Ron Kaye: Money, power, public policy

It was like stumbling into a convention of the Society of Influence Peddlers, with old friends and enemies schmoozing before the start of festivities.

There were Hall of Fame lobbyists like Richard Alatorre and Mike Roos, and future Hall-of-Famers like Lucinda “Cindy” Starrett of Latham & Watkins, and Tim McOsker of Mayer Brown, along with dozens — at least three dozen — other operatives in the $200 to $500-per-hour class of lawyers, lobbyists, public relations experts, media manipulators and assorted other consultants, all backed up by a host of corporate executives, union workers and grateful non-profit supporters.

The event was a showdown meeting Thursday of the Executive Management Committee of the L.A. County Metropolitan Transportation Authority over who gets the five-year contract to sell advertising on buses and trains — CBS Outdoor, a division of the giant entertainment company, which has offered a $110-million guarantee, or Titan Outdoor, the titan of transit advertising, which has offered $117 million.

For most people in the room, it was a question of who gets the big bucks. For me, it was a window into how power and money work at a time when those who have played this game for a long time now pine for the days when there was honor among thieves and at least a few leaders were tough enough to make sure that even the peasants like you and me got more than a crumb from the table of power.

What three months ago had appeared to be a routine renewal of a contract held by CBS Outdoor for nearly 30 years has turned into a kill-or-be-killed war, a war so intense that CBS Corp. President and CEO Les Moonves, a $69-million-a-year entertainment industry giant, has gotten personally involved in the public fight.

He accused Titan of a “spotty” financial record, having lost a New York transit contract and renegotiated others in San Francisco down from the guaranteed payment number because its ad revenue fell short.

“To choose that company over ours just seems preposterous; we have financial strength behind our company,” he told the L.A. Times recently, adding menacingly that it would be “wrong” to award the contract to Titan unless “they want to urge a company like us to leave and to do production out of state.”

In their analysis supporting CBS, MTA executives warned that the “greatest risk factor” in the contract is the “possibility of the selected vendor becoming unable to pay Metro its guaranteed revenue.”

Titan’s view is that Moonves is likely to sell off CBS Outdoor — something the proposed contract allows it to do without penalty — and that the company has underperformed over the years, in part by setting rates too low, which is why Titan claims to have won nearly 20 transit ad contracts from CBS.

With everyone in place and ready to duke it out before the MTA Executive Committee, the meeting finally got under way more than half an hour late.

Los Angeles County Supervisor Don Knabe started things off by saying, “I understand there is a full-employment act in the audience out there. My recommendation is I have an issue that needs to be clarified by county counsel and the inspector general by letter. I understand there’s some other issues up here.... I would recommend we move the item … to the full board, so we don’t do it twice, without recommendation.”

Supervisor Mike Antonovich, the chairman, responded:

“We have a motion by director Knabe, seconded by [Vice Chair Diane] Dubois, to continue this to the full board because members need a letter from the county counsel relative to conflict or no conflict that members of this body have relative to this issue. There have been some verbal suggestions, but it ought to be in writing because of the seriousness of the charges that could be levied if the verbal was inaccurate. So is there any objection to that recommendation? If not, so ordered.”

Like parishioners asked to rise in prayer by their minister, members of the Society of Influence Peddlers rose from their seats as one and headed for the exits.

It was over in one minute, 52 seconds without the specifics of possible conflicts of interest being detailed, although Knabe’s son, Matt, is a principal with the lobbying firm Englander Knabe, which is part of Titan’s team. That is probably not a conflict, but under the tough rules imposed by the Legislature on the MTA after the scandals back in the 1990s involving subway construction contracts, a lot of things could be.

The battle now will move behind closed doors where the Society of Influence Peddlers can utilize the “access” to politicians that they have cultivated over the years to try to line up a majority of the 13 MTA board members who will take up the issue as soon as next Thursday.

Basically, the public fight comes down to the promise of $7 million more over five years versus the confidence the contractor will actually make good on the terms of the deal.

Behind the scenes, it will matter more how the complex connections between the politicians and members of the Society of Influence Peddlers block out than consideration of what is in the best interests of the public.

Think about that when MTA goes out to bid on the $1 billion-a-mile construction costs of the subway-almost-to-the-sea or the multi-billion-dollar cost of the 4.5-mile tunnel extending the Long Beach (710) Freeway to Pasadena.

All too often, money and power prevail, not public policy.

RON KAYE can be reached at Share your thoughts and stories with him.

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