OVERSIGHT PANEL MAY DO OWN PROBE; BB CHAIRMAN WANTS TO INVESTIGATE FIRM FINED BY STATE.

Byline: David Bloom Daily News Staff Writer

The committee overseeing a $2.4 billion school bond should do its own investigation of whether to fire a construction management firm fined $40,000 this week for a predecessor's laundering of campaign contributions, said the committee chairman on Sunday.

``I think it's just a good system of checks and balances,'' said Steve Soboroff of the Proposition BB citizens oversight committee. ``I think we should look at it carefully, quickly, thoroughly.''

The Los Angeles Unified School District also must devise a contingency plan to avoid any construction delays if it does fire O'Brien-Kreitzberg Inc., Soboroff said in a letter faxed to committee members Sunday.

``The main thing is for (LAUSD Superintendent) Ruben (Zacarias) to prepare a contingency plan, so we don't miss a beat,'' Soboroff said. ``Come rain or shine, the mail's going to show up and we're going to build these projects, period.''

O'Brien-Kreitzberg Inc. officials have said the Fair Political Practices Commission fine was for an administrative law decision based on improper acts by a different company, which was reorganized to the current one after new managers took it over.

Though many of the employees involved still work for O'Brien-Kreitzberg Inc., or OKI, company executives have protested that they shouldn't be held accountable for the previous company's bad decisions.

Zacarias already has ordered a district investigation, but Soboroff said the oversight committee should do its own review, using its own staff attorneys.

The committee also should consider getting its own inspector general, with subpoena and investigative powers much like those of inspectors general with the Los Angeles Police Department and the Metropolitan Transportation Authority, Soboroff said.

``I just think we need some special attention for a couple of years, some special focus,'' Soboroff said. ``If we ever want to do another one of these (huge bond issues), we have to do this one right.''

OKI was hired July 24 to serve as program manager overseeing 10,800 construction projects at 900 LAUSD schools over the next several years for the district.

But the company didn't reveal that the state FPPC was investigating its corporate predecessor, O'Brien-Kreitzberg & Associates Inc., for laundering contributions through its employees to numerous area politicians between 1993 and 1995.

Almost exactly two months after signing a contract with the school district, the company signed a consent order with the FPPC to pay a $40,000 fine for the laundering violations.

On the first page of OKI's school contract is a clause saying it could be fired for failing to disclose ``investigations, wrongdoings or criminal violations.''

``This is no minor deal,'' Soboroff said. ``Failure to disclose information, whether it's a mistake or a clerical error, is a serious matter.''

Soboroff said he also was disturbed that the school district's outside background investigators did not turn up any of the recent controversy surrounding OKI, or background problems with many of the 11 companies hired to work under OKI as project managers.

OKI has been involved in a highly publicized MTA controversy, involving an $85 million contract to oversee the Metro Red Line.

The firm was lead partner in Metro East Consultants, one of three joint ventures fighting for the contract.

The first round of bid evaluations, which Metro East won, was thrown out when it was revealed that evaluators hadn't checked such basics as bidders' references, past performance or financial condition.

In a new round of bidding, the MTA hired a panel of outside experts, who in July and early August ranked Metro East last.

Then a few weeks later, O'Brien-Kreitzberg Inc. paid $20,000 as lead sponsor of an east-side charity golf tournament honoring Los Angeles City Councilman Richard Alatorre, one of the MTA board's most influential members.

Several executives with Metro East companies helped organize the tournament, and also had long-standing personal and political ties to Alatorre. Alatorre also was one of the politicians who received laundered funds from OKI's predecessor.

At the tournament, MTA Chief Executive Officer Joseph Drew golfed in a foursome with OKI President Alan Krusi. Within a month of the tournament, Drew overrode the expert panel and his own staff to recommend the MTA board give Metro East the contract.

The MTA's inspector general and the U.S. Attorney's Office initiated a criminal investigation in October, the board awarded the contract to a competitor in November and Drew quit over the brouhaha in January.

This spring, Metro East sued to overturn the bid award. Last month, a state judge ruled that the entire process was so ``tainted by outside influence'' that it had to be redone.

A third selection process is in limbo while the agency's new interim CEO untangles the agency's twisted finances to see if it can even afford the east-side project.

Earlier this month, Alatorre agreed to pay the FPPC an $8,000 fine for trying to stop city regulators from shutting down an event-planning company his wife worked for.

The shutdown would have prevented the company from putting on the charity golf tournament, partly financed and planned by Metro East executives, that honored Alatorre.