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 GouldMinutes after celebrating their honesty, Orange County Great Park board members ignored their own procurement rules and okayed a contract that will pay $441 an hour to a law firm with ties to the park's CEO.
And far from apologizing, the board appeared to be unashamed at their June 9 meeting. Irvine Mayor Beth Krom, Councilman Larry Agran and businessman Michael Pinto—the most vocal members of the the board majority—smiled, winked, even snorted as they overrode opposition to similar no-bid deals and proposals arranged under dubious circumstances. Minutes before, the majority had lauded its commitment to honest public service with long-winded, self-congratulatory speeches. Agran told outraged citizens in attendance—including one who dared moan in frustration—to shut up. Don't interrupt the board's work, he lectured.
Questions from dissenting board members weren't welcomed either. Agran—chairman of the board and a wily politician since the mid-1970s—rolled his eyes and looked at the ceiling when Christina Shea said she was troubled that the board, which is less than two years old, would so quickly violate the concept of "a valid competitive bidding" process.
"I believe we need to have more checks and balances," said Shea. "There's a lot more going on than meets the eye. It makes me very nervous."
Shea has reason for concern. Consider, for example, the board's decision to award the legal services contract surely worth more than a million dollars annually to Robert Thornton of Nossaman, Guthner, Knox, Elliott, LLP. Great Park CEO Wally Kreutzen, a veteran bureaucrat, violated the first rule of public bidding when he essentially kept the open contract a secret. Kreutzen didn't place any public ads. He personally chose five local firms to inform, waited just nine days, and then single-handedly picked Thornton.
Is it alarming that Kreutzen and Thornton are close pals dating back more than a decade when they both began working for the county's Transportation Corridor Agencies (TCA)? Is it alarming that there was no negotiation over Thornton's fee demand of $441 per hour? Is it alarming that Kreutzen didn't offer the park board at least two choices for the contract? Is it alarming that Thornton won a deal that prevents the public agency from seeking better terms from outside bidders for as long as five years and, regardless of Thornton's performance, guarantees him annual fee increases?
"The fix was in," said one Orange County lawyer familiar with the deal. "Everybody knew Wally was going to pick Thornton's firm. Nobody else had a real chance."
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Sneaky moves by Kreutzen aren't new. He's a secrecy nut who enjoyed keeping the public in the dark while he worked as CEO at the embattled TCA. Even among pro-business Republican TCA board members, the natty Kreutzen was considered nothing more than a tool of major Wall Street investment houses, which are making tens of millions of dollars a year on the bonds that built Orange County's toll road system. Earlier this year, the Weeklydisclosed Kreutzen charged taxpayers more than $110,000 in expenses for things such as luxury hotel rooms and dinners at posh restaurants. The dour Thornton, as the TCA's counsel, routinely protected Kreutzen's moves by fighting the agency's compliance with California's Public Records Act, a law designed to force agencies to share information with the public. There was much to hide: when Kreutzen left the TCA for the Great Park in January, the agency's San Joaquin Hills toll road—which Kreutzen had touted before Congress as the international model for all future toll roads in the mid-1990s—was on the verge of a multibillion-dollar bankruptcy.
Kreutzen and Thornton now have successfully transferred their fraternity to the Great Park thanks to Agran. But board member Steven Choi cautioned that he didn't want to see the agency turned into an ethical cesspool. Choi pointed to previous media coverage exposing Agran's attempted contracting shenanigans at the park (see "Agran's Tree People," Sept. 3, 2004). He said thwarting truly competitive bidding is bad for businesses, the board, the public, the park. "It's creating a wrong image," said Choi. "I'm very frustrated."
The board majority reacted swiftly. A seething Krom, who literally turned red in the face as she yelled into a microphone, told Choi that his questions were "compromising everything we have worked so hard to create" and suggested he find something positive to say.
"I resent the commentary because the inference is that we are not about doing the public's business, that we're not about following the rules, that we are not about following through on commitments," Krom screeched. "I truly get frustrated and disappointed as I listen to Choi talk about what people think when they read the newspapers."
Krom's position—that no policies had been violated—wasn't even supported by the rest of the majority. Agran said the board was merely delaying competitive bids on certain contracts for a year and that allowing bids "at this juncture" would be "a poor policy choice." Board member Walkie Ray, a real estate developer, supported handing out no-bid contracts but was honest enough to admit that "it is dismaying that, uh, we arguably are deviating from [our competitive bidding] policies which we not so long ago carefully crafted." Meek board member Sukhee Kang said he too understood concerns, but apparently not enough to challenge Krom and Agran, his two political benefactors.
But the most revealing comments came from Pinto. Despite evidence to the contrary, he argued that the board had "assiduously" followed honest competitive bidding procedures on the legal contract. "I want to reassure the public we haven't thrown out our procurement policies," Pinto said. "We're following them. We take very seriously the importance of our policy, its value, the need for competitive bidding."
Then Pinto—perhaps accidentally due to his anger at Shea and Choi—confirmed suspicions that Thornton's contract had been based more on a bureaucrat's whim than an independent review process.
"It is absolutely reasonable for [Kreutzen] to say, 'There are a few firms and individuals that I would like to continue working with [from his days at the TCA],'" said Pinto. "We're not breaking policy [by giving Kreutzen latitude to dole out contracts], we're supporting him . . . So please don't think that all of a sudden we're just willy-nilly throwing things out the window and doing what we feel from one month to the next. "
Choi had been berated by Pinto and Krom for advocating competitive bids over backroom deals. He leaned to his microphone and shook his head. "This is unbelievable," he said.