$250-Million South-Central Project : Stakes Are High in Battle for L.A.’s Lancer Contract

David Sokol prefers mid-town Manhattan, where he runs Ogden-Martin Corp. from an office high above Park Avenue. But to do business in Los Angeles, he has learned, it helps to make respectful visits in City Hall and buy tickets to fund-raising events held by key members of the City Council.

And Sokol, the firm’s president, dearly wants to do business here.

His company is competing for the honor of building and running the city’s Lancer project, the trash-to-energy incinerator proposed for South-Central Los Angeles. Whoever is selected by the council later this spring, either Ogden-Martin or Signal Environmental Systems of Hampton, N.H., will win a 20-year contract worth at least $250 million and bragging rights to a showcase plant in the nation’s second largest city.

The battle between Ogden-Martin and Signal set off the most intense lobbying campaign since competition for the cable television franchise in the East San Fernando Valley three years ago and involves the leading heavyweights representing clients in the private offices at City Hall. The lobbying has dwarfed the resolute, but meager, efforts of some mostly poor black and Latino neighbors to keep the trash-burning plant out of their backyard.

“It’s all politics--politics and money,” said Sheila Cannon, a neighbor who fears that the plant’s smokestack emissions will irritate her children’s asthma. She and about 50 other South-Central residents have met every Saturday for several months at a Central Avenue library to plot their fight against the plant.

They contend that the city kept them in the dark until last fall, when the first of three community meetings was called by Councilman Gilbert Lindsay, the 85-year-old patriarch of South-Central. By then, planning had gone on for several years and more than $1 million had been spent on the project. “Some of the elderly people around here, they think Lancer is a shopping center!” Cannon complained.

When the bidding began, Sokol said Ogden-Martin wanted to avoid the political back-scratching that some believe colors many decisions in City Hall. “We want to win this on the merits or not at all,” Sokol said then.

Stakes Are High

But Sokol soon entered the high-stakes game by reserving three tables, for $9,000, at a fund-raising dinner for Lindsay’s new political action committee. Donations were allowed to exceed the $500 limit imposed by a recent city referendum because the money raised by the new committee, called LINPAC, was not to be used for city political races, according to a city attorney’s opinion.

Sokol said Ogden-Martin also contributed $2,500 each to council members David Cunningham and Joan Milke Flores, and Sokol recently attended a reception for Councilman Robert Farrell given in New York by the brokerage firm of Smith Barney, Harris Upham & Co.

Rival Signal has not been far behind. The firm reports that it gave $3,000 to Lindsay and $500 to Councilman Michael Woo, and Signal’s president, Alfred del Bello, also contributed $250 to attend a Manhattan fund-raiser held by Smith Barney for a fund, the Teresa Lindsay Foundation, that Lindsay named after his late wife. In addition, lobbyists for both firms may have made other contributions, which they are not required to report until June.

Led by Attorney

Ogden-Martin’s team working City Hall is led by attorney Neil Papiano and includes former City Councilman Arthur K. Snyder and lobbyists from the law firm of former Democratic Party National Chairman Charles Manatt.

These Ogden-Martin forces began an investigation that turned up connections between Signal and businesses in South Africa. Johnnie L. Cochran Jr., president of the Los Angeles Airport Commission, won a coup for Ogden-Martin by using the reports to persuade local civil rights leaders--including Urban League President John Mack and NAACP President Raymond Johnson Jr.--to attack the opposition on the eve of a key committee meeting.

Signal has recruited a high-powered force of its own that began by hosting a dinner in Seattle for council members who attended the National League of Cities convention last December. The team includes lobbyists Joseph Cerrell and Philip Krakover, who have had their hands full denying allegations that the firm has South African business connections.

Limited Relationship

Signal’s officers contend that the relationship is limited to sales to South African firms of products made by other subsidiaries of Allied-Signal Co., the parent firm of Signal Environmental Systems. However, the denials were weakened by a recent Allied-Signal in-house magazine that carried a map pinpointing the company’s worldwide business locations--including South Africa.

But Signal won a victory last month when it complained bitterly that the city’s process of evaluating bids had been tainted, charges that forced city officials reluctantly to reopen the bidding.

According to several City Hall sources, the Signal maneuver came in the nick of time. A technical committee that analyzed both firms had been prepared to recommend that Ogden-Martin be selected. Ogden-Martin, a subsidiary of the New York-based Ogden Corp., offered a better financial package because it was able to guarantee that its plant would generate more electricity for sale, the sources said.

Company Had an Edge

But Signal’s top officers complained that Ogden-Martin had an edge because it obtained documents Signal filed with the city in confidence. “I think (Los Angeles Mayor) Tom Bradley would be very upset if he knew what was going on in his city,” said Del Bello, the former lieutenant governor of New York.

Both firms were given until March 14 to refile their best offers with the city for a new staff analysis. But the real battle will begin when the staff’s final recommendation goes to Lindsay’s Public Works Committee.

Lindsay’s position is likely to hold much sway with the City Council, since he is the project’s strongest proponent and the plant is going in his district. The full council, however, will make the final choice and has already shown an independent streak by overriding the staff’s selection of a bond underwriter after heavy lobbying by financial institutions.

Benefits for District

Lindsay’s chief aide, Robert Gay, said the final selection of a company to build the Lancer project would be influenced by the benefits that the companies promise to Lindsay’s 9th Council District. There are lucrative construction subcontracts to be awarded and long-term deals for plant maintenance and hauling that Lindsay would like to see go to minorities. Ogden-Martin has already pledged to Lindsay that it will spend $250,000 on job training for local minorities during plant construction, Gay said.

“If both companies are equal, the question then is, ‘What can you get from them, what are they willing to do for your district?’ ” Gay said. “Gil Lindsay has a one-time shot on this in his district and he intends to get whatever he can for the community.”

The benefits include a $10-million “betterment fund” for the 9th District created with part of the city’s $235 million in bonds sold to finance the project. Gay said the money will be used first to improve the Teresa Lindsay multipurpose community center. The remainder will go to low-income home loans and a variety of other projects and might even be used to help needy groups in other council districts. “I see no reason why we shouldn’t do that,” Gay said.

Help Would Be Welcome

Any help would be welcome, since the plant is scheduled to go into one of the poorest areas of the city and won’t bring in many jobs. These high-tech plants are computerized and only employ about 50 workers despite being open around the clock.

But some wonder whether the $10-million grant--$3 million paid at first and $750,000 in each of 10 years--will truly help the neighborhoods around the plant, which would be bounded by Long Beach Avenue, 41st Street, Alameda Street and Martin Luther King Boulevard. Most of the area is industrial, but the plant would force the relocation of the Gospel Temple Missionary Baptist Church and a handful of residents.

“There’s been a lot of programs (that have) put money in the 9th District,” Sheila Cannon said. “If it hasn’t done any good in all these many years, why should it do anything now just because we have a trash plant?”