Segment | Investigation

Update: County Employees Violated Policies, Faked Documents In Knabe Inquiry


Back in November, we brought you our investigation into a possible conflict of interest in the County of L.A.'s dealings with lobbyist Matt Knabe, son of L.A. County Supervisor Don Knabe. Prompted by our investigation regarding a questionable contract with Enterprise Rent-A-Car, county auditors have taken a look, and they've put out a report.

TRANSCRIPT:
Vince Gonzales/Reporter: Our original story on November 28th focused on L.A. County Supervisor Don Knabe and his son, Matt, a partner at the powerful lobbying firm of Englander, Knabe & Allen. As we reported then, a client of that firm, Enterprise Rent-a-Car, recently won a five-year, nearly $2 million fleet management contract to provide and maintain 61 new cars for the county. Enterprise was the only bidder. We found that surprising and started asking questions. Our story triggered an investigation by the county auditor, and in a new report, investigators say they found employees violated policies, misled the board of supervisors, and created fake documents in response to our requests for public records.

Gonzales: One of the documents we asked for was this list [shown in video] of potential bidders for the contract Enterprise won. What did we find on it? Auto body shops like this one, handicap van dealers in Ohio and Florida, and this tour bus company in Commerce.

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

Gonzales: Next on the list, Ken's Tires.

Producer Karen Foshay [to employee]: Do you lease cars? What do you do here?

Employee: We're a tire dealer.

Gonzales: 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.

Gonzales: And the companies on this list we spoke to -- qualified or not -- all told us they never received word of this proposed contract.

Gonzales [to employees at Whittier Collision Center]: We're looking for Cesar. We're trying to figure out if anybody who they sent it to ever got it. Do you ever remember seeing this?

Cesar Osorio/Whittier Collision Center: I've never seen anything like that before, no.

Jay McCartney/Montebello Chevrolet: I never received this request.

Gonzales: That was especially galling to those large companies that actually had cars and might have bid.

Foshay: 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 -- 61 vehicles?

Gonzales: County investigators found in reality "only 16 companies," including Enterprise, were emailed about the contract. And some of them "were not in the business of providing leased vehicles." One employee told investigators "the count of 50 vendors" the Board of Supervisors considered when they voted was a "placeholder" that should have been changed, but "he felt he could not correct the number without embarrassment." But then investigators say, "in response to a media inquiry," our inquiry, an employee "created a list of vendors knowing the list was not a true reflection of the vendors that were contacted." It turns out the list was a lie.

Investigators also interviewed employees and Supervisor Don Knabe's son and concluded, "We found no evidence to support any attempts to influence the award of the fleet services contract." When our first piece aired, Supervisor Knabe told us he was appalled at the possibility the competitive bidding process might have been compromised in any way.

Supervisor Knabe: I value and trust our county employees to do the right thing. I don't know anything about that. I don't know anything about that, and if I did, I would stop it.

Val Zavala: Now Vince, that was Supervisor Knabe's comment a couple months ago. Did he comment on this new report?

Gonzales: We reached out to him. We asked for a statement saying, you know, "You spoke very strongly about county contracts and the need to keep them clean. Would you like to say anything? Would you like to say anything about the fact that the auditor could not find that there was influence exerted?" And his office told us he felt he's spoken enough about this issue. He didn't have any comment.

Zavala: And his son, the lobbyist Matt Knabe?

Gonzales: We've not heard from him either, but what's important to note is the auditor said they could not find that any influence was exerted. It was a very limited investigation. They're not a law enforcement entity. They looked online. They interviewed people. They looked at social media, they said, to make sure there are no connections between people. And they said they couldn't find it, and that people told them there was no undue influence exerted.

Zavala: So, is there anybody to be punished for anything here?

Gonzales: The auditor suggested that some county employees be punished, one in particular. But what we're unclear about is, was this incompetence on the employees' part or was it corruption at the county level, because once you start covering up something like this, once you're generating a fake list of vendors, you have to ask, "If it happens here, does it happen elsewhere?"

Zavala: Finally, the whole idea of competitive bids is supposed to save the public money. Was there money saved here, whether it was a clean bidding process or not?

Gonzales: The county said it was supposed to save taxpayers about $300,000 by doing this, by privatizing our county vehicle fleets. The auditor said they don't know if this is really saving the taxpayers money, and they're pretty sure that we might have been able to get more money if there had actually been a real competitive bidding process, if there'd been more than Enterprise Rent-A-Car, if real companies that could have provided these services were invited to come in and bid on the taxpayers behalf.

FOR THE RECORD: A representative for Matt Knabe emailed us and said that some of the on-set discussion after this story seemed to imply that we had asked Matt Knabe for a statement right before this segment aired, when in fact we had not. We did ask Supervisor Don Knabe for a statement, but at the time of this broadcast we had not reached out to his son for a comment. In our coverage, we did point out three times that the audit could find no evidence any undue influence was exerted by the Knabes in the awarding of the contract.

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