Ted Stein is gone, but that doesn’t mean much. He’s been gone before, and it never stuck. It probably won’t stick this time either.
In City Hall, Mayor Jim Hahn’s people don’t know whether to breathe a sigh of relief or wring their hands in anguish, knowing that the guy is finally out of there. That’s because Stein, the Encino developer who stepped down from the city Airport Commission earlier this month amid two criminal probes of airport contracting practices, was really good at his unpaid commission task — to drive the mayor’s agenda at the airport and, by the way, get his boss re-elected. But he threw his weight around too much and, not for the first time, got himself and the mayor in trouble.
Trouble was inevitable. Not just because of who Stein is, although his combative and confrontational style added a certain spice to the story of his several downfalls. Trouble was inevitable because of what Los Angeles International Airport is: a billion-dollar pot of gold that perpetually entices city leaders in desperate need of funds. “We own it,” one mayor after another has figured. “We should be able to make it pay.” But the pot always recedes, just out of reach. The city ends up paying. The airport never pays.
Stein was an ambitious Valley real estate developer who was appointed by Tom Bradley to the city Planning Commission and then, on Richard Riordan’s election, scored a place on the new mayor’s transition team. He soon became Riordan’s special adviser and Airport Commission president. His primary task: grab that pot of gold by raising the landing fees that airliners pay and get hold of some $31.5 million that was mistakenly sent to the airport’s fund. Then move all that cash over to the city’s general fund, where it could balance the budget and pay to expand the Police Department.
As for the landing fees, which actually were jacked up under Bradley, Stein hired a bevy of lawyers to combat the suit brought by angry airliners and prepared for a monumental fight. But that $31.5 million seemed like simpler quarry. The city was supposed to get it way back in the 1980s in exchange for a chunk of land the state grabbed to complete the Century Freeway. But wouldn’t you know it — some bureaucratic goof in City Hall put the cash in the airport’s fund, not the city’s general fund, so Riordan couldn’t put it to use.
Now, the city owns the airport, but the federal government regulates it and has to sign off on any transfer out of the airport’s fund. And the airliners’ lobbyists, who were in tight with the feds, were still peeved about the attempt to up the landing fees, so approval from the Federal Aviation Administration wasn’t exactly zooming through. So the money sat there, gaining interest, reaching $58 million, but remained untouchable.
What could make more sense, Stein thought, than hiring someone with ties to the Clinton administration to knock some heads in Washington and move things along?
This was the beginning of Stein downfall number one. Stein hired a former high-ranking attorney from Janet Reno’s Justice Department by the name of Webster Hubbell. You may know the rest. Stein figured he was the mayor’s guy doing the mayor’s work and could hire Hubbell without making a big public deal about it. Here’s a key point: He didn’t mention Hubbell to the mayor. But he did run it by Bill Wardlaw, the investment banker who guided Riordan to election and continued to serve the mayor as a key adviser.
Hubbell, it turns out, badly needed the money from his Los Angeles contract to pay some bills because he was having a little legal trouble. He was under investigation for fraud in connection with the Whitewater scandal, the probe of Hillary Clinton’s Arkansas law firm that later morphed into Kenneth Starr’s investigation of the president, Monica Lewinsky, impeachment, all of that. Los Angeles got its $58 million but apparently not because of any effort by Hubbell, who had pleaded guilty and was already in prison when airport bureaucrats tried to push through his payment vouchers. Instead of paying, City Controller Rick Tuttle launched an investigation.
Meanwhile, Stein helped Riordan craft an astounding policy at the airport. The only reason the city can’t move its airport revenues to the general fund seemed to be that federal rules prevented it. But the federal rules applied only if the city took federal airport money, so Los Angeles became the only major city in the nation to turn up its nose at federal airport money.
By then, Stein had left the Airport Commission and was challenging City Attorney Hahn for re-election. Riordan backed his guy against Hahn, but Stein was badly beaten. Months later, Tuttle issued a scathing report on the Hubbell affair, but the City Council refused to consider it up until Riordan took a political risk and, some would say out of loyalty, moved to rehabilitate Stein with an appointment to the Harbor Commission. The council, filled with people who ended up in office due in part to tireless Stein fund-raising, let the whole Hubbell issue drop after passing a motion to require city commissioners to undergo ethics training. Of course, such training was already mandatory. Stein was back.
Now comes Stein downfall number two. It was Bill Wardlaw who brought Stein to Riordan, and whom Stein checked in with on (at least) the Hubbell matter. No doubt here who was really in charge. But Wardlaw and Riordan broke over who the next mayor was going to be. Riordan wanted Steve Soboroff, while Wardlaw, who many people believe runs Los Angeles, for whatever reason picked Jim Hahn. Stein knew which side his bread was buttered on. He went with Wardlaw. An angry Riordan bounced his ungrateful commissioner from the harbor panel, but no matter. Stein suddenly was reborn as a Hahn man.
Riordan, whose biggest initiatives were growing the LAPD and expanding LAX while getting it out from under the thumb of the federal government, ended his tenure with the LAPD under federal oversight and his $12 billion airport expansion grounded by outraged community leaders and environmentalists.
In 2001, Hahn was elected mayor with the fund-raising help of Ted Stein ($3,500 of his own, $3,000 from his wife, Public Works Commissioner Ellen Stein, plus thousands upon thousands raised from other donors). His reward? Hahn put him back on the Airport Commission. But times had changed. The terror attacks of September 11 meant federal money was needed for airport security. Stein’s new task was to undo what he had done before, make clear that the city wanted federal money, and promise that Los Angeles would never again try to divert airport revenue to the general fund. With travel down and airlines going bankrupt, landing fees would have to be lowered. So much for the pot of gold. The city pays. The airport never pays.
Hahn also had to fight Valley secession, and Stein was up to the task, raising thousands for the anti-cityhood effort. Then Controller Laura Chick began checking into allegations that Stein, and Hahn fund-raiser turned Deputy Mayor Troy Edwards, strong-armed airport-contract bidders into forking over money for anti-secession and for Hahn’s re-election campaign. Stein downfall number three.
Now, with Stein gone, Hahn still has an airport problem. His $9 billion LAX master plan is under attack and likely won’t make it intact to the slated September vote. The City Council turned on him, banning city commissioners from political fund-raising. The prohibition took effect Sunday.
Last week, it was standing room only as a seemingly endless crowd of appointed commissioners crammed into a City Hall meeting room to be briefed on the new fund-raising ban. Just kidding. Of the city’s approximately 275 commissioners, only 10 actually showed up for the first of three briefings. No commissioners have given up their posts, and none have vowed to refrain from politicking. Commissioners, like Stein, are there for the love of the game, and fund-raising is part of the game.
If allegations against Stein stick, don’t expect them to stick to Hahn as well. Given Stein’s track record with the Hubbell contract, Hahn could plausibly maintain that he was out of the loop. And if nothing against Stein sticks, will he be back? Could be. The airport still beckons. In the meantime, his ties to Hahn aren’t exactly severed. Ellen Stein still serves on the Board of Public Works. Their daughter, Jennifer Stein, is a Hahn staffer. And now that he’s off the commission, he can openly raise funds. And probe or no probe, nobody raises campaign funds like Ted Stein.