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Consultant to Port Emerges As Key Figure In City Probe
By DAVID GREENBERG
A Shanghai-based marketing consultant for the Port of Los Angeles who is drawing attention from investigators probing the city's contracting practices has had close ties to the Hahn administration and a track record of bypassing port staff members to deal directly with Hahn aides.
William Wong, whose records and correspondence with port officials were subpoenaed by federal prosecutors last month, was particularly close to Leland Wong, a major Hahn fundraiser and a former port, airport and water and power commissioner. Leland Wong, no relation to William, resigned from the water and power commission in January and is under intense scrutiny in the coordinated federal and county investigation.
William Wong also worked closely with former Deputy Mayor Troy Edwards, the Hahn aide who was in charge of dealings with the port, airport and water and power departments and who resigned in March.
Federal and county grand juries are looking into whether city contracts, including terminal leases at the port, were awarded favoring political donors.
Numerous port officials have been subpoenaed to testify. Last week, the District Attorney's Office served search warrants at the port and several other locations for documents pertaining to Leland Wong, said Sandi Gibbons, a spokeswoman for District Attorney Steve Cooley.
"We executed search warrants (May 19) in connection with an ongoing criminal investigation," Gibbons said. "Leland Wong (is who) we're looking at."
In addition, the city's Ethics Commission last week asked that the port turn over documents pertaining to many lease dealings dating back to 2000. No names were mentioned in the letter, which demanded that the documents been turned over by June 8.
The roles of Leland Wong, William Wong, Edwards and port officials could be significant in the broader investigation of how the city has handled its contracting practices at the three revenue-generating departments - harbor, airports and water and power. A key question is whether political pressures coming from the mayor's office - involving fundraising activities of top commissioners, or other factors - ultimately influenced business decisions.
'I can help'
In a telephone interview from Shanghai with the Business Journal, William Wong said he first became friends with Leland Wong in the 1980s, when William was an interior designer in Los Angeles.
It was Leland Wong who helped William Wong's company, Jade Peak International, land the Shanghai contract to drum up business for the port among Chinese shippers.
"We are friends now," William Wong said. "He is the one who referred me to the position. He was telling me some of the things they wanted to accomplish. I said I can help."
Exactly what Jade Peak did to earn the $567,000 that it billed the port over five years is unclear, beyond entertaining visiting officials. The contract called for William Wong to create business for the port by making and maintaining relationships with top foreign steamship line officials and recommending future projects, in addition to arranging for visits by port officials and other U.S. dignitaries.
The port's foreign consultants are required to file monthly progress reports with the port's marketing department, recaps of the past month's business activities and an itinerary of activities in the upcoming month. But William Wong's reports offered no updates on business-related activities. Instead, they synopsized general trends in maritime trade, much of which had nothing to do with the L.A. port.
"Chinese airlines had combined profits of US$83 million in 2001, with projection for earnings of $120m to $144m this year," Wong wrote in his February 2002 report, obtained by the Business Journal. "China announced the airline industry was profitable in 2000 but has never given a figure."
The port's business development director, Al Fierstine, said he was pressured to hire Jade Peak as a Shanghai-based consultancy by Leland Wong, then president of the port commission - despite William Wong's inability to speak Mandarin.
"I was asked by Leland to take a look at William as a possible candidate. But the emphasis was, 'I'd like you to hire him,'" Fierstine said.
At first, Fierstine said, William Wong performed adequately. But within a year after the Hahn administration took office in July 2001, Jade Peak began to bypass him and deal directly with Edwards, Hahn's liaison to the port.
After that, the two began to clash, Fierstine and William Wong agree. A trip by Hahn to China in November 2002 was a flashpoint in the relationship. Fierstine claims that Wong froze him out of preparations for the trip; Wong claims he was doing the best he could under a hasty deadline, dealing directly with Edwards and Keller.
"Al didn't think it went through the proper channels," said William Wong. "If that's the case, he should have talked to the mayor's office."
Fierstine said he refrained from firing Jade Peak at the behest of Hahn's aides and his superiors at the port, including Keller, whose job can be lost with the stroke of the mayor's pen. Keller declined comment.
Wong acknowledged that some port directives came from Edwards. "If you say orders, yes, because on the hierarchy of the organizational chart, Larry would be under Troy," said Wong.
Fierstine said he had not signed off on William Wong's expense reports for about two years and advised others in the business and marketing division not to do so either.
"My recommendation to the marketing division when this whole thing started going sideways was to be very cautious when putting their signature on anything of William Wong's," said Fierstine.
Ultimately, expense sheets were signed by Eric Caris, assistant marketing director, who refused to explain to the Business Journal why he signed them and referred questions to Fierstine.
Despite Fierstine's concerns, it wasn't until the departures of Edwards and Leland Wong that he felt he had the political cover to terminate Jade Peak's contract.
"During the past two years, the Shanghai office would not comply with various directions from my office," said Fierstine. "For political reasons, it wasn't wise to press the issue. With the removal of some of the political ties, I felt much more comfortable firing him and making it stick."
Leland Wong left the harbor commission in July 1998, when then-Mayor Richard Riordan appointed him to the Airport Commission, but Fierstine said he continued to bear influence at the port. Wong remained on the airport commission until July 2003, when Hahn reassigned him to the Board of Water and Power Commissioners.
In January, Leland Wong resigned his DWP post, as well as his job as director of government and community relations in Southern California for Kaiser Permanente, after the HMO revealed he allegedly used its money for political gifts and to sponsor campaign fundraisers.
An internal investigation conducted by Kaiser concluded that Leland Wong used Kaiser's money to purchase approximately $250,000 in Lakers tickets and other events from former airport commission President Ted Stein over the last seven years.
Wong has been a major fundraiser for mayors dating back two decades to Tom Bradley, who first appointed Wong to the city's police and fire pensions board in 1989.
Leland Wong declined comment directly. Through his attorney, Dave Scheper, he said he "denies categorically any wrongdoing in connection with Jade Peak's contract with the port or the city."
During the months leading up to his firing, William Wong made it clear he was taking orders from Keller and not Fierstine, according to e-mails between Fierstine and Wong obtained by the Business Journal.
"Just want to let you know I am disregarding your instructions to contact you or marketing on all future issues," Wong wrote in an April 1 e-mail to Fierstine.
"Then you can consider this your 30-day notice or termination," Fierstine shot back the same day.
In a lengthy follow-up e-mail, William Wong pleaded for his job back, suggesting that the communication gap was a misunderstanding.
"Sorry Al. It was a typo," Wong wrote. "It should have read 'Just want to let you know I am NOT disregarding your instructions to contact you or marketing for all future issues.'
"Also my response
should have read 'I did respect your work and learned
quite a lot FROM you.'"
Los Angeles Business Journal staff writer Amanda Bronstad contributed to this story.