Segment | Investigation

Family Ties May Mean Favors for L.A. County Supervisor's Son

WATCH OUR DEC. 5 UPDATE HERE.

They are among the most powerful politicians in California, nicknamed "The Five Little Kings." They are L.A. County's five supervisors. Together they control a budget and staff that impacts the lives of 10 million people. But does the board treat all Angelenos equally? There are some who say special treatment is doled out when the face is familiar. Correspondent Vince Gonzales has our exclusive investigation into one supervisor with some interesting family ties.

TRANSCRIPT:
Vince Gonzales: You're looking at one of Los Angeles County's few money-making ventures. Two million rounds of golf are played on county courses every year, generating about $16 million annually. Bogeys are big business in L.A.

This avid golfer is Don Knabe, a member of the Los Angeles Board of Supervisors. He and the other four county supervisors control a $24 billion budget that puts them among the most powerful politicians in California. Supervisor Knabe handles most golf issues for the county. And last December he introduced a motion to extend the leases on six courses run by the American Golf Corporation.

Under county rules, American Golf could get these extensions without any competitive bids as long as they gave the county a larger share of revenues. Included in the file that went to his fellow supervisors was this letter of recommendation Knabe wrote for the company, which got the lucrative contract extensions. Just another day at the Board of Supervisors, until you take a closer look at some of the players.

Supervisor Knabe is not alone in his love of golf. It's also a big part of his son's life. Matt Knabe often plays in and organizes tournaments with his father. He even created the Knabe Cup in part to honor his father. Matt used to be one his father's deputies, and according to his official bio, he "handled all political strategy, policy and legislation for the supervisor," including "county golf issues." He's now a partner at Englander, Knabe & Allen, one of the largest and most powerful lobbying firms in L.A., and represents proud Knabe Cup sponsor -- the American Golf Corporation.

Eric Preven: The thing that got me a little irked was I learned that one of the supervisor's sons, supervisor Knabe's son Matt Knabe is a lobbyist and he has been taking money from the American golf cooperation.

Gonzales: Eric Preven is a regular observer at the board of supervisors meetings. He recently spent a lot of time researching the contracts obtained by Englander-Knabe clients, especially the county's golf deals.

Preven: And that for me was kind of a red flag as to are we getting the best deal -- the public? You know, this is county land -- public land -- and when they come up for renewal is the only time we get a chance to see how they are doing.

Gonzales: Critics say the county might have been able to get a better deal through competitive bidding and point out county rules say no-bid extensions like this are not allowed if there are "performance issues with the contractor."

County audits have found American Golf-managed courses with "internal control weaknesses." One course had a "significant deficiency," and others had "deficiences...in financial reporting." Auditors determined some courses owed the county thousands. But officials recommended the course contracts be extended anyway.

And American golf is not the only Englander-Knabe client to go after county contracts. Special interest groups and companies, large and small, pay Englander-Knabe hundreds of thousands of dollars to lobby the county. Many of those same groups and companies also donate to Supervisor Knabe's campaign coffers and to his charities, events, and other causes. The supervisor and his son can often be found at the same events. Some they co-sponsor. Others have been sponsored by Matt's firm, which Don Knabe also pays to run his political campaigns. With all this cash swirling, Supervisor Knabe then goes to board meetings and introduces and votes on motions and contracts involving Matt's clients. And even though, over the years, that's raised concerns of conflict of interest under current county and state law, all of this is 100-percent legal.

Bob Stern: I have a feeling that when the son calls Don Knabe, that Don takes the phone calls.

Gonzales: Bob Stern, who wrote many of California and L.A.'s current ethics laws, says even if it is legal, the Knabe family ties trouble him, and he says they should trouble voters, too.

Stern: There are no legal restrictions on a son lobbying a father. There are ethical issues, moral issues, but no legal issues. The perception is that clearly the son is there, is being hired in order to influence his father.

Gonzales: In 2006, Agua Dulce resident Justine Turner and her attorney were among the first to question Matt Knabe's connections.

Justine Turner: Our community was trying to pool the funds together to hire the attorney, to try and fight a very large wealthy developer and to see that there was the son of one of the supervisors sitting with his team in the hearing. You're just like, 'We might as well pack up and go! We don't have a chance.' You did feel you didn't have a chance.

Gonzales: She argued that family relationship was influencing decisions on expanding the Agua Dulce Airpark, for which Matt was a lobbyist. She says Supervisor Knabe didn't take it well.

Turner: He was very upset when I had my attorney John Murdock write a letter asking him to recuse himself from the airpark issue. To me, it wasn't a legal issue. It was an ethical issue for me, because there is the appearance of bias -- they are father and son.

Gonzales: Justine and other local citizens failed to prevent the airpark expansion. But they're not alone when it comes to complaining about Knabe connections at the board of supervisors.

John Nahhas/Los Angeles Resident [speaking at meeting]: Knabe's son is involved as a consultant for the winning contractor in this project. Even if there is no conflict, even if this is somehow on the up and up, it smells bad.

Gonzales: What he thinks "smells bad" is an $8 million contract the county recently gave another Englander-Knabe client to run parking lots in Marina Del Rey and at county beaches. The other bidders claimed the winning company, Modern Parking Incorporated, filed a flawed proposal that allowed them to underbid the other companies by $300,000.

Robert Hindle/Parking Concepts [speaking at meeting]: I think the price that they proposed is not realistic. And I know the price is the price, but it's going to be an operation that will fail.

Stan Bochniak/Ampco System Parking [speaking at meeting]: And it's unusual also that so many different operators who are competitors get together and feel this strongly about it to come and speak on this behalf.

Gonzales: The board was unswayed and Modern Parking kept the contract, which Supervisor Knabe voted for.

And then there's Englander-Knabe client Enterprise Rent-A-Car. Enterprise recently won a five-year, nearly $2-million fleet management contract to provide and maintain 61 new cars for the Housing Authority. We decided to take a closer look at the list of companies invited to compete with Enterprise. What did we find? Auto body shops like this one [pictured], handicap van dealers in Ohio and Florida, and this tour bus company in Commerce.

Eddie/Fast Deer Bus Charter: We are not renting cars. We do buses only.

Gonzales: Next on the list - Ken's Tires. As we worked our way through this list, we found many of the businesses on it aren't qualified to bid on this contract. They don't even sell or lease cars. And the companies on this list we spoke to, qualified or not, all told us they never received word of this proposed contract. That was especially galling to those large companies that actually had cars and might have bid.

Jay McCartney/Chevrolet Montebello [to Gonzales]: I don't know how some of these would be able to fulfill a request for new vehicles. They're not licensed to sell or deliver new vehicles.

Producer Karen Foshay [to McCartney]: Is this something you would have been interested in applying for?

McCartney: Yeah. That's what we do. We respond to -- especially one that big. Sixty-one vehicles?

Gonzales: Enterprise, however, was notified three times according to the list. They somehow were the only bidder to respond. So they got a "sole source contract," which Supervisor Knabe voted to approve. The answer to how this could happen was obvious to some on the list -- like the guys at Whittier Collision Center.

Gonzales [to Cesar Osorio at Whittier Collision Center]: The fix was in somebody else was going to get the contract?

Cesar Osorio: Definitely.

Tony Delgado/Whittier Collision Center: I think there's something fishy about that. Because why didn't we get it and somebody else did?

Bob Stern: Clearly somebody didn't want there to be a lot of bids on this. This is something that should have to be examined because what you have is you want the lowest possible bid and the best possible bid on it, and if you are only getting one bid, then clearly there is a problem.

Don Knabe/L.A. County Supervisor [to Gonzales]: My life is an open book. And I'm willing to deal with that. I'm willing to answer your questions. That's why I agreed to go on the air.

Gonzales: Supervisor Knabe says any questions of conflict of interest between him and his son are old news.

Knabe: I've been doing this for nine years. I did it when he worked for me. But he has a right to make a living. And he also has to abide by the rules and regulations. He's a registered county lobbyist. He doesn't cut any corners, doesn't cheat, doesn't hide, but he happens to be my son. It's just an ongoing issue and he has to deal with that. It's just the price of being a Knabe.

Gonzales: Through a spokesman, Matt Knabe declined our interview request, but in a statement Englander-Knabe said: "There is no conflict of interest for our firm to represent our clients before the board of supervisors. Matt does not lobby the supervisor directly or attend meetings the supervisor is present in." But does Matt ever discuss county business with his father?

Knabe: Very rarely. I mean if it is a case, it's something that maybe he's had to deal with and maybe ask me a question or something. Very rarely.

Gonzales [to Knabe]: When he does bring something up to you, do you ever say, "You know what, son, we've reached a point where we can't talk anymore?"

Knabe: Oh, absolutely.

Gonzales [to Knabe]: How does that go?

Knabe: It just goes. First of all, when you say 'son' -- he is my son, but he is almost 40 years old. He's married, has two kids, and has the right to make a living. But it's a rare case, because we both know our limits in that situation.

Gonzales [to Knabe]: What would you say to people who say they hired Matt because of his access to you?

Knabe: I would say, they don't know Matt and they don't know me. If it's not a good deal for the county and it's not a good deal for what we do each and every day here, there is no way that being my son would change my vote. End of conversation.

Gonzales: In the case of American Golf and all those course leases, Supervisor Knabe says it was simple economics.

Knabe: The director of Parks and Recs came to us and said, "This is a good deal. We want to move forward." They've been a great partner on the courses they operate and they wanted to, they recommended moving forward. It wasn't anything that I initiated or that Matt Knabe initiated. It was initiated by the department like they would do with any other contract.

Gonzales: And the supervisor said he was appalled at the possibility the competitive bidding process might have been compromised, like in the case of that Enterprise Rent-A-Car contract.

Knabe: I value and trust our county employees to do the right thing. I would be aghast or very upset with anyone that made a decision based on my son's company or partner without any good analysis, competition whatever it may be. I don't know anything about that, and if I did, I would stop it.

Gonzales: The supervisor points out that sometimes he votes against Englander-Knabe clients. And again, under current laws, the Knabes are not violating any conflict of interest rules. But when asked why he doesn't squash any perception of conflict of interest by abstaining or recusing himself, Supervisor Knabe says that's not the solution.

Knabe: Not because I just think it's not right. They are registered, the transparency. Everyone knows who the players are. He's a partner in a firm. He has clients. His company has clients. They come before us. Sometimes I know it's their client. Sometimes I don't even know if it's their client.

Stern: If I were the attorney for Don Knabe, I would tell him, "Do not get involved with anything your son is involved with," and I would tell Matt Knabe, "Do not lobby your father -- don't even lobby the county." But the perception, the public perception of this is so bad.

LEAVE A COMMENT Leave Comment  

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There is no conflict of interest for our firm to represent our clients before the Board of Supervisors. County Counsel has also opined that it is not a conflict and the question was first raised when Frank Schabarum was a county lobbyist while his father, Pete Schabarum, was a county supervisor. Supervisor Knabe is but only one vote and we would not be the fastest growing PR firm in Los Angeles County if we could not routinely get the support of other Supervisors on behalf of our clients. The county is only one of the many places where our firm does business.

Matt does not lobby the supervisor directly or attend meetings that the Supervisor is present in. Matt spent seven years at the County and takes great pride in the relationships that he developed throughout all levels of City and County government. We take the county lobbying guidelines very seriously and we register all of our clients immediately so that we are transparent in who and what we are advocating for. We have many great and successful members of our firm who do not have family members in the business.

It is not necessary for the Supervisor to recuse himself from voting on EKA client issues. The Supervisor votes for and against our clients based on individual circumstances. It is well-documented that Supervisor Knabe is very fair to all sides and takes the integrity of the process very seriously; it is why he is so widely respected on the local, state and federal level. It is an insult to the other four Supervisors character to imply that they don't do the same and take their responsibilities seriously as well. Matt will continue to be a very successful advocate at the county level long after the Supervisor is termed out of office in 2016.

Eric W. Rose
Partner
Englander Knabe & Allen

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Mr. Rose:
Matt Knabe putting $460,000 in lobby fees in the EKA pig-out bank, while avoiding an RFP for American Golf Corp, a Goldman Sachs company, is not just a conflict, its a heinous abnegation of responsibility by all five supervisors.
Evidence of a Goldman caper, with yer best bud as accomplice, arose in December when six of the county's best courses, with Knabe Sr.'s blessing, were quietly issued 20+ year contract extensions in exchange for modest 10% rent increases. Since the scope of such a deal is more than half a billion in gross receipts, the absence of competitive bidding raised an immediate red flag.County Parks and Rec's flimsy rationale for not exposing these valuable leases to a market test, was a claim that an auction might yield less than what was offered by American Golf. Matt's close contacts at the county would have us believe that they know the market better than the market itself.
This morning I confirmed that Warren Leary and Gary Kossick, two long time American golf employees, took jobs at LA County Parks and Recs over summer 2011, as Director of Golf and Assistant Director of Golf, just five months before recommending that the Supervisors agree to the 20 year extension.Admire your effort to defend, but the public has had enough of "this is 100% legal." It's shameful. It's wrong and the firm should be banned from LA County. We want our RFP.

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Rose,

Based on your laughable defense of your colleague, Mr. Matt Knabe, I would never hire you or your firm to represent me in a lobbying context or any other.

Your claim that Matt never lobbies his father directly is flatly contradicted by Matt Knabe's own statements to Jim Newton in his January 2011 column:

http://articles.latimes.com/2011/jan/04/opinion/la-oe-newton-knabe-20110104

You guys would be all flipping burgers if it wasn't for your cozy insider relationships.

You also left out the fact that Englander, Knabe and Allen Associates managed John Noguez's political campaign for L.A. County Assessor. You know the one - where dozens of contributors later received big discounts off their property tax bills. I'm sure there was zero correlation between those campaign contributions you helped drum up and the later corruption.

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How interesting that a partner in Englander, Knabe & Assoc. would mention in connection with his client and his partner the name of one of the most crooked L.A. County Supervisors to ever sit on the Board. Pete Schabarum was not only heavily disliked by the poor, labor movement, AIDS activists, environmentalists, etc., but NOT ONE of his fellow Supervisors attended his retirement party. He finally gets caught and indicted on charges:
http://articles.latimes.com/1997-03-14/local/me-38192_1_indictment-on-embezzlement-charges
You are absolutely right that the pattern fits the Schabarum mold of embezzlement and political corruption and that Krattli (current County Counsel) and other County Counsel appointees will not see a conflict. The Knabes have been brokering deals against the taxpayers' interests in Marina del Rey for many years and now County Assessor John Noguez is sitting in jail for his part in those and other deals.
One question remains - will our new District Attorney elect, Jackie Lacey, continue to look the other way like Don Knabe's long-time friend, Steve Cooley (our current DA for another couple of weeks) has been doing for so many years?

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Mr. Rose:
Matt Knabe putting $460,000 in lobby fees in the EKA pig-out bank, while avoiding an RFP for American Golf Corp, a Goldman Sachs company, is not just a conflict, its a heinous abnegation of responsibility by all five supervisors.
Evidence of a Goldman caper, with yer best bud as accomplice, arose in December when six of the county's best courses, with Knabe Sr.'s blessing, were quietly issued 20+ year contract extensions in exchange for modest 10% rent increases. Since the scope of such a deal is more than half a billion in gross receipts, the absence of competitive bidding raised an immediate red flag.County Parks and Rec's flimsy rationale for not exposing these valuable leases to a market test, was a claim that an auction might yield less than what was offered by American Golf. Matt's close contacts at the county would have us believe that they know the market better than the market itself.
This morning I confirmed that Warren Leary and Gary Kossick, two long time American golf employees, took jobs at LA County Parks and Recs over summer 2011, as Director of Golf and Assistant Director of Golf, just five months before recommending that the Supervisors agree to the 20 year extension.Admire your effort to defend, but the public has had enough of "this is 100% legal." It's shameful. It's wrong and the firm should be banned from LA County. We want our RFP.

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Thank you So Cal Connected for shining a light on the LA. County Board of Supervisors. Supervisor Knabe led the County's assault on Marina del Rey in which favored developers cut numerous corners and received many sweet heart deals, almost all of which were never reported in the press, with the exception of Leslie Dutton reporting on FullDisclosure.net. When Leslie Dutton rented a room in a County facility in Marina del Rey for a fundraiser, Knabe did not waive the parking fees as he usually does for such events. So most of Dutton's guests received large parking fines. Dutton complained and asked Santos Kreimann to send her an accounting of the parking revenues in Marina del Rey. Kreimann was the director of the Department of Beaches and Harbors and is now the newly appointed County Assessor. The spread sheets he sent were confusing, contained a serious arithmetical error, and contained a number of suspicious number distributions. It was a very shoddy job of accounting. So when the County wanted to replace the parking company with a new one for the Marina, I thought I would go down to the BOS meeting and remind the supervisors of the crummy accounting and suggest that this change of parking companies had something to do with the accounting. In fact I was wrong, but my concern stimulated Eric Preven to begin his investigation of the of the parking situation and he discovered that Matt Knabe was lobbying for the winning parking company. Note that the same County lawyers who failed to convince Knabe that his son's lobbying smelled bad were also the same lawyers who should have pointed out that the Brown Act was being violated by forcing effective speakers such as Eric Preven and Jon Nahhas to speak at inappropriate times and with inconsistent, small, time limits. This is all laid out by looking at the BOS transcripts of this Fall and Summer and searching on Nahhas and Preven to see how their right to speak was truncated, and thus the rest of the public couldn't understand what the issues were, and neither could the Supervisors.