A City Council committee recommended Wednesday that the Department of Airports cancel lucrative concessions contracts with two firms that have come under fire for paying $7.3 million to a small group of prominent minority group members and women while requiring them to do little or no work.
The unanimous vote by the Governmental Efficiency Committee calls for city officials to renegotiate the existing contracts so that minority and women partners have a hands-on, meaningful role in the operation of food and gift shop contracts at Los Angeles International Airport.
The concessions contracts now bring in more than $100 million a year in annual sales at the airport, the companies have reported.
"This is a very strong recommendation and sends a very loud message to the airport that we want the policy changed in a very fundamental way and we expect them to do something about it," Councilman Marvin Braude said.
It is unclear whether the city legally can force the companies--Host International Inc. and Duty Free Shoppers Ltd.--to renegotiate the contracts, according to Assistant City Atty. Jerome A. Montgomery.
Airport Commissioner Johnnie L. Cochran Jr. said the committee's action took him by surprise.
"We'll have to get a reading from the city attorney," Cochran said. "Whatever they say we can do legally we are willing to do. . . . Duty Free and Host may have some thoughts about this, too. It'll be interesting."
Officials for Host and Duty Free could not be reached for comment.
Committee Chairman Michael Woo said he hopes that Wednesday's vote will encourage the companies to tear up the current contracts and provide real opportunities for minorities and women to participate in the concessions business.
"It is not my goal to limit the participation of women and minorities in lucrative city contracts . . . to just a few (individuals) who attend the right parties and have the right friends," Woo said.
The third member of the committee is Ernani Bernardi.
The Times first reported last June that a group of politically well-connected minorities and women were placed in programs that were designed to help disadvantaged businesses gain valuable experience in the airport concessions industry.
The partners included Bishop H. H. Brookins, a longtime African Methodist Episcopal Church leader and political mentor to Mayor Tom Bradley; Betty Dixon, the wife of House Ethics Committee Chairman Julian Dixon (D-Los Angeles); Los Angeles Urban League President John Mack; Andy M. Camacho, a close political ally of Councilman Richard Alatorre; Evelyn Martinez-Zapata, a Los Angeles City Housing Authority administrator and former Bradley aide, and three Atlanta businessmen who have contributed to the mayor's political campaigns.
A city audit in November disclosed that 18 minority members and women reaped $7.3 million in profits between 1986 and 1989 after investing virtually no money of their own and doing little or no work in the concessions business. Betty Dixon was paid $500,000 over four years, the audit found.
Brookins, who received at least $296,840 between 1986 and 1989, told The Times in a recent interview that he had no intention of ever working at the airport. Instead, the bishop said, he was paid for prior lobbying efforts in an attempt to win a gift shop contract for Host International.
Brookins recently sold his interest in the food and beverage concessions to his minority partners for $130,000, Host officials said.
The joint-venture agreements were negotiated in 1986 and 1987 when the city began a push to bring the participation of disadvantaged businesses closer to the airport goal of 20% for minorities and 12% for women. But neither contract required the partners to be actively involved in operations as envisioned by the city's minority business enterprise program.
The committee recommendation approved on Wednesday calls for specific changes in the existing agreements. According to Woo, these include:
* Requiring minority and women partners to participate in the business. The participants should "perform a commercially useful function and be responsible for execution of distinct elements of the work of a contract."
* Dealing with legitimate minority- and women-owned businesses, not individuals who incorporate firms in their own names as is now the case. In the event some partners are unable to participate in concessions, they should be replaced through open, competitive bidding.
* Linking the percentage of financial participation in the concessions contracts to the amount of actual involvement in the business. Under the current contract, Brookins owned the largest share of the food and beverage concessions even though he resided in Washington and had no involvement in the operation.
The committee gave the Department of Airports 45 days to renegotiate separate contracts with Host and Duty Free.