By Michael Goldstein
By Dennis Romero
By Sarah Fenske
By Matthew Mullins
By Patrick Range McDonald
By LA Weekly
By Dennis Romero
By Simone Wilson
Graw, you may recall, is the former MTA construction executive who claims that, in part because he prepared the special panel of experts that rejected a certain dubious bid for a $65 million Eastside subway contract, he was fired out of hand in 1996. As we noted last week, that Metro East contract — 20 percent of which was to go to TELACU and Cordoba Corp., firms helmed by ancient Richard Alatorre cronies David Lizarraga and George Pla — was, Graw alleges, wired to a new $13,200 tile roof on Alatorre’s house in Eagle Rock. The roof, courtesy of TELACU, was invoiced a week after Graw was fired and days before MTA chief Joe Drew tried to toss out the Jacobs Management Associates bid that had been recommended by an independent MTA panel in favor of the Metro East bid backed by Alatorre.
But Graw contends that’s not the only reason he was deep-sixed. According to papers in the suit, he was also fired for acknowledging an even bigger, costlier problem. Graw had dared to talk at a public meeting about a two-year epidemic of more than 2,000 MTA contract change orders (a change order is a change in the contract that allots more money to the contractors for unexpected contingencies) that hadn’t been approved by the board.
Graw’s case, which seeks unspecified damages for unlawful firing and other counts, is to go to trial in June. This trial could shed more light on our transit authority’s dark, endemic chicanery than anything else in its shadowy history.
The court papers suggest that MTA is a system gone wrong on many levels. It is a system, for instance, where you can first fire someone for doing the right thing and then patch together a shoddy, defamatory rationale. Witness the firing of Graw.
Richard Brouwer, an MTA contract county counsel, tried to justify Graw’s firing after the fact in a handwritten memo entered into evidence. The memo said that Graw sometimes looked "disheveled" and had "stared at the breasts of a female" and "refus[ed] to make eye contact with [another] female while talking to her." Graw had also allegedly suggested that one man might advance his career better in another department — and that man happened to be black. We are talking major stuff, here.
The most interesting thing is that when MTA Inspector General Arthur Sinai, who is looking into the case, subpoenaed Graw’s personnel file, Sinai’s staff noted that "it contained no disciplinary documents such as counseling documents or letters of reprimand." Nor any of Brouwer’s allegations.
But there was one genuine incident on Brouwer’s hit list — even if Brouwer falsely represented it. Two weeks before his firing, Graw spoke out on the change-order problem, the extent of which the MTA staff had apparently concealed from the board. At a "September  1996 board meeting, [Graw] appeared totally unprepared and made statements that were not factually true," Brouwer scribbled.
But Graw’s fateful utterance that day was absolutely factual, and Graw was, if anything, too well prepared. Graw spoke openly of a problem the MTA was trying to deny: Construction contracts were being augmented by tens of millions of dollars without MTA-board authorization. The MTA’s own consultant, Arthur Anderson, and an in-house staffer had in fact just made this finding. But the MTA staff was afraid to admit it to the board, presumably because the problem benefited so many well-connected MTA contractors.
Let’s take just a moment with this one. While the Alatorre roofing deal that the suit alleges was done in return for a $65 million Metro East contract was singularly rancid, chronic undocumented contract change orders may have cost the MTA even more over a far longer period. The MTA staff had the figures on how bad the problem was — but guess what? At that September 11 meeting, only Graw dared to tell the board.
It’s easy to see why: According to an in-house July ’96 audit, there had been 2,152 construction change orders between May of 1994 and July of 1996. All of these were supposedly for emergency-type cost upgrades, but in fact, the audit noted, most "were issued after 30 days," meaning that there was plenty of time for the MTA board to approve them. But it seldom got the chance. Meanwhile, tens of millions of dollars annually oozed out of the MTA into contractors’ pockets.
At this meeting, Graw was actually asked by another MTA staffer, Joel Sandberg, to explain the problem after then–MTA board member Nick Patsaouras demanded incisive answers. Graw explained the idea of "incrementalization." To get around a rule that all change orders over $200,000 had to be approved by the board, big cost hikes were broken down into under-$200,000 "increments" and slipped through, one at a time. This, Graw stated, "to a point where the change builds up to a very large dollar value." Thus, according to other testimony before the board that day, 175 "incrementalized" change orders resulted in nearly $15 million worth of extra charges (and that doesn’t account for the other 1,900 change orders). Graw called this "an inordinate number" of change orders.
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