissed it after the couple asked that it be thrown out.

Tonsich went to court again in 1996 after the county registrar determined that he hadn’t gathered enough valid signatures to qualify to run for the state Senate. A succession of courts rejected his appeals.

In 1997 and again in 1998, Tonsich and the firm that employed him -- Jaffe Trutanich Scatena & Blum -- were sued for legal malpractice.

Former clients alleged in both cases that Tonsich and the firm failed to file critical documents on time. In legal filings in both malpractice lawsuits, Tonsich said he did nothing wrong. Jaffe Trutanich settled both suits for undisclosed terms.

Tonsich said he has not been sued since he started his own firm in 1998.

In the late 1990s, Tonsich was making important political connections with the Hahns through Jaffe Trutanich, a San Pedro law firm whose attorneys helped raise money for local politicians, including the Hahns.

Both Hahns were promising politicians and San Pedro residents. In 1997, James Hahn won his fourth term as city attorney and Janice Hahn won a seat on a commission to rewrite the city’s charter.

The next year, James Hahn hired Joseph Burton, a former colleague of Tonsich at Jaffe Trutanich and also a friend of Janice Hahn.

Hahn assigned Burton to provide legal counsel to the massive Alameda Corridor project, a $2.4-billion effort to build a rail line to move freight from the ports of Los Angeles and Long Beach.

Tonsich was soon to profit from the prodigious legal work the Alameda Corridor Transportation Authority was generating.

In 1999, his firm, Glaser Tonsich & Brajevich, received its first contract, and by March 2005, it had been paid $1.254 million for work on three cases, according to the corridor authority.

Los Angeles contracting rules, which govern the Alameda Corridor, require that contracts be competitively bid in most cases to ensure that taxpayers receive the best value.

Alameda Corridor records indicate that the authority followed a lengthy bid process to review about 50 law firms before selecting five in 1997 to receive legal contracts.

But when Tonsich’s firm received its first contract, a two-year deal for “specialized legal services” worth $200,000, the process was different.

Officials at the authority say they can find no documentation indicating how they had selected Glaser Tonsich & Brajevich, despite repeatedly searching their records.

And officials said that their records do not indicate that Tonsich’s firm was ever required to bid for its contracts.

Tonsich, too, said he never went through a bidding process.

“This is a very serious matter, and we’re treating this very seriously,” Alameda Corridor chief executive John Doherty said. He said inquiries from The Times prompted him to ask the authority’s internal auditor to investigate.

Burton, who oversaw the legal contracts that went to Tonsich’s firm, did not respond to repeated requests for comment.

Tonsich said he believed that he was hired because he had previously handled a case involving the authority or because Jaffe Trutanich, his former employer, had been selected through a competitive process to work for the authority.

“I’m not familiar with what their procedure is,” he said.

In 2000, a year after getting their first Alameda Corridor contract, Tonsich and his firm looked for business at the city attorney’s office, where Hahn’s chief deputy also had ties to Tonsich. Tim McOsker, who grew up in San Pedro, went to high school with Tonsich and was in his wedding party.

Hahn was looking for law firms to help the city handle the flood of lawsuits filed over police abuses in the Rampart Division.

At that time, Hahn was also gearing up to run for mayor.

Tonsich, who sat on Hahn’s campaign finance committee, was a big supporter. By then, Tonsich, his family, his clients, an office assistant, his law partners and their families had already given at least $10,000 to Hahn’s campaign.

In early 2000, Tonsich’s firm was one of 58 that applied to Hahn’s office, according to city records.

Hahn’s office selected 25, including Glaser Tonsich & Brajevich. All but Tonsich’s firm had substantial experience defending cities, school districts or other government agencies, according to the firms’ applications and interviews with attorneys. At least 16 cited on their applications experience with cases involving law enforcement officers.

Tonsich’s firm identified no experience with police-related cases. Asked to list its government tort and civil rights experience, the firm cited just one case, a workplace harassment case for the Alameda Corridor.

On a resume submitted with the application, Tonsich also stated that he had been a volunteer criminal prosecutor in the Long Beach city prosecutor’s office for five years.

But a spokesman for the Long Beach prosecutor’s office said the office could find no evidence that Tonsich had worked there. Tonsich said last week that he prosecuted “three or four” cases there in 1998.

Tonsich’s firm eventually was awarded contracts allowing it to bill up to $480,000 to handle 17 Rampart-related cases, according to city records. Nearly all the cases settled immediately, and the firm billed just $6,111, according to the city administrative officer.

Hahn, McOsker and Tonsich all said Tonsich’s firm had received no special treatment.

And Tonsich said he was proud that his firm had helped save the city money by working to get cases dismissed. “The proof is in the pudding,” Tonsich said.

Court records indicate that the city attorney’s office did the bulk of the work on the Rampart cases to which Tonsich was assigned. In the case Tonsich billed the most on, the police officer he represented almost lost because Tonsich failed to file a court document.

Tonsich acknowledged the error in court papers.

Powerful Appointees

The 2001 election was a boon for San Pedro. Not only was Hahn elected mayor, his sister won a seat on the City Council. McOsker became mayoral chief of staff.

Within a month of taking office, Hahn tapped Tonsich and two other residents of San Pedro for the five-member Board of Harbor Commissioners.

Though volunteers, harbor commissioners are among the most powerful citizen appointees in city government. They oversee a 7,500-acre port that handles millions of containers a year.

Commissioners travel around the globe. They negotiate leases with multinational shipping companies. And they award millions of dollars of contracts annually.

Like all city officials, commissioners must adhere to conflict-of-interest laws that require them to abstain from acting on issues in which they may have financial interests.

A review of Tonsich’s 3 1/2 -year voting record indicates that he repeatedly voted on and considered issues that involved potential conflicts of interest.

In 2003, as port critics raised questions about some of these votes, Tonsich began to excuse himself from votes and discussions more often -- at least 20 times in the last two years, according to Harbor Commission minutes.

But he did not alert the Ethics Commission, as the commissioner handbook instructs. If a commissioner repeatedly abstains on the same issue, the Ethics Commission can require him or her to make a choice -- resign or cut ties with the conflicting interest.

The Ethics Commission has reviewed such cases four times since 1998 but has never required a commissioner to cut ties with a conflicting interest or resign.

Many of Tonsich’s potential conflicts involved two of his major law clients: the Alameda Corridor and Advanced Cleanup Technologies Inc., a hazardous waste company.

Records show Tonsich voted at least six times between 2001 and 2003 on matters involving the Alameda Corridor, including an April 10, 2002, vote to transfer $3 million from the port to the corridor authority. Tonsich said he was unaware that may have been a conflict.

Later in 2003 and 2004, Tonsich excused himself three times on matters involving the authority.

In 2004, he also excused himself three times from matters involving Advanced Cleanup.

Tonsich said last week he was unaware that he should inform the Ethics Commission of his recusals. After inquiries from The Times, Tonsich and the mayor asked ethics officials to review parts of Tonsich’s voting record to determine whether he voted on issues when he should have recused himself.

Tonsich also reported that his law firm earned at least $10,000 in 2003 working for Clark Davis, a lobbyist and Hahn fundraiser. At the same time, Davis was representing at least two clients that were seeking deals at the port, according to city documents.

Davis specifically reported lobbying the Harbor Commission to help one of them, Parsons Transportation Group, win a master-planning contract. The company was awarded a $3.3-million master-planning deal at a December 2003 board meeting that Tonsich missed.

Records show Tonsich did vote in February 2003 to reauthorize a different contract with Parsons.

Davis said in a recent interview that he never lobbied Tonsich and must have mistakenly reported lobbying the port. He said he has never earned money from actions taken by the Harbor Commission under Tonsich.

Davis said he couldn’t recall why he had hired Tonsich two years ago. “He did some kind of legal work for me. I don’t remember what it was,” he said. “I’m totally blank.”

Tonsich said he, too, could not remember what he did for Davis in 2003, but he said he was sure it had nothing to do with the lobbyist’s port clients.

Sees No Conflict

In 2004, Tonsich branched out into business for himself to develop new technology to reduce pollution from cargo ships.

Tonsich said he saw no conflict between this venture and his work at the port.

But documents and interviews show that at the same time the Harbor Commission was helping create a market for pollution controls, Tonsich was working with a company to sell his own system.

Tonsich has played a leading role in pushing shipping companies to switch to onshore electricity rather than run their heavily polluting diesel engines when they are docked in Los Angeles.

He helped negotiate a 2003 legal settlement with China Shipping that requires the company to begin to use the electrical power system. And he has taken part in efforts to negotiate a lease with London-based P&O; Nedlloyd that requires the company to plug in its ships.

Some shipping companies have balked at the program because of the cost of retrofitting ships to use shore-generated electricity.

Tonsich said he recognized that there was a market for a cheaper way to reduce pollution from ship smokestacks.

“It just seemed to me there was a certain resistance on the part of shipping companies,” Tonsich explained, “because it requires taking ships out of service and retrofitting them at some cost.”

Tonsich said he came up with the idea for a system to funnel the exhaust from ships through filters to remove pollutants, including nitrogen oxides and particulate matter.

He has worked on that system with Advanced Cleanup Technologies, a hazardous waste company and his law client.

Last year, Advanced Cleanup tried unsuccessfully to get $2 million in public funds from the Port of Los Angeles to help develop the technology. City Atty. Rocky Delgadillo blocked the company from receiving port funds because Tonsich stood to benefit financially.

The company then went next door, to the Port of Long Beach, where it is seeking more than $7 million to develop the product.

Although the device is not on the market, Tonsich reported on his last financial disclosure form that it has earned him at least $100,000.

Tonsich said Monday that he made a mistake on his form and that the money was income from Advanced Cleanup for legal work.

But he said he hoped to make money in the future. And he defended his involvement in the technology, saying that he would have come up with the idea for the new system even if he hadn’t been a commissioner.

“I can’t help it if I came up with an idea.... God gave me the brain to develop this technology,” Tonsich said. “When you take a commission post, are you supposed to not have any more business?”

*

(BEGIN TEXT OF INFOBOX)

Nicholas Gerard Tonsich

Born: Oct. 29, 1961 in San Pedro

Education: USC, bachelor’s degree in finance, 1983; Whittier Law School, 1986

Family: wife, Angela, and one daughter

Career: attorney 1988 to present; formed Glaser Tonsich & Brajevich in 1998; Harbor Commission president 2001 to present

Timeline

1979: Graduates from Bishop Montgomery High School in Torrance, a year ahead of Tim McOsker, the future chief of staff for Mayor James K. Hahn

1983: Graduates from USC

1986: Graduates from Whittier Law School

1988: Passes the bar

1989: Starts work at Jaffe Trutanich Scatena & Blum, a politically connected San Pedro law firm

1996: Fails to gather enough signatures to qualify for a state Senate campaign

1997: Contributes $100 to Janice Hahn’s Charter Commission campaign

1998: Starts a law firm in San Pedro, Glaser Tonsich & Brajevich

1999: Contributes $1,000 to James Hahn’s mayoral campaign; his firm gets a two-year $200,000 no-bid contract from the Alameda Corridor Transportation Authority

2000: His firm wins approval to handle police misconduct cases by Los Angeles city attorney’s office, then run by Hahn

2001: Appointed by Hahn to the Board of Harbor Commissioners

2003: Earns at least $10,000 from lobbyist Clark Davis, who represents several clients with business at the port

2004: Starts a company to develop emissions-control technology for ships in port

2005: Named Man of the Year at a gala event to raise money for the Warner Grand Theatre

*

Graphics reporting by Noam N. Levey

Los Angeles Times

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