By Peter Maguire
By Charles Lam
By Charles Lam
By Andrew Galvin
By R. Scott Moxley
By Gustavo Arellano
By R. Scott Moxley
By R. Scott Moxley
Photo by Jack GouldDear Supes:
It's happening again. Just like late 1994. Financial chaos has returned to Orange County government, and again, it's because you—the county supervisors—aren't supervising.
I'm talking about the taxi situation at John Wayne Airport. Since May 2000, Costa Mesa-based American Taxi has provided exclusive cab service at the airport. Since May 2000, American Taxi has had significant problems—couldn't pay fuel bills on time, had no experience running a cab company, couldn't secure even a single cab in the lucrative Los Angeles taxi franchise, and, finally, filed for Chapter 11 bankruptcy in April.
Through it all, American Taxi and its mercurial president, Rick Schorling, assured you the company was fine, that his monthly payments to the airport—the whole reason for having a designated taxi provider—would continue, that everything was under control. He has somehow managed to keep up with his airport payments, but with nothing else.
Now the bottom has fallen out of American Taxi. Schorling's creditors are closing in. He owes his own attorney $150,000. His drivers are wondering what each new day will bring. You know that wonderful, clean-burning natural gas that powers his hundred cabs? He has stopped paying for it.
But all that pales before the fact that Schorling can no longer pay the immense Ford Motor Credit for his cars. Ford Motor Credit's attorney wouldn't comment on the situation, but a recent bankruptcy court decision involving the company allows Ford to, in the words of one informed observer, "pick up the cabs any time."
Ford Motor Credit, you see, is in a real bind. They don't want to repossess Schorling's cabs. Would you want to try to sell more than 100 three-year-old Crown Victorias that have 100,000 on the odometer and run on natural gas? That's an immediate million-dollar hit to Ford.
Obviously, American Taxi doesn't want Ford to take the cars back either. To stave off complete destruction, sources say, American Taxi is working out a novel solution: simply sell the company—and its lucrative monopoly contract on John Wayne Airport runs—to Santa Ana-based A Taxi, which, as you recall, held the John Wayne Airport contract from 1996 to 2000.
This is a remarkable development, not least for the fact that Schorling and A Taxi's president, Hossein Nabati, have been at each other's throats since Schorling bolted A Taxi in the late 1990s.
But that's Orange County's taxi world. "These are completely insane people who live day to day," said one source. "They hate each other and conspire against each other one day, then go into business with each other the next."
Nabati wouldn't comment for this story, and Schorling said he had never heard of the merger, which is theoretically possible given the chaos that plagues his company. But sources intimately familiar with both companies said the plan was for Nabati to buy American Taxi for $500,000 down and $1.5 million in payments.
Think hard about this: in May 2000, you tossed A Taxi out of the John Wayne Airport terminal because it was (you said) an unstable company with lots of unpaid claims against it and bad insurance. But now that the situation with American Taxi seems worse, you want to turn back the clock on airport taxi service.
A few months ago, fearing Schorling would bail on John Wayne Airport because of his recently declared bankruptcy, you named a three-company consortium as a backup taxi service. That consortium is headed by Larry Slagle's Anaheim Yellow Cab. Slagle's company dates back to late 1945. For 30 years, he had an exclusive monopoly over the airport. For a number of those years, he simultaneously sat on the airport commission, the body that approves taxi monopolies—a gross conflict of interest. His face personified the old-boy network. Campaigning against Slagle's dollar surcharge per cab ride—pure profit skimmed right off the top of every fare—was one of the strategies Schorling used to wrest the contract out of Slagle's hands in 1996.
Now he's the best you have. What all this means for the airport contract is anyone's guess right now. Your airport staff certainly doesn't know—they would only say their "contingency plan" to bring in Slagle's consortium is still in effect.
You knew it would come to this. Financial instability is nothing new to Schorling. Nor are court judgments—he racked up plenty of those in the 1980s and early 1990s during his helicopter-huckster days throughout Central America, dealing with such regional notables as Panamanian strongman Manuel Noriega and contra rebel leader Eden Pastora. Much of the story of Schorling's bogus helicopter sales is a matter of public record, enshrined in thick court files still maintained in the dusty Los Angeles Superior Court archives.
It was only a matter of time before his past caught up with him.
Yet you—the supervisors—made no effort to prevent a rerun of all that. You never asked airport staff to do a proper background check on Schorling. You never demanded more bids when the contract was up in 2000. Instead, you left the airport on autopilot, letting staff run the contract just as previous boards let Nabati's A Taxi slide with bad insurance and Slagle's Yellow Cab get away with overcharging passengers.