Transit Contract Stirs Controversy : Government: Supervisor Gloria Molina's appointee helped her husband win job. They say no impropriety has occurred.

By NORA ZAMICHOW

May 31, 1993 12 AM PT

TIMES STAFF WRITER

Los Angeles County Supervisor Gloria Molina’s husband won a $193,200 consulting contract after Molina’s appointee to a local transit board helped derail awards to competing firms, records show.

Antonio Villaraigosa, a Molina appointee, abstained from voting on the awarding of the contract to Molina’s husband, Ron Martinez, a Los Angeles affirmative action consultant.

But Villaraigosa twice voted to rescind award of the contract to other firms after Martinez had lodged formal protests.

The vote on Martinez’s contract occurred less than 24 hours before new regulations took effect that would have blocked his selection.

Villaraigosa, now Molina’s alternate on the Metropolitan Transportation Authority, said he broke no laws and merely wanted to make sure that Martinez had a fair opportunity to win the contract.

He acknowledged that his 14-year friendship with Martinez may have influenced his actions. “I’m sorry if it looks bad--I never meant to do anything bad,” said Villaraigosa, a union official who served as best man at the Martinez-Molina wedding.

“Did the fact that I know him come into play? Maybe,” Villaraigosa said. “I wasn’t going to ding him because I knew him.”

Molina and Martinez said no impropriety occurred and that they never discussed the contract with each other or Villaraigosa.

“I was very, very careful not to get involved,” Molina said. “I worked very hard not to create any influence.”

The supervisor said her political enemies had tried to deny her husband a contract for which he was qualified. “People are using whatever feelings they have about me against him instead,” she said. “Marriage to me is working against him. . . . Being a political spouse is not a great thing.”

During her campaign two years ago, Molina said her husband would stop doing business with the county. Later, it was reported that Martinez had continued doing consulting work for the county, even after his $100,000 contract was withdrawn, and wanted to be paid for the work he had done.

In this case, the contract was awarded by the Union Station Gateway board, which included members of the Southern California Rapid Transit District board. Villaraigosa was Molina’s appointee to the RTD.

As of April 1, the RTD merged into the MTA. Molina is an MTA board member.

Under MTA regulations, spouses of board members are prohibited from bidding on MTA contracts because policy-makers should have no financial interest in their decisions, said Jeff Lyon, MTA assistant general counsel.

“There’s a very serious problem if the contract process was speeded up,” Ruth Holton, executive director of California Common Cause, said when contacted for comment. “It certainly creates the appearance that there was an attempt to avoid stricter ethical requirements under the new agency.”

For the past year, the Union Station Gateway board struggled to select a consultant to ensure that minority- and women-owned businesses share in construction of a new transit center at Union Station. There were three abortive attempts to select a contractor before Martinez’s firm, PeopleWorks, was chosen.

The $193,200 contract is small compared to the billions of dollars that are being spent on a regional transit network. But the winning bidder has the responsibility for recruiting and screening disadvantaged businesses to perform millions of dollars in work on the $119-million Union Station project.

The fight over the contract also pitted two powerful Latino leaders and longtime rivals: Molina and Councilman Richard Alatorre, who is chairman of the MTA and a member of the Union Station Gateway board.

All of the top-ranked candidates had close ties to Molina or Alatorre.

“Everybody who saw this fight coming tried to crawl under a rock,” said Gary Spivak, executive assistant to the head of the MTA.

On March 9, 1992, the contract was unanimously awarded to Leon Garcia, head of Southwest Consultants, who said he has known Alatorre for 30 years and donated $500 to his campaign in 1987.

In April, 1992, Villaraigosa proposed a motion supporting a protest lodged by Molina’s husband. No one seconded his motion. Alatorre proposed that the board proceed with Southwest. Again, no one seconded the motion. As a result, the six-member board decided to repeat the entire selection process.

Garcia’s contract was derailed, in part, because Martinez’s lawyer, Robert Hertzberg, alleged that there was plagiarism in some materials supporting Garcia’s application. Garcia denied the charge and said all materials that he submitted were his own.

“I won it fair and square, and I was gypped out of a contract,” said Garcia. “The board was afraid of Gloria Molina and that’s why they didn’t award me the contract. The reason I didn’t get it was Gloria Molina and her political influence. Talk about political chicanery.”

Villaraigosa defended his actions, saying he was trying ensure fairness. “I took on these guys who were trying to deny Ron (Martinez) because he’s Gloria Molina’s husband,” he said.

The new selection process was halted several months later when officials learned that one juror evaluating the bids was in litigation that indirectly involved Martinez.

On Dec. 21, the contract was unanimously awarded to Cordoba Corp., whose owner, George Pla, has run political campaigns for Alatorre. Alatorre’s 29-year-old son, Derrick, has worked for the Cordoba Corp. for the past four years.

Villaraigosa abstained from the contract vote. But he later supported a protest by Martinez and Hertzberg, who said Cordoba had an unfair advantage because the firm had done work associated with the Union Station Gateway project.

On March 15, Villaraigosa proposed a motion to rescind the contract. And Hertzberg urged the board to act swiftly to award the contract to Martinez.

“There’s an urgency here,” he said. “As you know the principal shareholder of my client is Supervisor Gloria Molina’s husband, Ron Martinez.”

He said Martinez would not be eligible to compete for the contract after March 31--when the MTA officially started operations.

Villaraigosa joined in the Union Station board’s unanimous vote to rescind the Cordoba contract. But, heeding an earlier legal opinion, he abstained when the board awarded the $193,200 contract to Martinez at a special meeting March 31.

“Was I more aggressive about taking on these guys on meeting after meeting? Maybe,” said Villaraigosa, an area representative for United Teachers-Los Angeles.

Pla declined to comment on the contract award, except to say: “We win some. We lose some.”

Alatorre could not be reached for comment.

Because the contract was granted to Martinez before MTA rules took effect, the agency’s legal department did not evaluate the matter. “It was awarded before the end of March so we didn’t look into what was a non-issue,” said MTA attorney Lyon.

In an interview, Hertzberg--whose brother Gerry Hertzberg is Molina’s chief legislative deputy--said he was no longer certain that Martinez would have been prohibited from bidding on the contract after April 1. He noted that although the Union Station Gateway was absorbed by the MTA, it is a board with members from the private, as well as public, sector.

“I made that argument out of an abundance of caution,” Hertzberg said. “I didn’t want to take any chances. . . . Obviously, an elected official can’t have an economic interest in a contract. My thinking is that under the MTA, there might be a greater nexus.”

Martinez said the contract is especially important to his one-man company because he previously was forced to give up county business.

His wife’s enemies “think they can take her down by going through me, by destroying our marriage and family life,” Martinez said. “The only person who is going to get hurt is my business.”