By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
Photo by Jack GouldIt doesn't look like much now, the old El Toro Marine Corps Air Station. It's a military ghost town—two abandoned runways, dozens of empty buildings, neglected roads and, perhaps most significantly, about 10,000 trees. Residents who look at the Irvine property and envision the future Orange County Great Park surely see the palm, oak and eucalyptus trees in their dreams. But others—people with unsurpassed political influence at Irvine City Hall, where the park is being planned—see something else when they see those trees: cash.
Government records show that people with personal ties to Irvine Mayor Larry Agran have created business entities poised to grab some part of the million-dollar landscaping contracts at the proposed park.
At the center of the controversy are Ed Dornan, Agran's top political strategist, personal confidante and campaign fund-raiser; Raphael "Ray" Chaikin, a wealthy Sherman Oaks financier whose family and employees are Agran's most active campaign contributors; and Tom Larson, a professional arborist and Chaikin's business partner.
During the past two years, while Agran touted the Great Park as a shining example of good government, Dornan, Chaikin and Larson quietly created at least five landscaping entities. Those companies include the Great Park Forestry Trust, the Great Park Tree Farm, the Great Park Landscape Co., El Toro Landscape Holdings and Landscape Program Management.
Why such interest in Great Park trees? Trees, it turns out, are like gold. Thousands of new trees will be needed on the 4,700-acre project; thousands of trees worth as much as $20 million already on the base will require relocation before construction; other trees will be deemed surplus and removed, perhaps for lucrative resale, after the U.S. Navy auctions the parcels to real-estate developers in the coming months.
One thing is certain: somebody is going to get very rich from the Great Park tree business.
There is nothing illegal about the mayor's friends establishing corporations that can benefit from government expenditures. But the flurry of behind-the-scenes activities regarding future landscaping at the planned massive development is remarkable.
"It doesn't pass the smell test," said Mike Ward, Agran's longtime opponent on the City Council.
The tree controversy marks the second time Dornan has found himself at the center of a City Hall scandal in less than a month. On Aug. 4, the Weekly reported that city records show Dornan, the man with greatest access to Agran, lobbied city officials on behalf of ENCO, a utility company seeking a monopoly contract potentially worth hundreds of millions of dollars.
ENCO's biggest advocate inside City Hall just happens to be Agran. But Agran never publicly mentioned Dornan's connection to the utility proposal as he advanced the deal for more than 18 months. In an Aug. 8 Los Angeles Times interview, Agran—who, until recently, enjoyed a three-vote majority on the council—said he was stunned that anyone would challenge his ethics, and then pretended Dornan wasn't his personal confidante, strategist and fund-raiser.
"What's corrupt about a private individual having a business relationship with a private firm that may or may not do business with the city?" the mayor asked.
Agran's spin prompted incredulity even among old allies.
"I think the people of Irvine should know that Ed Dornan hasn't just been lobbying for a private energy company. The mayor's right-hand man is also now involved in the tree business at the Great Park," said Councilman Chris Mears, who announced earlier this month that "a host of ethical concerns" prevented him from rejoining Agran's candidate slate in the November election. "What's even more fascinating is that Ed is a retired English teacher at a community college. He knows nothing about energy or trees. It makes you stop and wonder what's going on here. Is the public's interest truly being served?"
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You can trace the tree controversy back to the inaugural meeting of the Orange County Great Park Board on Dec. 5, 2003. For those who opposed an international airport at El Toro, creation of the park board represented a symbolic victory. The board's nine directors (four representatives of the public and all five Irvine City Council members) quickly elected Mears chairman.At that first session, members of the Great Park Conservancy said they wanted to play a big role in construction of the park. Michael D. Ray, chairman of the Conservancy, couldn't contain his excitement. "All of us living in Orange County have the opportunity to create a unique legacy for future generations," said Ray.
A private group, the Conservancy is managed in large part by longtime Agran ally Carol Simon, Agran's daughter-in-law Leanne Morgan Agran and Agran strategist Dornan. The group wants to help the park board distribute government subsidies, locate contractors, raise private funds and generally offer park-construction advice.
At the park board's January 2004 meeting, the Conservancy asked the park board for $56,000 to inventory trees at the old base. Agran pressed for speedy approval.
But Mears had heard that Dornan had a financial interest in a company seeking Great Park landscaping business. Months later, Mears would learn that Dornan was a director of the Great Park Forestry Trust Inc.
Instead of rubber-stamping the tree-inventory deal, Mears angered Conservancy representatives and Agran when he suggested the board send the contract to the park board's finance committee for "further pulling apart." A miffed Agran said he hoped that meeting might provide "a more relaxed environment."
The reason for Agran's angst was soon evident to Mears and Irvine city officials: the Conservancy may have attempted to pad the publicly funded tree-inventory deal by $20,000.
An informal city staff investigation in February learned that someone at the Conservancy took the tree-inventory bid letter from subcontractor Tom Larson and erased his typed fee of $36,000. Larson is a professional arborist and a business partner of loyal Agran contributor Ray Chaikin. By the time the Conservancy submitted Larson's bid to the park board, it showed a new handwritten amount: $56,000. The Weekly has obtained copies of the conflicting documents.
It is against California law to submit a "fraudulent claim, bill, account, voucher or writing," and city officials say they were worried. On March 25, city manager Allison Hart asked the Conservancy's Simon to explain the discrepancy.
"In an earlier phone conversation with you," Hart wrote, "you indicated to me that the Conservancy proposal included funds for work directly performed by the Conservancy in conjunction with the preparation of the tree inventory bid. Since Larson's proposal didn't reference any funding for the Conservancy, could you please clarify the difference."
A week later, April 1, Simon explained that the Conservancy wanted the money for administrative costs in assisting Larson with future tree work. To the amusement of some of the park board, the Conservancy later claimed it deserved the $20,000 to help "estimate tree-removal costs."
That same day, the park board staff decided to ignore the Conservancy bid. Instead the tree-inventory contract went to Arborpro. That company's report is due later this year.
The staff's decision did nothing to extinguish the firestorm that erupted behind the scenes. "I am disheartened and honestly offended that this organization [the Conservancy] would consider changing an RFP [request for proposal] to show an increase of $20,000 in their tree inventory proposal to supposedly pad their management budget," Councilwoman Christina Shea wrote to city staffers on April 14. "Then, when questioned, creating an excuse, that makes no sense. . . . This action, if true, violates the public trust."
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In the eternal flux of things, $20,000 isn't much. But drawn by Dornan's role in the Conservancy controversy, Agran's critics began looking more closely at the park board's handling of trees and landscaping at the Great Park. One, anti-airport activist Len Kranser, discovered that Dornan had introduced himself as director of Great Park Forestry Trust Inc. at Partners in Stewardship, a November 2003 conference in Los Angeles. Also present at the conference were Tom Larson and his associate Carol Schaffer, identified as principals in the Great Park Landscape Co. That company is not registered with the California secretary of state, but the Great Park Tree Farm is. State documents list Larson and Chaikin as the Great Park Tree Farm's directors. Two weeks after Mears put the brakes on the Conservancy deal, Chaikin created two more California companies in one day: El Toro Landscape Holdings and Landscape Program Management.
Mears and Ward say they're considering a special meeting of the Great Park board to investigate Agran's ties to the new companies. They're likely to get broad community support.
"We want everything done regarding the Great Park to be squeaky-clean," said Kranser. "Mr. Dornan's public problems concern us. . . . Unfortunately, none of this is likely to build confidence in how the park project is being handled."