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Whitewater West gets public airing 

Wednesday, Aug 5 1998
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Fully four years after the scheme was hatched and more than a year after the city controller released a damning report on the affair, the Riordan-administration scandal dubbed "Whitewater West" finally got a public airing last week at a hearing before the City Council's Commerce, Energy and Natural Resources Committee. But the loudest noise coming from the hearing room was the sound of some of the city's heaviest hitters sweeping the whole imbroglio back under the rug.

"Whitewater West" centered on the city's secret hiring of Clinton crony Webster Hubbell for a no-show consulting contract with the Airport Commission, and the attempted cover-up by city staff.

City Controller Rick Tuttle and former Deputy U.S. Attorney Stephen Madison, the independent counsel hired to investigate the matter, recapped the sordid details of the affair at the hearing: how, in 1993, then-newly-elected Mayor Riordan sought Clinton-administration approval to transfer $58 million from the airport to pay for the mayor's campaign promise of putting 3,000 new cops on the street; how, in the spring of 1994, Theodore O. Stein, president of the Airport Commission and a "special advisor" to the mayor, secretly hired Webb Hubbell, then only weeks away from indictment; how Hubbell submitted bogus invoices (some from jail) to the city for lobbying work he never performed; and how airport General Manager John Driscoll helped Stein cover his tracks by backdating billing records and deflecting inquiries from the City Controller's office.

Beyond detailing the particulars of the Hubbell hiring, Tuttle's report remains the definitive exegesis on how business gets done in the Riordan administration: namely, in back rooms, through a cabal of "unpaid advisors" and well-connected attorneys, and with minimal public oversight.

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This was not a message that committee members John Ferraro and Rudy Svorinich were happy to receive last week, and they launched into an attack on the controller's motives. "It's been 367 days since the report was released," Svorinich said, in full dander. "Why then are we discussing it now?" Ferraro, no less antagonistic, suggested the hearing had been timed to smear the mayor's men: Stein, whose new appointment as Harbor Commission president is pending before the same committee, and Driscoll, who has clashed with Councilwoman Ruth Galanter over the issue of airport expansion, which the councilwoman opposes. "There is nothing vindictive about this?" Ferraro demanded. "You are not trying to embarrass anyone by this?"

In fact, it was Ferraro himself who blocked a previous Galanter hearing on the matter last December, when he was reportedly concerned that an airing would have interfered with a personnel review at which Ferraro and Riordan deputy Kelly Martin approved a $22,000 raise for Jack Driscoll, boosting his salary to $188,000.

Stein, who has maintained a low profile since losing badly last year in his bid to unseat City Attorney Jim Hahn, didn't bother to attend the hearing, dispatching in his stead power attorney Neil Papiano, who has represented such City Hall insiders as councilmen Richard Alatorre and Hal Bernson in their brushes with ethical laxity.

Roundly characterizing the report as "inaccurate and misleading," Papiano proclaimed that Stein was being made a "scapegoat" for the city's involvement with Hubbell. Even more curious was Papiano's reasoning that the payoff to Hubbell was money well spent, in light of the Clinton administration's subsequent approval of Riordan's funds-transfer scheme. "The performance here was the transfer of $58 million to the city's general fund," Papiano wrote in a letter to the committee. "Mission accomplished! Result outstanding!" Behind Papiano's bombast is the more serious point that the payoff to Hubbell - legal or not - was the price of doing business with the Clinton administration, a price the mayor's men were all too happy to pay.

That point was lost on Steve Madison, the well-respected former prosecutor who led the investigation. "What you are arguing for," Madison said coolly, "is the ends justifying the means." If Papiano had any response to that charge, he kept it to himself.

In the end, the committee agreed to forward a number of the controller's recommendations - including special training for city commissioners and staff on their responsibilities and limits of their authority - to the full council for approval. It is less clear whether they will follow Tuttle's advice on Stein's pending appointment to the powerful Harbor Commission, scheduled to be heard by the committee later this month.

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