In the first application of Los Angeles' broadened anti-apartheid policy, a subsidiary of the giant Fluor Corp. was stripped of tentative approval to manage a $310-million expansion of the Los Angeles Convention Center.
The Convention and Exhibition Center Authority's commission unanimously approved an anti-apartheid resolution of its own, then rejected all 17 bids it had received in the spring on the management contract.
The votes effectively disqualified Fluor Constructors, a domestic subsidiary of the international Fluor Corp., from the $2.5-million contract that it had tentatively been awarded but which was never formally ratified.
To apply economic sanctions against South Africa, the City Council had previously urged that Fluor be stripped of its contract because of its dealings with that racially segregated country. The commission was required to adopt its own anti-apartheid ordinance because the CECA is a quasi-independent agency not bound by the council's policy.
Like the City Council's ordinance, the commission's anti-apartheid resolution restricts contracts with firms whose subsidiaries or parent companies do business with South Africa.
Although it is a domestic company, Fluor Constructors fell under the resolution because its parent corporation handled about $40 million worth of South African business last year. That total represents about 1% of Fluor Corp.'s total revenues of $4.2 billion, according to Rick Maslin, the Irvine-based company's spokesman.
Commission members did not mention the apartheid issue or South Africa directly, but their resolution said the policy of institutionalized discrimination there denies "basic human freedom and dignity to the black majority." The authority "reaffirms its right . . . to measure the moral character of its business relations," the resolution said.
Commission members indicated concern about the impact of the anti-apartheid stance beyond the management contract.
But Assistant City Atty. Pete Echeverria said conventions would not be limited by the ordinance unless their promoters had South African connections. "The policy applies to the ties that a promoter might have, not (to) any of the exhibitors," he said.
Before the council session Wednesday, a Fluor spokesman argued that the company should win the contract because the city policy banning dealings with South Africa-related firms was not in effect when the company won tentative approval earlier this year. Fluor officials did not attend the commission meeting.
Dick Walsh, general manager of the Convention Center, said the second tentative contractor selection could be made within 60 days. The delay is expected to have no effect on plans for expansion of the center, which is scheduled for completion in 1991. The remodeling will add 375,000 square feet of space to the center's existing 235,000 square feet.