Students at Mission Colleges 90,000-square-foot fitness center, a project… (Anne Cusack, Los Angeles…)
For years, the Los Angeles Community College District has relied on Gateway Science & Engineering to supervise the $450-million rebuilding of Mission College in Sylmar.
Gateway is paid to police construction quality, keep contractors on schedule and review all bills and payments.
For at least a year, however, Gateway collected consulting fees from one of the main contractors it was overseeing on the campus, FTR International of Irvine. At the time, FTR was building a 90,000-square-foot fitness center at Mission, a project beset by delays, cost increases and alleged lapses in workmanship, district records show.
While receiving the consulting fees beginning in 2009, Gateway approved $3.4 million in district payments to FTR over the objections of architects and engineers who said the construction firm was billing for more work than it had done on the fitness center, according to documents obtained under the California Public Records Act.
During this period, Gateway also supervised the evaluation of bids for a $29-million contract to build a student services center at Mission College -- even though FTR was among the bidders, records show.
After a campus committee voted to give the job to a different contractor, a Gateway employee who was on the panel expressed displeasure with the choice and spoke in favor of FTR, witnesses said. A second vote was taken, and this time the committee selected FTR.
Gateway's consulting agreement with FTR called for it to be paid up to $3 million for advising on construction quality and worker safety on a project at West Los Angeles College, one of nine campuses in the district. Gateway has collected about $300,000 to date, records show.
James Zack, an Irvine construction manager who is often hired to settle disputes between contractors and public agencies, said the arrangement between the two companies "does not pass any smell test."
"There is certainly a huge appearance of conflict of interest, and I can't imagine if anyone on the college district board knew anything about this that they'd allow them to proceed in this fashion."
Miguel Santiago, president of the district's board of trustees, said no one told the board that Gateway was collecting fees from FTR on one campus while overseeing its work on another. But district records show that top managers of the districtwide construction program knew about the consulting agreement and that none questioned it.
Requests by The Times for public records about the two companies' dealings sparked an investigation by the district's inspector general.
As a result of that probe, the district has accused Gateway of approving a fraudulent bill from FTR for work on the fitness center. For that and other alleged mismanagement, the district is seeking to terminate Gateway's contract at Mission College and bar FTR from campus construction work for up to five years.
Both companies have denied wrongdoing.
Gateway's owner, Art Gastelum, a leading political fundraiser and former City Hall lobbyist, said top district officials approved the consulting deal in advance. The payments from FTR, he said, had no influence on his firm's supervision of the company's work at Mission.
"There was no quid pro quo here," he said in an interview.
"No matter what relationship I have with FTR on another campus, if they don't do their work on my campus, I'd fire them," Gastelum said in another conversation.
He said it was standard industry practice for a construction management firm overseeing a contractor on one project to accept fees from the same contractor on another.
"Why is it OK for the big guys to do it, and it's not OK for a small minority firm to do it?" asked Gastelum, who is Latino.
FTR's owner, Nizar Katbi, declined requests for an interview.
In a recent letter to the trustees, Katbi said FTR made "full disclosure" to the district about its consulting payments to Gateway.
"FTR has done NOTHING unethical," he wrote.
Ambitious program
The Mission and West L.A. projects are part of the district's $5.7-billion, taxpayer-funded rebuilding of its nine campuses -- one of California's largest public works programs.
Lacking expertise in construction, the district's elected trustees hired one construction management firm to run the overall program day-to-day and nine others to supervise projects on each campus.
For Mission, they chose Gateway, which is based in Pasadena. Gastelum, now 62, founded the firm in 1993. A top aide to Los Angeles Mayor Tom Bradley from 1973 to 1990, he is a prodigious campaign fundraiser and a leading source of donations to district trustees.
Katbi, too, has been a top donor to the trustees. FTR, which he founded in 1984, has built school buildings, police stations and athletic facilities across Southern California. Overall, it has won $232 million in contracts with the district construction program.
It was hired to build the Mission fitness center in 2007 after submitting a $34-million bid, the lowest of five.
