The Lunch From Hill

Photo by Jeanne RiceHours after a "mysteriously strange" business lunch last fall—right about the time she figured out she'd just spent more than an hour with a convicted felon—Irvine City Councilwoman Christina Shea had the sinking feeling she was being set up.

For months, Shea had opposed Mayor Larry Agran's drive to create a multimillion-dollar partnership with ENCO, an Anaheim-based power company. The resulting public-private utility would power all of the city's new developments. Last week, the Weeklyrevealed that ENCO has unpublicized financial ties to Edward Dornan, a longtime top Agran political adviser and campaign fund-raiser.

"I had always been the lone vote in opposing the ENCO deal," Shea said recently.

The lunch was set up through an intermediary—not just any intermediary, but Miguel Pulido. The high-powered Santa Ana mayor had traveled to Mexico with Shea on a trade mission, and Pulido, a Democrat in name only, had found much in common with Shea, a longtime Republican activist and elected official.

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According to Shea, Pulido "contacted me multiple times," urging her to have lunch with Frank Hill, a man Pulido claimed was connected to then-newly elected governor Arnold Schwarzenegger. According to Shea, Pulido said Hill was prepared to offer her a job in the Schwarzenegger administration.

"I'd always thought of Miguel as my friend," Shea said, so she met Hill at Irvine's Prego Ristorante on Nov. 19. As she recalls it, the engagement sounds less like lunch and more like a boiler room. He offered to land her a state job but wouldn't specify what sort of position or agency, just the salary—around $100,000 per year—and benefits: after just one year of service, Hill told her, Shea could quit, return to her lucrative Irvine real-estate business and collect a generous portion of her state salary as lifetime retirement pay.

"He kept pushing me," recalls Shea, whose council term expires in December 2006. "He wasn't rude, but he didn't want to let go. It wasn't like he was asking me questions or seeking my opinions. He was telling me it was a good idea to take a job in Sacramento. I felt like he was a guy on a mission. I didn't know this guy from Adam. He didn't really seem to listen to me. I didn't see the value in what he was offering me, and I didn't want to leave Orange County. At the end of the lunch, he said, 'Thank you.' He looked disappointed. He seemed kind of desperate."

Afterward, Shea acted on two immediate thoughts: "Who is this Frank Hill guy?" And "Why was he pressuring me so much?"

What the councilwoman learned wasn't comforting: Hill's residence for much of the 1990s was the federal prison camp at Boron, California. In 1998, Hill finished serving a 46-month sentence for extortion, conspiracy and money laundering following an FBI political-corruption sting in Sacramento. A onetime Republican state assemblyman and senator from Whittier, Hill had unsuccessfully asserted his innocence all the way to an unsympathetic Ninth U.S. Court of Appeals. The FBI sting, which nabbed five politicians and political aides, was airtight. In Hill's case, undercover agents videotaped him accepting a $2,500 bribe in a hotel room.

But more alarming to Shea was her last discovery: like Agran adviser Dornan, Hill nowadays represents ENCO. According to Councilman Chris Mears, Dornan has privately bragged that he would earn more than a million dollars if Agran succeeds in his plan to give the company a no-bid contract. Despite mounting public outrage, the City Council will consider the contract on Aug. 24.

(Agran, Pulido and ENCO president Dennis Eastman did not respond to interview requests. Hill, who has worked in recent years as a paid consultant to Orange County state legislators Bill Morrow and Ross Johnson, could not be reached for comment.)

"It was a huge eye-opener when I found out that Frank Hill worked with ENCO," said Shea. "I wondered: Was Larry Agran behind the proposal to get me a job up in Sacramento and off the council?"

Part of Shea's calculus is that she knows Agran and Pulido have become something of an axis. They are allies in the multibillion-dollar Centerline rail project. And last September—two months before Pulido began urging Shea to meet with Hill—Agran gave Pulido a seat on the powerful Great Park board of directors, reportedly reneging on promises to make room on the board for a Cal State Fullerton official. The board will govern the largest public-private development in Orange County history.

Mears, a Democrat and longtime Agran ally who is not running for re-election in November, in part because of the Agran-Dornan-ENCO relationship, said Shea's suspicions are well-founded.

"Last year, when I was still part of Larry's political machine, he talked to me about his hopes of enticing Christina off the council," said Mears. "I can't recall if he mentioned this in the same breath as ENCO, but I do remember it coincided with Larry's big push for the utility deal."

Mears also remembers that Hill approached him last year, at about the time the ENCO deal was coming together. Hill "introduced himself and said he was glad to see that we were doing the utility deal," Mears said. "I have complete confidence he's involved with ENCO."

So does City Councilman Mike Ward. Last November, Ward met twice with Hill at Chanteclair, the upscale airport-area restaurant. Hill "introduced himself as representing ENCO and was very interested in [the city of Irvine] completing the deal." According to Ward, Hill came to the lunches armed with financial information purporting to prove that the city and ENCO could make millions by running a public-private utility.

Ward is now an ENCO skeptic. The councilman says he's alarmed about Dornan's involvement in the project and Shea's suspicions about the alleged job ruse. He's concluded "there's no reason" for the city to get into the "risky" power business. If ENCO representatives show up at the Aug. 24 meeting, he expects a lively debate. Said Ward, "Frankly, there's a lot to talk about."

For Shirley Grindle, a prominent clean-government activist, Agran's City Hall and the ENCO deal "now smell."

"I'm ashamed that people like Larry Agran, who I once considered a straight arrow, are playing power politics at its worst," said Grindle. "No, 'ashamed' isn't the right word. I'm disgusted."

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