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Ethics Panel Looks at MTA Vote by Riordan

August 26, 1994|DAVID WILLMAN | TIMES STAFF WRITER

The state's political ethics commission is investigating Los Angeles Mayor Richard Riordan to determine whether he violated conflict-of-interest law by taking action last year that benefited an engineering firm in which he held $9.75 million of stock.

People familiar with the investigation said this week that the California Fair Political Practices Commission is examining Riordan's role in 1993 as a board member of the Metropolitan Transportation Authority. As a first step, the commission has requested documents from the MTA.

The Times reported in June that Riordan, who pledged during his 1993 campaign to separate his business holdings from any official duties, took actions that benefited Tetra Tech Inc., a Pasadena-based engineering firm. Financial disclosure reports show that Riordan's stake in Tetra Tech was his largest single holding in 1993.

Riordan has said that he was unaware one year ago that his actions at the MTA would benefit Tetra Tech. The mayor on Aug. 25, 1993, introduced and won passage of an amendment to the MTA's budget that committed $97 million for a light-rail project that would link Downtown Los Angeles and Pasadena. Although the amendment did not mention Tetra Tech, it provided funding for a contract the firm had received in June, 1993, one month before Riordan took office.

Within seven weeks of that vote, Tetra Tech received its first $267,000 under the contract. As of June of this year, Tetra Tech had received about $320,000.

Colleen C. McAndrews, an attorney who is representing Riordan, said Thursday that she believes the FPPC investigation is at an early point.

"As far as I know, it's at a very preliminary stage," said McAndrews, who served as an FPPC commissioner from 1977 to 1983.

The FPPC is empowered to impose administrative penalties and fines and, more rarely, to refer cases for criminal prosecution.

McAndrews said the mayor could not have violated conflict-of-interest law because he has said he was unaware last year that his championing of the $97-million amendment would benefit Tetra Tech.

"He didn't have knowledge (of a potential conflict of interest) and there is really no way he could reasonably have had knowledge," McAndrews said.

Riordan's press secretary, Noelia Rodriguez, said Thursday that the mayor's office is "more than willing to cooperate with any investigation that takes place." Rodriguez also said that all of Riordan's stock in Tetra Tech was sold recently.

For Riordan, the liquidation marks the end of a six-year affiliation with Tetra Tech--a firm that he helped establish in 1988 with a leveraged buyout that allowed its existing management to purchase control from Honeywell Corp.

Riordan and one of his investment banking partners held two of the three seats on Tetra Tech's board from 1988 to 1992. Riordan's investment banking partner, J. Christopher Lewis, continues to serve on Tetra Tech's board and is trustee of the mayor's 14-month-old blind trust.

In Sacramento, a spokeswoman for the FPPC, citing agency policy, declined to discuss the Riordan matter.

After The Times' article in June, the FPPC was urged to open an investigation by California Common Cause, the nonpartisan lobbying group, and by state Sen. Tom Hayden (D-Santa Monica).

Jeanette Turvill, spokeswoman for the FPPC, said the agency investigates only a small fraction of requests. Last year, Turvill said, the FPPC received 750 written requests to open investigations.

A letter sent by an FPPC attorney to Riordan's attorney on July 13 said the mayor would have to abstain from certain future budgetary decisions affecting Tetra Tech in order to avoid a conflict of interest.

The FPPC letter, in response to a request for advice from McAndrews, stated that Riordan must abstain from participating in budgetary decisions in which he has a "disqualifying financial interest."

State law generally prohibits officials from participating in decisions that affect their financial interests of at least $1,000.

McAndrews, noting that the FPPC's advice applies to future actions, said she does not believe that the letter can be interpreted as a passing of judgment on Riordan's role a year ago with the Pasadena line amendment.

Riordan was absent last month when the MTA voted on its latest budget. McAndrews said Riordan's absence was caused by a scheduling conflict, not concern for the recent FPPC advice letter.

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