High-speed rail leaders receive consulting fees from firms with financial interests in project
Two prominent California High-Speed Rail Authority leaders who are already under scrutiny for holding potentially “incompatible” public offices have received tens of thousands of dollars in consulting fees from firms with financial interests in the $43-billion project.
Rail board chairman and Anaheim Mayor Curt Pringle, a public affairs consultant, has been an advisor to a major construction supplier that owns property along proposed bullet train routes, records and interviews show.
Other Pringle clients include a large corporate donor to the 2008 ballot campaign that secured high-speed rail funding and now hopes to win construction contracts. Pringle also represents the City of Industry, which has objected to a possible route through its freight train corridor.
Fellow board member Richard Katz sits on the Metrolink and Los Angeles County Metropolitan Transportation Authority boards. He too works as a public affairs consultant and for several years has advised Walt Disney Co.
The Disneyland Resort is an enthusiastic backer of the San Francisco-to-Anaheim bullet train project, which could serve millions of passengers at a proposed rail station just a short hop from the theme park. Disney also has interests in land along the rail right-of-way, specifically a ranch-style studio property close to the spot where the train would turn toward Palmdale as it exits the San Fernando Valley.
Pringle and Katz, both influential former state lawmakers, say they have not mixed their private business interests with their high-speed rail duties.
Pringle and his clients said they had not discussed the rail project and that any work performed by Curt Pringle & Associates was unrelated to his role with the authority.
Katz said he has avoided participating in high-speed rail discussions or decisions that could affect Disney’s 800-plus acre Golden Oak Ranch in Newhall. “I don’t want to know what the [Disney] negotiations are about [and I] don’t want to know the status,” he said.
Katz declined to discuss his work for Disney, which began before he joined the rail board last year. Officials at the entertainment giant’s Burbank headquarters did not respond to interview requests.
Both Katz and Pringle have reported receiving more than $10,000 — under state law, the threshold for disclosing sources of outside income — from the special-interest clients for each of the last two years.
However, potential conflicts involving some of those clients have not always been recognized or publicly disclosed during meetings by the two board members, records and interviews show.
A Times review found that because of an oversight, a state law enacted in 2002 to make potential conflicts of interest more apparent to the public did not cover the fledgling High-Speed Rail Authority. Members of the Public Utilities Commission, the Coastal Commission, the state Energy Commission and other state and local government panels are required to announce the nature of a disqualifying conflict before deliberations can begin. Then they must leave the room during debate and voting.
The rail board “really wasn’t on the radar screen,” said an aide to the law’s author, Sen. Tom Harman (R-Huntington Beach).
Other ethics questions have been raised about the authority.
On Monday, The Times reported that several board members took overseas trips paid for by foreign governments promoting their contractors for project business. The agency was unable to document the cost, sources or details of the tours as generally required by state ethics regulations. The agency has since acknowledged lapses in complying with documentation and disclosure requirements for foreign travel gifts.
The state attorney general’s office is reviewing whether Pringle and Katz hold “incompatible” public offices, an arrangement banned by law so officials don’t represent different agencies with clashing interests. For example, if the rail agency and Anaheim disagreed on station development issues, Pringle’s loyalties could be divided. Pringle and Katz say their local government experience gives them insights that are critical to the massive state rail proposal.
Pringle client Vulcan Materials is one of the nation’s largest suppliers of sand, gravel and other aggregate used in construction. Vulcan has hopes of winning bullet train supply business, and protecting the commercial value of properties it holds on possible routes in Los Angeles and San Diego, according to authority records and company representatives.
In July, Pringle joined a vote approving a key report refining potential routes on the Los Angeles-to-Palmdale segment of the line, where Vulcan interests include “potentially significant” disruption of a Canyon Country mining operation and development plans for that land, authority records show.
In an interview, Pringle said he wasn’t aware the firm had lodged concerns about the project. He said he would seek legal advice on Vulcan’s interest. “You’ve brought some things to my attention,” he told a reporter. “I need to ask those questions, and I will.”
Another Pringle client, Sacramento-based heavy-construction giant Teichert Inc., contributed $25,000 to the 2008 campaign that won the rail project nearly $10 billion in state funding. Now, Teichert is looking to win high-speed rail work and possibly supply construction materials, said Bert Somers, the firm’s estimating manager. “I’ll be bidding the work,” he said. Pringle said he sees no conflict in Teichert’s prospective interest in the project. And his firm consults on unrelated property evaluation issues, he said.
The City of Industry, which City Hall records show paid Pringle’s firm $5,000 a month, has objected to a possible bullet train line paralleling the Pomona Freeway. That could interfere with freight trains serving manufacturers and warehouse distributors in the San Gabriel Valley city, officials say. Pringle has focused on other city issues, notably extending the life of its redevelopment agency, said City Manager Kevin Radecki. Added Pringle: “I don’t know about their feelings on high-speed rail.”
Rail board meeting records show that Katz abstained from the July vote on the Los Angeles-to-Palmdale segment designed to pass by the Disney ranch property. But Katz didn’t indicate at the public session why he recused himself. In a recent interview, Katz said he’d made his potential conflict clear in earlier discussions with authority officials and didn’t think more disclosure was needed.
Katz has been a key player in talks with various agencies about sharing the existing tracks between Los Angeles and Anaheim. Some see the discussions as crucial to controlling bullet train construction costs and minimizing battles over seizing properties to widen a rail corridor through the region’s urban core.
At the July meeting, a Disneyland official urged the board to move ahead with the Los Angeles-to-Anaheim segment, saying it was of high interest to the resort. Katz said his work on the section doesn’t pose a conflict because Disney’s economic interests there are more general, like any other large company in the region. And Anaheim was chosen as a major terminus by voters, he added.
“I’ve tried to be very conscientious about my job and my public life, keeping them separate,” he said.