Two government whistle-blowers who claimed they were fired five years ago for exposing fraud in a Los Angeles transit contract have been paid a total of more than $1.2 million under a confidential settlement with the Metropolitan Transportation Authority, officials disclosed Thursday.
It marks the biggest in a string of recent settlements won by transit employees who have quietly agreed to drop their claims of harassment in exchange for six-figure settlements from the MTA or its contractors on the mammoth Metro Rail subway project.
In all, the payouts to whistle-blowers--some awarded in court by juries, others negotiated in private by attorneys--now total more than $3.5 million in at least half a dozen lawsuits resolved during the last year, records and interviews show.
In the most recent case, former transit agency investigators Allen Laster, 58, and Richard Yeats, 49, each received $600,000 under the terms of their settlement, reached late last month after several weeks of stepped-up negotiations.
Their case was scheduled for trial next week in Los Angeles Superior Court. But the settlement scuttled the prospect of a public airing of accusations that top transit officials tried to cover up wrongdoing in the handling of sensitive minority business contracts.
"If it comes down to the point where everybody is given a fair shot at those (minority business) contracts," Laster said, "then this will have been worth it."
MTA officials, who acknowledged the settlement in response to Times inquiries, said the agency admitted no wrongdoing in the matter. Spokesman Bill Heard said he was "not going to discuss the whys and wherefores of the case."
Laster and Yeats alleged in their lawsuit that they had found evidence that an Atlanta company may have fraudulently earned hundreds of thousands of dollars from transit contracts by posing as a minority firm--but officials tried to suppress the findings.
The two investigators examined allegations that the signature stamp of one administrator at the RTD--the predecessor agency to the MTA--was forged in order to certify that the firm, Communications International, was a small, minority-owned company eligible to compete for certain contracts.
During their investigation, Laster and Yeats charged that an RTD official tried to intimidate one key witness by suggesting that his career at the agency might suffer if he cooperated with the inquiry.
When Laster and Yeats confronted the administrator about these "intimidation" tactics in July, 1990, they were fired that same day, they said.
MTA officials have refused to divulge why Laster and Yeats were dismissed, except to say that they no longer held the confidence of their bosses. The pair served at the pleasure of the agency, so they were legitimately dismissed from their jobs, MTA lawyers have argued.
The former transit investigators won a major victory last year when the 2nd District Court of Appeal ruled that they appeared to have been fired for raising the allegations of an agency cover-up and confronting their boss about it.
In light of the "exemplary" records of the two men, the court found that the firings may have been "retaliatory." The court refused an effort by the MTA to throw out several key claims, saying a trial court should hear the issues.
"I think the (MTA) really knew we had a strong case after that," said Laster, who is unemployed after four years working part time in racetrack security.
Yeats and Laster refused to discuss the terms of the settlement, citing a confidentiality agreement that they said the MTA had asked them to sign.
Their settlement reinforces the impression that whistle-blowers in the county transit system are "pariahs" who risk their livelihoods in ferreting out corruption, said Larry M. Roberts, a Pasadena lawyer who has handled several whistle-blower suits.
During the last year, at least half a dozen of these cases have resulted in out-of-court or jury awards.
Ben Pate, a Metro Rail tunnel inspector with 35 years experience, won the biggest sum when a Pasadena jury in August awarded him $1.38 million.
Pate had alleged that a contractor on the project, Parsons Dillingham Construction, wrongfully fired him after he refused to approve "shoddy and improper workmanship" and then blackballed him in the industry. The company denied the allegations.
Two months before that, ex-county transit official Robert S. Inouye was awarded $518,000 by a Los Angeles jury. Inouye alleged that transit authorities fired him after learning that he had gone to the district attorney with allegations of potential fraud in a minority business contract.
And within the last six months, sources disclosed Thursday, three other Metro Rail employees reached confidential settlements totaling more than $500,000.