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Contra Costa Times (California)
Oct 22, 2004 - 01:00 AM

by Andrew LaMar; TIMES SACRAMENTO BUREAU

Leader of Bay Bridge panel linked to potential bidder

SACRAMENTO -- The head of a key gubernatorial advisory panel, whose recommendation led to last month's rejection of a Bay Bridge reconstruction bid, worked as a consultant to a company that stands to benefit from the decision.

Although Tom Warne says the work he did for the giant construction firm Peter Kiewit Sons', Inc. of Omaha, Neb., was minimal, and that he has no current ties to the company, there is no way to verify that. Unlike public officials, most consultants need not reveal their economic interests.

The case highlights a murky area of California's Political Reform Act of 1974 and raises questions about whether Republican Gov. Arnold Schwarzenegger, who relies heavily on outside advisers, will insist on the same disclosure standards as his Democratic predecessor, Gray Davis.

At the height of the 2001 energy crisis, Davis, under pressure from Republicans, required many of his energy consultants to disclose their holdings. He ended up firing five who advised him on power purchases after he learned they owned stock in companies from which the state bought electricity.

State law mandates filing conflict-of-interest forms for government officials, or those who make government decisions. The provision does not apply to consultants who go no further than offering advice. The statements can be revealing because they show roughly how much outside income a person receives and from what sources.

Even if the law doesn't require it, Schwarzenegger should demand that his bridge advisers -- and outside consultants on everything from prison reform to government reorganization -- make public their economic interests, said Doug Heller of the Foundation for Taxpayer and Consumer Rights.

"If the government is bringing in consultants, it is not a whimsical move just to get a second opinion. I suspect they are soliciting advice they will implement," Heller said. "For that reason, the public has a right to know what interests and influences might affect the advisers."

But Rob Stutzman, Schwarzenegger's communications director, said it's not fair to compare the bridge advisers to Davis' energy consultants.

"It's like comparing apples and oranges," Stutzman said. "Those were consultants hired as quasi-employees to buy energy for the state, to spend public dollars. That's not what these consultants are doing."

Administration officials said the state has done everything necessary to ensure the consultants are acting in the public's best interest. As a condition of their contracts with the state, Warne and the other private consultants declared they have no conflict of interest.

Warne served as head of the Utah Department of Transportation from 1995-2001. There, he oversaw a $1.6 billion project to rebuild 16 miles of Interstate 15 that included 142 bridges. The project was built by a consortium led by Kiewit.

In an interview, Warne said he has done little for Kiewit since launching his consulting firm three years ago. The company paid him to speak at one of its conferences, and he was paid by Kiewit and the Los Angeles metro rail system to mediate their disputes.

"You don't get to my position and my role and my ability without working with virtually every company of substance in this country," Warne said.

Warne's relationship with Kiewit is revealed on his Web site. Tom Warne and Associates, LLC, lists the firm and 63 other companies or government agencies as "clients served." Warne said he is not currently under contract to Kiewit.

The state has paid Warne and the seven other bridge advisers $148,000 so far.

Construction of the new eastern half of the span has four major elements, with the next phase to be awarded, the self-anchored suspension, considered the most exotic.

In May, a consortium led by the American Bridge Co. submitted the only bid to build the suspension section. It came in at $1.4 billion, far above the $780 million expected. Kiewit had planned to deliver an offer but, company officials said, the firm couldn't get it done in time.

The governor's advisers recommended the state turn down the lone bid, which it did last month, and explore streamlining the bridge's design to save money. The move opens the door for Kiewit.

Kiewit has another connection to the administration. For advice, the company has turned to California Strategies, a firm headed by Bob White, a top adviser to Schwarzenegger during last year's recall campaign.

One Bay Area lawmaker cautioned that the administration must dispel any notion of favoritism or conflicts of interest to ensure the state receives multiple, competitive bids on the next phase of the bridge.

"If there is anything to lead people who might offer a bid to think it's a done deal of some kind and therefore not bid, that would be very harmful to the process," said Assemblywoman Loni Hancock, D-Berkeley. "If there are paid consultants who have relationships with potential bidders, that ought to be made clear from the outset."
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Contact the author Andrew LaMar at alamar@cctimes.com




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