AUDIT: FIRM OVERBILLED TAXPAYERS.

Byline: Mark Katches Daily News Staff Writer

A politically well-connected Los Angeles marketing firm handling the state's ride-sharing program overbilled taxpayers by $644,365 - money spent on political fund-raisers, executive bonuses, football games and other entertainment costs, an independent audit shows.

``The stench from this is overwhelming,'' said Sen. Quentin Kopp, the chairman of the Senate Transportation Committee.

``This thing ought to be turned over to the Fair Political Practices Commission,'' said Kopp, I-San Francisco. ``Ordinarily, I'd turn it over to the attorney general, but you can't on this. I may refer it to the Sacramento County District Attorney's Office. This whole thing is appalling.''

Pacific West Communications charged the California Department of Transportation $5,934 for a fund-raiser honoring Attorney General Dan Lungren, $318,000 in employee salaries, $770 for tickets to Raiders games and tickets to a Harry Connick Jr. concert, $4,518 for an anniversary party, and $4,000 for a New Year's Eve Party.

Other costs found by auditors at KPMG Peat Marwick included $1,451 for alcoholic beverages, $1,826 for a Lake Tahoe trip and ski-lift tickets, $670 for golf merchandise and golf dues and $635 for renting gambling equipment.

The company overcharged $109,000 for entertainment and meals, $46,300 for travel costs, and $46,782 for office supplies, according to the audit.

The overspending was found during a routine audit of overhead expenses claimed by the company during its two contracts with Caltrans worth about $12 million. The company was hired in 1991 to create a marketing strategy to promote alternative modes of transportation.

``Try to explain to people who go to work every day and pay taxes that they should be paying somebody's golf dues, bar bills and trips to Lake Tahoe and L.A. Raiders tickets,'' Caltrans spokesman Jim Drago said. ``Those costs should not be borne by the taxpayers.''

Pacific West's President Stephen Tobia Jr. said he has agreed to pay half of the charges, including the entertainment costs and travel expenses, calling them ``nickel and dime stuff.''

But Tobia said he is disputing more than $300,000 of the audit's findings.

``I haven't done anything that is illegal or unethical,'' Tobia said.

Tobia acknowledged, however, that some mistakes were made by his firm - including the 1994 Lungren fund-raiser held at a friend's home.

``That shouldn't have been part of the overhead, and we have no problem taking that out,'' he said.

Lungren's communications director Dave Puglia said the attorney general was unaware of the audit.

``We're still trying to figure this out,'' Puglia said.

The company's lists of clients have included Lungren, who is planning to run for governor in 1998. He hired Pacific West to handle media, but Lungren dropped the firm two months ago.

The firm's top executives include a number of well-connected political operatives. Gov. Pete Wilson's former communications director Dan Schnur is a consultant and former senior vice president. Richard Davis, who worked for Gov. George Deukmejian, was the firm's executive vice president during the term of the contracts.

Jim Dantona, a Democrat who ran for a San Fernando Valley Assembly seat, is a senior vice president and Peter Kelly, the former chairman of the state Democratic Party, is an associate.

In addition to Lungren, Tobia has helped raise funds for former Los Angeles Mayor Tom Bradley.

Tobia noted that his firm has provided its services for a fraction of the costs Caltrans has spent in the past on ride-sharing programs.

But statewide, the contracts have made little difference in driving patterns.