Grand jury investigating city of Carson officials.

Federal prosecutors have begun issuing subpeonas in a grand jury investigation of alleged government corruption in Carson involving the bidding of city contracts, according to sources familiar with the case.

The grand jury investigation started about a month to six weeks ago, these sources said. The crux of the inquiry is not known, but most sources point to Mayor Daryl Sweeney and Mayor Pro Tem Raunda Frank, whose homes were raided on April 16 of Investigation and Internal Revenue Service.

During the past few months, federal investigators have been asking for documents from the city clerk and officials in development services, according to Carson City Clerk Helen Kawagoe. She said government officials directed her not to reveal which documents were provided to investigators.

Among the officials subpoenaed were Ann Marie Gallant, Carson's development services manager, Margarita Cruz, its redevelopment manager, and City Manager Jerry Groomes. Those subpoenas were first reported in the Daily Breeze.

Gallant and Cruz declined to comment about the subpoenas. Groomes did not return phone calls.

Sweeney, who took office in 2001, declined comment. One of his attorneys, Richard Steingard, declined comment on the investigation but said that the mayor had not been subpoenaed. Frank did not return phone calls. Spokespersons for the U.S. Attorney's office and the FBI in L.A. declined comment.

Sources said the investigation stems from the way city contracts were let.

There have been at least two civil complaints alleging corruption by city officials, the most recent stemming from a request for proposals on a multimillion-dollar waste management contract that went out in October 2001.

A claim filed last month with the city of Carson by one of the bidders, Si-Nor Inc., alleges that Sweeney, Frank, former City Councilman Manuel Ontal and Robert Pryce, an attorney, rigged the bid process so that Browning-Ferris Industries Inc. would gain the contract.

The claim, on file with the Carson City Clerk, alleges that other competitor's bids were passed along to BFI in order for it to improve its bid.

It also alleges that Sweeney and Pryce solicited bribes from Waste Management Inc. and BFI.

The bids came as the contract held by Waste Management was set to lapse. In a suit attached to the complaint filed with the city, Si-Nor said that when Waste Management refused to pay the alleged bribe, its contract was not renewed. Instead, the contract was awarded to BFI on Feb. 5, 2002, which was "the company who complied with the demands of the defendants, paying Pryce $1 million," the suit said.

The trash contract was later awarded to Waste Management by another city council vote.

John Newell, attorney for Waste Management, declined to comment about the investigation. A spokesman for Scottsdale, Ariz.-based Allied Waste Co., the parent company of BR, did not return calls. Peter Thorson, an attorney who represents the City of Carson, did not return calls.

Ontal resigned on April 17, one day after the FBI and IRS raided the homes of Sweeney and Frank, and left office on June 15.

"We've been told that he had been cooperating with the FBI for some months," said Rita Boggs, Carson's land commissioner. "He went off with the FBI, and we haven't seen him since."

Pryce and Ontal's attorney, Jose Lauchengco Jr., did not return calls, though Launchengco confirmed Ontal's cooperation with the FBI to the L.A. Times earlier this year.

"There has been a culture of corruption in that city in the awarding of contracts," Launchengco told the Times. "Manny Ontal got fed up with it and he wanted to put a stop to it, and he did."

Broader scope

The investigation into Carson corruption appears to involve more than the waste-hauling contract. "Every time someone wants to do something in Carson, it always has a price tag," a source said.

In June 2001, a partnership called Rand Pearlman Ventures LLC responded to an RFP from Carson for the development of a 93-acre mixed-use project at the intersection of the Harbor (110) and San Diego (405) freeways, according to a lawsuit filed by one of its principals in June.

The suit, filed in L.A. Superior Court by Richard Rand, was dismissed in July. In it, Rand claimed he was told by Sweeney that "in order for RPV to be selected as the developer for this project, (it) would have to hire Pryce..."

The cost of hiring Pryce, the suit said, included a $100,000 fee, a 6 percent share of all funds committed by Carson to the project and 10 percent equity stake in the development. The partnership declined to hire Pryce, according to the suit

Watson Land Co. won the bid to develop the site.

According to court records, Rand requested that the suit be dismissed, although Barry Ross, the attorney representing Rand Pearlman, could not say why the request was made.

"He dismissed the lawsuit, so I haven't had any involvement with my client," Ross said.

Saskia Asamura, an attorney listed on the suit as representing Carson, said, "I believe there was a question as to the nature of the legal entity, as to whether it existed and what it was:" There is no record of a Rand Pearlman Ventures on file with the Secretary of State's office.

Calls to Watson Land Co.'s president and chief executive, Richard Cannon, were not returned.

Watson Land, an industrial developer based in Carson, has 1.7 million square feet in available properties in Carson, as well as 116-acre Watson Corporate Center and Dominguez Technology Center, a 438-acre master-planned business center.

Carson is also home to a $120 million soccer complex built by Anschutz Entertainment Group, owner of the Staples Center that briefly spearheaded a proposal earlier this year to build a football stadium in downtown L.A.

The Carson soccer complex, still under construction on land at Cal State Dominguez Hills, will be home to the local professional soccer team, the Los Angeles Galaxy, as well as a training site for U.S. national soccer teams.

Michael Roth, spokesman for Anschutz, said he had no comment about the Carson investigation.

"We've been in contact with the city officials (of Carson)," Roth said. "Every city official has been involved in approving the project or filled in on the project so they would be aware."

He could not say whether Anschutz officials had been subpoenaed. "I'm not aware of any," he said. "I'm not telling you it hasn't happened, but nobody's brought it up to me."