By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
She knew Shambra both professionally and personally, having previously traveled with Shambra and his wife, but Hanson refused to discuss her personal life. "On to the next question," she said.
Shambra himself said, "She was single; I became single. And we dated. It's no different than two people meeting in any business. It's not a conflict of interest unless you're married."
In Hanson's account, Shambra's office contacted her not long after she began private consulting work. In fact, she joined Shambra's Belmont team in September 1994, less than two weeks after leaving her $60,000-a-year state job. At Belmont, her assigned tasks included making sure the new high school had the required square footage, laboratories and high-tech hookups. She also researched grants for computer labs, participated in staff presentations and met with community and Belmont High faculty to plan the school's career-track curriculum.
Of all the consultants working under Shambra, Hanson in particular filled a slot that duplicated functions for which LAUSD already had full-time staff. Hanson said she was selected because Shambra wanted a person who combined curricular and school-design expertise. Besides, said a source inside Shambra's office, "Belmont is a unique project, outside the normal paradigm."
Shambra discovered the probe's interest in the Hanson relationship during a January interview with a Wildman researcher, and immediately went ballistic. "This is a witch-hunt under the guise of legislative authority," said Shambra, recalling the encounter in a later interview. "It's intimidation and harassment and more of this 'Let's see what we can find that's wrong' bullshit.
"I think it's an invasion of privacy," he added, "and I feel very badly for her."
The first major Belmont controversy to erupt over improper business ties was also the first to result in litigation - an irony of sorts, as it involved the district's consulting attorney. The flap began in September 1995, just as school-board members were poised to pick the Kajima team. A lawyer from Orange County pointed out, in a public meeting, that O'Melveny & Myers counted both the school district and Kajima among its major clients. It was this conflict of interest that was cited by state senators Tom Hayden and Richard G. Polanco as one reason that a legislative inquiry was necessary.
In the selection process leading up to choosing Kajima, two O'Melveny attorneys played a central role in a final review panel that also included Wedin and financial analysts; all favored Kajima despite a projected price tag of $99 million - the two competing bids came in at $59 million and $68 million. Officials defend their choice on grounds that the Belmont competition was not about getting the lowest price, but a "trendsetting" effort to choose the "design-build" team that could best carry the project forward from beginning to end.
While O'Melveny lawyers did not represent Kajima before the school district, Kajima was a $10 million O'Melveny client from 1988 through 1995. In addition, the law firm had recently negotiated a similar contract on behalf of Kajima to build the Long Beach aquarium.
In the end, a school-board majority decided that it trusted O'Melveny attorneys David Cartwright and Lisa Gooden, and the board voted to waive the conflict, which insulated the law firm against a malpractice claim. (Gooden has since joined the district's legal staff, working mainly out of Shambra's department.)
One of the losing development teams was not so sanguine. Developer Robert Hirsch, part of the Goldrich Kest team, has said he would have reconsidered entering the Belmont competition had he known about the O'Melveny connection. Chris Campbell, a team partner, has gone even further, filing a lawsuit against the school district last week for damages. Campbell already has sued unsuccessfully to get the school system to release certain documents pertaining to the O'Melveny conflict - documents now also sought by Wildman.
One of the key unreleased papers is a letter from Cartwright to LAUSD counsel Mason on April 6, 1995, at least a year after Kajima emerged as a potential bidder. According to a district correspondence log, the April letter is the earliest record of Cartwright noting his firm's ties to Kajima. By that time the competition to land the Belmont contract was nearly over: Of the initial six competing teams of bidders, only three remained, and they had already submitted their packages - for Cartwright to review.
In an interview, Cartwright insisted that he informed Mason orally of O'Melveny's conflict in the fall of 1994, months before the April letter. It would therefore be wrong, he added, to infer that the school district was getting late notice of the issue. As for the competing bidders, Cartwright said he told them only that there were conflict issues among the bidders that had to be resolved. "I have no duty to disclose to them," he said. "Under no circumstances would I go into detailed disclosures to bidders. The bidders are not my clients."
In the end, the district pursued a bidding process whose subjectivity left it completely open to allegations of bid-rigging, especially given the participants. Besides the conflicted O'Melveny attorneys, there was Wedin, who gets paid only if projects like the Belmont complex are pursued, and there were the Ernst & Young financial analysts, who replaced a firm that was fired, in part, for not being gungho enough about the project. And then there was Shambra himself, a determined empire builder undermined by his own lack of experience outside academia, and all too willing to defer to his freewheeling consultants.