Hefty Contracts for Campaign Contributors in Huntington Park
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Legislation to bar local elected officials from accepting, soliciting or directing contributions of over $250 from pending contractors cleared the California Senate 34-0 and will be considered by the Assembly's elections committee next week.
The bill, SB 1439, would apply to contributions from anyone affiliated with a group that has a pending license, permit or contract — or three months after a final decision on that.
Existing law prevents appointed officials on state and local agencies from accepting such contributions.
Cities such as Alhambra, Baldwin Park, Claremont, Costa Mesa, Culver City, Gardena, Glendale, Los Angeles, Malibu, Pasadena and West Covina "have some type of prohibition on campaign contributions with developers and contractors that have business before the governing body and, sometimes, a range beyond three months following an action," according to a Senate staff reports.
The bill's author and main supporter citedthe KCET story below.
The city of Huntington Park doled out more than $11 million combined from 2018 to 2020 to contractors Express Transportation Services, Nationwide Environmental Services, LAN WAN Enterprise and Alvarez-Glasman & Colvin — companies that donated gifts and campaign contributions to council members during that time, according to public records obtained and analyzed by KCET.
In all, $38,000, or over 30 percent of the roughly $125,000 in campaign contributions to current city of Huntington Park council members, came from eight companies and their executives that were identified as city contractors at some point during that time, according to an analysis of the city’s campaign finance records. And at least half of the roughly $4,300 in gifts provided to council members came from city contractors or subcontractors, according to the politicians’ economic interest forms.
Another $6,000 in campaign contributions and $380 in gifts — Los Angeles Dodgers tickets — came from Unified Consulting, LLC, a firm owned by Efren Martinez, a power player in the areawith ties to half a dozen companies that did business with the city at some point during the three years examined.
In addition, companies that did business with the city during the years examined donated nearly $17,000 to Huntington Park Mayor Graciela Ortiz’s campaign in 2019 for a seat on the Los Angeles Unified School District board, which she narrowly lost.
In the past year, Huntington Park drew controversy over a no-bid contract that the city backpedaled on, a related informal recall petition targeting some city leaders, and some news in April: Six employees in the city’s finance department were placed on leave and one was arrested, according to the city.
The city alleged the employees were involved in an “information breach” while the employees’ lawyer claimed they’re being retaliated against for questioning suspicious bank transfers and potential conflicts of interest on city contracts, according to a Los Angeles Times story.
An examination of those contracts reveals some ties between council members and contractors in the form of campaign cash and gifts.
Experts say while these transactions don’t appear to violate campaign finance laws, they can create the appearance of undue influence and raise questions in residents’ minds about whether the city is getting the best deal for taxpayers on its contracts.
Sean McMorris, the policy and organizing consultant for California Common Cause, said the findings indicate a “classic culture of pay-to-play.”
“It doesn’t look like anything illegal is going on, however, the optics are horrible,” he said. “We all, whether we like it or not, are implicitly beholden to people who do things for us. It’s very hard to disconnect from people who do us a favor. What has been going on here for a while is pretty blatant. The only way to cure it is exposure and transparency and a public that demands better.”
Bob Stern, former president of the now-closed Center for Governmental Studies, agrees.
“It is important that [campaign] reports tell the public what is going on and perhaps embarrass the public officials into not taking the largesse from people doing business with their entity,” he said. He added that as long as the U.S. Supreme Court doesn’t allow strict regulation of campaign money, then disclosure and, to a limited extent, contribution restrictions are the only tools at the public’s disposal.
The Huntington Park council passed an ordinance this year to explicitly state the city has no campaign finance limits – instead of following new campaign contribution limits for cities set by AB 571.
“Residents should be concerned,” said Joe Settles, who was a city of Huntington Park police sergeant for 27 years. “I don't think there's a lot of transparency on the part of the city, but the public should know who is influencing public policy.”
Miguel Molina, whose family runs a business in Huntington Park, said some local politicians seem to be better at asking for residents’ support than working on community concerns such as trash pile ups, homelessness or other issues that affect residents and businesses.
“It doesn’t surprise me in the slightest that they’re all just donating to each [other] to keep everyone’s position secure,” Molina said.
City spokeswoman Paulina Velasco said the city outsources all of its IT, street sweeping and cleaning, tree trimming, and landscaping, public transit, legal counsel and trash hauling services: “This is a common practice for many cities in Southern California.”
Critics say cities and counties cede power and can create less transparency when too much of their work, products and services are outsourced or privatized.
LAN WAN Enterprise
LAN WAN, an information technology company, is one of the contractors that some suspect received special treatment from the city.
The company’s president, Zohair “Zack” Oweis, donated $3,000 to Ortiz’s city council race in 2020. He and another executive donated a combined $2,400 to Ortiz’s LAUSD race in 2019.
An analysis of the city’s payment records shows LAN WAN received about $2.2 million for technological services and products over the three years.
LAN WAN also supplied a combined $300 worth of dinners in late 2019 for council members Graciela Ortiz, Karina Macias, Manual Avila and Marilyn Sanabria, according to financial disclosure forms.
LAN WAN’s relationship with the city started with a 2014 no-bid contract for “emergency services,” after which it received a number of extensions or expansions of the contract over the years.
The city put the main technology work out to bid in 2016 and the council awarded LAN WAN a contract not-to-exceed $825,000 for three years after a warning from city staff related to the services LAN WAN had previously provided: “There are significant deficiencies in the city’s current IT service model and service delivery with LAN WAN...all of which must be addressed and corrected through a new contractual engagement.”
Several no-bid contracts or expansions were awarded to LAN WAN in 2017 because the company was considered a “single source” contractor or had “special knowledge and expertise in the city's network system.”
The city council also approved buying more than $320,000 worth of computers, software and services from LAN WAN in December 2019; more than $60,000to purchase and install key card hardware and related software and services in February 2020; and more than $200,000 for information technology support services this year. A competitive process wasn’t noted in the agenda materials. What’s more, the city doesn’t have its own IT staff so it relies on the company for all of its IT needs. According to Velasco, “through LAN WAN’s procurement process, they shop for the best prices and make recommendations to the city.”
McMorris said that cities like Huntington Park have good language in their municipal code about competitive bidding but there is also language that can work as a loophole to allow council members to waive those procedures by a majority vote.
He said there is no harm in going out to bid anyway – even if you think you only have one business that can do the job or you’re really happy with an existing company. “Why not just go out to bid? Then, there’s no blowback,” he said. “Especially when you’re getting large campaign funds from contractors, it makes it look really bad.”
Velasco said since LAN WAN’s 3-year contract starting in 2016 was amended and expanded by the council over the years, it is now set to expire in 2024, when it will be put up for a competitive bid.
Alvarez-Glasman & Coleman
The city reported paying over $1.7 million to the Alvarez-Glasman & Coleman law firm from 2018 to 2020 for legal services and the firm donated $6,000 to council members during that time. The firm gave $3,000 in 2020 to Ortiz, and $2,000 and $1,000 in 2018 and 2020, respectively, to Sanabria, according to campaign finance records. Ortiz received another $4,600 from 2018 to 2019 from representatives of the Alvarez-Glasman & Colvin firm for her LAUSD race.
The firm provided dinners worth $1,125 combined to council members in 2018 and 2019, including $375 total for Ortiz, $375 total for Manuel Avila, $225 total for Karina Macias and a dinner of $75 each for Eduardo Martinez and Marilyn Sanabria, according to financial disclosure forms.
The city hired Alvarez-Glasman & Colvin years ago and in April 2018, the firm’s request for an increase on its rates by $15 per hour for associates and $25 per hour for partners was approved as part of a budget adjustment.
Express Transportation Services
The city reported paying about $5 million to Express Transportation for transit services from 2018 to 2020, more than several other major contractors combined, according to an analysis of the city’s payment records during the three years examined.
Express Transportation, which has also done business as Metro Transit Services, donated $2,000 total to council member Marilyn Sanabria in 2018 and 2020, $2,000 to Ortiz in 2019, and $1,000 to Macias in 2019. The company also gave dinners worth $65 each to Ortiz and Avila in 2018, according to council members’ economic interest forms.
Questions raised in 2015 by then-council member Valentin Amezquita about the company’s no-bid contract were reported inan L.A. Times story.
Since then, several amendments favorable to the contractor were approved. These included one in February 2016 to appropriate an additional $145,000 to cover costs (which Amezquita voted against) and another for a new transit route in August 2019, according to city records.
Then, in August 2020, the city approved effectively increasing its budget for Express Transportation to account for higher costs related to the new route and minimum wage increases.
Victor Caballero, president of Express Transportation, initially declined to comment then wrote an email saying the “information is not correct and/or irrelevant to me or my company” and did not reply when asked to clarify what specifically was incorrect since the information comes from public records.
Nationwide Environmental Services
Nationwide, which has provided the city with bus and shelter cleaning, bus maintenance and street sweeping services, donated $11,500 to the current council members’ campaigns from 2018 to 2020, second in donations only to a restaurant. Donations included $4,000 to Ortiz, $3,500 to Macias, $3,000 to Sanabria and $1,000 to Avila. The company also gave $1,200 to Ortiz’s school board race in 2018 and 2020.
It also comped a total of $150 worth of dinners for Macias and Avila, according to disclosure forms.
The city reported paying Nationwide over $2.5 million during those years.
The company’s contracts with the city in years past had also drawn criticism: In February 2017, the L.A. Times reported Council Member Macias was paid for her work raising $25,000 for Efren Martinez’s Assembly race from companies that included city contractors such as Nationwide, which had received a contract worth more than $111,000 around that time.
One year later, in February 2018, the city council unanimously voted to merge Nationwide’s various contracts for different services into a single five-year contract and to allow the city manager to negotiate new terms. Nationwide had requested increasing its monthly sweeping fee by $4,300 due to “significant increases in labor, insurance, workers comp” and other costs; boosting the cost of cleaning each of the city’s catch basins from $17.43 to $29; and raising the frequency of catch basin cleanings from semi-annually to quarterly based on newer standards.
Consultant Efren Martinez’s Ties to Contractors and Companies
Critics allege Efren Martinez, a state Assembly candidate in 2020 who has served on the city’s planning commission and economic development committee, has an outsized influence on city politics.
The firm Martinez owns, Unified Consulting, LLC, donated $5,500 to Ortiz in 2020 and $500 to Macias in 2019, according to city records. The company also gave $380 worth of Dodgers tickets to Ortiz in 2018. (Separately, Martinez donated $1,200 to Ortiz’s school board race.)
Martinez has reported in his 2019 and 2020 economic interest forms that he received at least $10,000 in income from several companies with city contracts, including LAN WAN, Express Transportation and Alvarez-Glassman & Colvin. That list includes J.T. Construction, which was originally approved in 2019 for a controversial no-bid contract from the city, as reported by UT Community News.
When taken together, the contributions made in 2018 to 2020 to council members’ city campaigns from Unified and seven other companies that Martinez listed receiving revenue from in his disclosure forms add up to $25,100, nearly 20% of the over $125,000 donated to current council members during that time.
Martinez said in an email that the contributions from those companies didn’t come from him and financial disclosure forms require candidates to report any income over $500 that they may have received within the previous two years that involves doing business of any sort with an entity that operates in that area, even if the income received wasn’t for services tendered in that area: “Even though a company may have paid the person that filed the financial forms for his/her services that took place in a different jurisdiction...they still need to include that entity/company that paid him/her if they conduct any business activity within the jurisdiction that that person is filing the forms for, which is the case in my situation.”
He blamed what he called a “disgruntled” former council member for stirring conflict in the city.
Martinez is mentioned in an ongoing lawsuit filed by several people, including some former city employees, against the city of Huntington Park. The lawsuit alleges city leaders discriminated against the employees and retaliated when they raised questions related to the city’s finances and contracts. A copy of an amended complaint filed in January 2021 also alleges the city gave a marijuana dispensary connected to Martinez discounts on fees, which was included in a recent L.A. Times story.
Martinez denied the allegations in an email, saying, “I don’t own any cannabis business.”
Vanessa Delgado’s company, Azure Development, donated campaign contributions to Ortiz and Macias and is one of the companies listed on Martinez’s forms as paying him.
Delgado, the former mayor of Montebello and briefly a former California State Senator, said she donates to people because she thinks they’re good leaders, not to curry favor.
While Martinez did help with "community outreach efforts" related to a Huntington Park billboard project that Azure and its affiliates got approval for, Delgado said she hasn't actually paid him anything.
"If you look at my other contributions [recently], I have no business in those areas," she said. "I don't think my [small contributions] move any political decisions."
Other City Contractors
Other companies doing business with the city whose representatives donated to council members’ campaigns during the three years examined include North Star Land Care, which gave $3,000 to Ortiz plus $1,200 for her LAUSD race; Mr. C’s Towing, which gave $6,000 to Ortiz plus $2,400 for her LAUSD race; United Pacific Waste, which was acquired by CR&R in February 2019, gave $2,000 to Sanabria and $1,200 to Ortiz for her LAUSD race; and Prime Strategies, formerly Urban Associates, gave $2,000 to Macias and $1,200 to Ortiz for her LAUSD race.
The city’s payment records for 2018 to 2020 show that North Star received a total of more than $881,000, United Pacific Waste received roughly $670,000, and Prime Strategies, which acquired Urban Associates, got $140,000. Mr. C’s receives towing fees directly and gives a cut to the city.
Despite multiple emails to council members Macias, Ortiz, Avila and Sanabria, they could not be reached for comment. Council member Eddie Martinez said he couldn’t respond directly to the questions posed because he has been on the council just over one year but he provided some information about the council’s approach on its finances and commended council members on how they spend some of their campaign funds.
“My colleagues on the council have used their funds from their campaigns to support the annual holiday toy and turkey giveaway in the city as well as to support families and youth in need,” Martinez said. “The council does support a full state audit of the city finances, including contract awards.”
Despite emails and phone calls, representatives of Nationwide, LAN WAN Enterprise, Alvarez-Glasman & Colvin, North Star Land Care, CR&R and Prime Strategies (formerly Urban Associates), and All Done Management could not be reached for comment.
Jerry Brown, the general manager of Mr. C’s Towing, said the company has been doing business in the Southeast Los Angeles area for about 20 years so people have gotten to know the company and sometimes ask for its support when they decide to run for office.
“Council members…request campaign contributions on occasion and Mr. C’s, along with other business members in the community, contribute as the budget allows,” Brown wrote in an email. “Mr. C’s strives to be a valuable partner in the communities we serve and do all we can to improve the lives of the residents in those communities” by doing food distributions and other charitable work.
