Officials fail to resolve rail board impasse

Amid budget talks last week, Gov. Arnold Schwarzenegger and legislative leaders tried to ease restrictions in a state conflict-of-interest law so that two prominent officials from Anaheim and Los Angeles could remain on the board of the California high-speed rail project.

Their attempt to retain Anaheim Mayor Curt Pringle and Richard Katz, a member of the Los Angeles County Metropolitan Transportation Authority board, would have been tacked onto the state budget bill. However, Senate President Pro Tem Darrell Steinberg (D-Sacramento) derailed the effort after opposition arose from other Democratic legislators.

Katz and Pringle are embroiled in a controversy over whether their dual service violates a government code section that prohibits officials from simultaneously holding public offices with interests that could clash.

The legislators involved in the budget talks “were trying to take a blatant conflict of interest off the table at the last minute,” said state Sen. Gloria Romero (D-Los Angeles), who wrote the provision, which passed in 2005. “They wanted to do an end run around my bill.”

Last week, the state attorney general’s office received three complaints from community and high-speed rail activists requesting an investigation. The office has sent letters to Katz and Pringle asking them to explain their positions on the matter within 30 days.

In addition to the high-speed rail board, Anaheim City Council members and MTA board members are in a position to make multimillion-dollar decisions related to sections of the bullet train project planned to run between Los Angeles and Orange counties. The southern terminus of the project’s first phase would be in Anaheim.

Earlier this year, the Legislative Counsel, the legal arm of the Legislature, stated in an opinion letter that a court would probably rule that Pringle and Katz hold incompatible offices.

Steinberg declined to comment on the attempt to put an exemption in the budget. But several lawmakers who were drawn into the controversy said the discussions occurred during meetings of the Big Five legislative leaders. They include Schwarzenegger, Steinberg, Assembly Speaker John A. Pérez (D-Los Angeles), Senate Republican leader Dennis Hollingsworth (R-Murrieta) and Assembly Republican Leader Martin Garrick (R-Solana Beach.)

State Sen. Alan Lowenthal (D-Long Beach), chairman of the transportation committee that oversees the bullet train project, said he learned from Steinberg’s office last Friday that the panel wanted to exempt Pringle and Katz.

“I went ballistic,” Lowenthal said. “I couldn’t support that. The law is the law. Everyone knows what’s going on and they’re trying to sneak something into the budget.”

At a committee hearing last spring, Lowenthal questioned whether Pringle and Katz had conflicts of interest. He was particularly concerned about a proposal backed by Pringle to use $200 million in high-speed rail money to complete a huge transportation center in Anaheim that would also serve buses and commuter trains.

The proposal to ease the conflict restriction was initially raised by someone in the Schwarzenegger administration, according to a legislative aide who was privy to the discussions but would only speak on condition of anonymity. The governor appointed Katz and Pringle, the board chairman, to the High-Speed Rail Authority.

The source said some Republicans on the budget panel wanted to address the matter more broadly, beyond the specifics of the Pringle and Katz situations.

“You potentially are losing some expertise if you don’t have local government officials with knowledge” helping oversee the project, the source said, summarizing one argument.

In the end, however, Steinberg blocked the proposal after Democrats who were not on the budget panel, such as Lowenthal and Romero, came out against the idea.

Although Katz discussed the multiple-office issue with legislative leaders several months ago when it surfaced in media reports, he said Monday that he had no indication it would come up at last week’s closed-door budget negotiations.

“News to me,” Katz said.

Katz, a former state legislator, said his only discussion with the governor about high-speed rail occurred when Schwarzenegger appointed him last year. He added that he wants to continue on the state board and sharply opposes efforts to exclude local transportation and city officials.

Pringle could not be reached and a spokesman for the governor declined to comment.

dan.weikel@latimes.com

rich.connell@latimes.com