Firms Did Work on Home of O.C. Water Official

SAN DIEGO — Two major contractors for the Santa Margarita Water District performed thousands of dollars’ worth of landscaping and home improvement work for the district’s assistant general manager, who is under investigation for possible conflict-of-interest law violations.

An attorney for Michael P. Lord, the assistant manager, said Thursday that the contractors had been paid for all but $100 of the $3,350 that Lord has been billed for the improvements so far. He said that Lord paid full value for what was done. But the lawyer said he did not know the total value of the construction.

Documents reviewed by The Times show that the companies have been heavily involved for almost three years in home improvements worth at least $22,214. One firm obtained building and grading permits and drew up plans for the installation of twin fireplaces, French doors and a lattice fence at Lord’s San Diego County home in Vista.

Most of the detailed architectural planning was done by Robert Bein, William Frost & Associates, an Irvine civil engineering firm that has given Lord and the district’s general manager, W.W. (Bill) Knitz, nearly $14,000 in gifts since 1987, and has received more than $13 million in consulting contracts over the past four years.

After The Times disclosed the gifts in an article earlier this week, Lord and Knitz came under investigation by the Orange County district attorney’s office, which is attempting to determine whether the men violated conflict-of-interest laws by recommending contracts after they had received gifts in excess of state-mandated limits.

Irvine Consulting Group, which did soils testing at the request of Robert Bein, has given Knitz $800 in meals and theater tickets over the past four years but nothing to Lord. The company has received $376,840 worth of work the past four years.

As a subcontractor to Robert Bein, William Frost & Associates, which generally identifies itself as RBF, it is unclear whether ICG company officials knew they were doing work for the Santa Margarita Water District executive. Attempts to reach ICG officials Thursday night were unsuccessful.

In a written statement to The Times on Thursday, Bein, the company’s chief executive officer, said the engineering firm had done nothing improper.

“I assure you that the project was, and is still being completed on a regular businesslike basis,” he wrote. “A contract was agreed upon, the work was accomplished, invoices were sent as the work was completed and payment from Mr. Lord was recorded by RBF.”

Bein said the project is still underway because the county of San Diego has not given final approval for grading, and Lord is still receiving bills.

A Laguna Hills attorney who is representing Lord during the district attorney’s investigation said Lord hired Robert Bein because he “trusts their work” and the company has a San Diego County office.

“It is our opinion that there is nothing improper about Mr. Lord hiring RBF as he fully paid them for their work and did not receive any discount from them,” attorney Gary M. Pohlson said.

When asked if he could verify that Lord paid for the work, Pohlson provided several documents, but only two canceled checks totaling $450. He said another check for $2,500 was more difficult to produce immediately, but that it did exist. The remaining $400 payment can also eventually be demonstrated, he said.

When pressed about exactly what work was performed by RBF, Pohlson was vague except to say that the firm provided a “grading and concept plan,” which included drawings for landscaping and fees for obtaining building permits.

“Mr. Lord did most of the work himself, because he was putting in a driveway and other things,” Pohlson said. “He hired some workers, some day laborers to help him but (RBF) did nothing but provide the plans.”

Building and grading permits on file in San Diego County reveal that RBF was involved to some unspecified degree in improvements to Lord’s home that were estimated to cost at least $22,214--and possibly much more.

The biggest single project involved a “rear yard extension” to Lord’s residence, which required trucking in 1,300 cubic yards of fill dirt--enough to fill from 65 to 100 dump trucks--that was placed behind an apron built to keep the fill dirt from sliding into a nearby ravine.

The plans for this landscaping and grading project were drawn by William S. Shaw, a civil engineer employed by RBF, which also arranged for a “hydrology study” to be conducted and sub-contracted with ICG for a lengthy and detailed “geotechnical investigation” that involved “a site reconnaissance by a geologist” and extensive soil sampling and laboratory tests.

An estimate prepared by M. Wilkinson, another RBF employee, said that the materials that would be required for the rear yard extension would cost $12,542. Nowhere in the file was there an estimate for the actual cost of the work, which got underway in May, 1990, and is still unfinished, according to Robert Bein.

One of Lord’s neighbors, a professional draftsman who asked that he not be identified by name, said most of the heavy work was accomplished that summer and involved bulldozers and other heavy earthmoving equipment that was on site for more than three months. He said the soil was compacted enough to allow construction of a free-standing building on the extension.

Inspection reports indicate that inspectors from the San Diego County Public Works Department made regular visits to the site between May and September, once levying a $500 fine for illegal grading. The permit fees alone on this project totaled $1,225.

About 17 months after RBF drew up plans for the rear yard extension, John Andrews, another RBF employee, listed himself as the person that building inspectors should contact if they had any questions about another home improvement project--the installation of two additional fireplaces and chimneys to Lord’s home, and replacing some of the existing millwork with three French doors.

Plans for this project were submitted on drawing paper bearing the distinctive RBF logo, and were signed by an RBF engineer. Lord indicated on the permit application that he would be his own general contractor and would either perform the work himself or have it done by laborers he would personally employ.

Yet another project involved the construction of an eight-foot-high lattice fence at Lord’s residence. Again, the plans were drawn on RBF drafting paper, and bore the signature of S. Robert Kallenbaugh, president of the giant consulting and engineering firm. The fence was estimated to cost $1,200 and the permit fees amounted to $68.06.

Although the receipts for the permits do not reveal who actually paid the permit fees, documents provided by Lord’s attorney show that RBF would pay on Lord’s behalf and bill him later.

All of the permits for improvements to the actual residence indicated that Lord would do the work himself, or hire laborers to do it.

There was nothing in any of the files to indicate who did the major grading and filling project involving the earthmoving equipment and scores of dump trucks loaded with rock and dirt.

Lord lives in a sprawling, ranch-style house in an unincorporated section adjoining Vista in San Diego County. The neighborhood includes modern homes on half-acre or larger lots in a rural setting.

French doors on Lord’s house lead into a front yard that has been carefully landscaped--its main feature is a circular rose trellis. In the driveway is a fishing boat covered with a tarp.

Behind the house is the large area where the major landscaping and grading project occurred. Two small fountains spout water several feet into the air.

Property records show that Lord’s four-bedroom, two-bath house was built in 1986 on a 37,461-square-foot lot. The home itself is 3,387 square feet and is valued at nearly $400,000.

RBF’s work for Lord would not be considered a gift--or a potential conflict of interest--if he paid fair market value for everything that was done. But if RBF gave him even the slightest discount, the work would then be considered a gift, according to legal experts.

“If you are paying for the service and you are paying just as much as your neighbor is paying for the same service, then that’s OK,” said Ruth Holton, executive director of California Common Cause, a Sacramento-based citizens watchdog group. But any amount, even a $1 discount, would be considered a gift.

If a public official fails to pay the full value of work performed, he is required to abstain from influencing all decisions pertaining to the gift-giver within one year of accepting any gift worth more than $250, in order to avoid violating state conflict-of-interest codes.

Legal experts said that a simple recommendation to a governing board on a matter relating to a gift-giver could constitute a violation.

“Just talking in the board meeting is considered participation,” said Chip Nielsen, a San Francisco political law attorney.

What’s more, public officials are required to report the value of the gifts they receive along with a description of the goods or services given. Failing to report those gifts is another violation of state law.

Lord has long been a member of the district’s finance committee, through which payments for all services and contracts are routed for approval.

Lord has not listed any home improvement work or site planning by RBF on any of his economic interest statements filed in accordance with state law.

If a public official receives gifts and does not report them, then each passing year without the required disclosure would constitute another violation, Holton said.

“If (something requiring disclosure) happened during two reporting periods and you didn’t report it in either, it would be two violations,” Holton said.

RBF is not required to report the gifts it has provided to Knitz or Lord. And the gifts themselves are perfectly legal unless they were given for the express purpose of getting a particular contract, legal experts said.

If a public official fails to report a gift, he or she can be convicted of a misdemeanor and forced to pay substantial fines--either $10,000 or three times the value of the gift, whichever is greater.

The Fair Political Practices Commission, which is responsible for enforcement of the conflict statutes, can order $2,000 in fines per violation.

Participating in a governmental decision--after you have received a gift of $250 or more--triggers the same kinds of penalties.

In his written response, Robert Bein said gifts made to Knitz and Lord “were not attempts to influence contract awards, but were instead normal business-arrangement lunches, dinners and off-site retreats.”

“In answer to your question,” Bein wrote, “we never felt compelled to make gifts and none were ever demanded.”

Times staff writer Mark Landsbaum to this report.