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City may renew LAX cab agency's contract despite critical audit

Airport department staff recommends company even though firm mismanaged money and violated workers' compensation laws.

December 19, 2009|By Dan Weikel
  • City controller says Authorized Taxicab Supervision handed out cash to cab company managers but could not document why.
City controller says Authorized Taxicab Supervision handed out cash to… (Los Angeles Times )

A nonprofit agency that has managed taxicabs at Los Angeles International Airport for years has been recommended for another LAX contract, although a 2007 city audit found that the company had mismanaged money and violated state workers' compensation laws.

After evaluating competing proposals from two companies, the staff of Los Angeles World Airports recommended Friday that airport commissioners at the Jan. 11 meeting award a new five-year concession contract to Authorized Taxicab Supervision Inc. An evaluation panel concluded that the firm was the most qualified bidder.

In addition, the airport staff called on the commission to increase the fee taxi drivers pay each time they enter the airport from $2.50 to $4.30. The fee provides millions of dollars a year in revenue for the airport department and Authorized Taxicab Supervision.

Because the nation's third-busiest airport is a magnet for cabs, the company assigns taxis to come on different days and operates a holding lot near Terminal 1 where drivers wait to be dispatched.

The commission's consideration of the company's contract is expected to be controversial because of a January 2007 audit by the city controller, who cited a host of irregularities at the company. Company officials have disagreed with the findings.

Gina Marie Lindsey, executive director of Los Angeles World Airports, said the department has adopted virtually all recommendations made by the audit and set performance standards for the company.

Nevertheless, some cabdrivers and their advocates, such as the Los Angeles Taxi Workers Alliance, say that the company's employees have treated them badly and that the company's finances have not been in order.

"We are very concerned that after so much deliberation about the controller's audit, which exposed corruption, LAWA has only come back to recommend the same company for this contract," said Hamid Khan of the taxi workers alliance. "There are other competitors. LAWA has failed to do its due diligence to uphold the best interests of the traveling public."

The controller's office said the company handed out cash to cab company managers but could not document why, and had paid employees who were supposedly hurt on the job, but never filed reports required by state regulators.

Auditors found that the company paid tens of thousands of dollars to lawyers and contractors with no evidence that it received sufficient services in return.

The controller also stated that the company was paying off-duty police officers to direct traffic and search the airport in their own cars for illegal bandit cabs -- work that airport officials knew of but did not object to, although it was not authorized in the contract.

Auditors said the airport agency abdicated its responsibility to monitor the company, stating, for example, that the company had charged a catering truck $24,000 a year to park near Terminal 1, but LAX officials did not know about it.

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