James D. Sohn's hiring by Seville Construction Services Inc. of Pasadena highlights the tight bonds between the public officials in charge of building Los Angeles schools and the companies they hire to manage construction.
By Michael Finnegan and Gale Holland, Los Angeles Times | http://lat.ms/lpPPpc
James D. Sohn was chief of the Los Angeles Unified School District's $20-billion construction program. He's now an executive with a firm that has profited from contracts he approved. (Ricardo DeAratanha / Los Angeles Times)
May 13, 2011 - Weeks after stepping down as chief of the Los Angeles Unified School District's $20-billion construction program, James D. Sohn took a job at a company that has profited from public contracts he approved.
Sohn's hiring by Seville Construction Services Inc. of Pasadena highlights the tight bonds between the public officials in charge of building Los Angeles schools and the companies they hire to manage construction.
Sohn, now executive vice president of Seville, is the third consecutive chief facilities executive at L.A. Unified to resign and go to work for a construction management firm whose work he had overseen for the district.
As a result of Sohn's move to Seville, L.A. Unified is examining ways to tighten its "revolving door" policy, Supt. John Deasy said.
The current policy bars Seville from assigning Sohn any work related to L.A. Unified for two years, according to the district's ethics office.
Deasy offered no details on potential changes to the policy. For now, he said, the district probably will not give Seville any additional work.
"I like to err on the side of high caution," Deasy said in an interview.
Sohn declined to be interviewed. In an email exchange, he said he did not plan to do any work for Seville on L.A. Unified projects.
Sohn wrote that the firm had no staff members working on school district business.
"This was one of the factors in my decision to join Seville," Sohn said. "Another was the opportunity to help build up a small firm and to open an office in the Bay Area, where I went to school and lived for many years."
"I should note," he added, "that my leaving and joining a firm in the industry is typical, as evidenced by each of my predecessors and those of many other public agencies statewide."
Sohn said that he had shown Seville no favoritism while at the district, and added that the company is paying him less than his L.A. Unified salary of $244,000 a year. He did not say how much less.
Sohn, 44, has been a key figure in Los Angeles school construction for nearly a decade. As a senior construction manager at L.A. Unified from 2002 to 2005, he oversaw conversion of the Ambassador Hotel into a $578-million school complex.
From 2007 to 2009, Sohn, then a vice president at URS Corp., managed the Los Angeles Community College District's $5.7-billion campus-building program. He then returned to L.A. Unified, serving as head of school construction until he stepped down in March. Seville hired him in April.
In addition to hiring private firms to build schools, both L.A. Unified and the college district have relied on contractors to serve as employers of record for people hired to manage their construction programs: contract administrators, quality control specialists and others.
These employer-of-record contractors, known in the industry as "body shops," typically do little more than process paychecks and administer job benefits for the staff members placed on their payrolls. They collect a surcharge on the employees' wages to cover overhead expenses and provide a profit margin.
Many of the contractors are campaign contributors to the elected board members who oversee L.A. Unified and the community college district.
Seville participated in this system at both agencies.
College district records show that Sohn placed eight people on Seville's payroll in 2008 and 2009 when he was managing the campus rebuilding program. It has cost taxpayers $2.1 million so far to employ those people, according to district records.
In February 2010, by which time he was back at L.A. Unified, Sohn approved a contract with Seville for up to $300,000 to provide construction managers, district spokeswoman Shannon Haber said.
L.A. Unified has paid Seville $79,000 under the contract so far, Haber said.
A Times investigation of the community college building program found that it cost the district much more to employ construction managers through "body shops" than it would have to employ some or all of them directly, as some public agencies do.
L.A. Unified's inspector general reached a similar conclusion regarding the school district's construction program in 2009. The district could have saved more than $450 million over six years if it had employed construction managers directly, the report said.
At both L.A. Unified and the college district, officials have defended the body-shop system by saying it allows greater flexibility to expand and reduce the construction management staff and avoids the entanglements of civil service rules on layoffs.
In his email, Sohn said the system did not originate with him. L.A. Unified has employed building program staff through contractors for more than 14 years, he said.
A few months before Sohn left L.A. Unified, Jess Womack, the district's interim inspector general, found that Sohn had "inaccurately represented" to the Board of Education that he was cutting contractor payment rates more than he actually was.
Womack's report also found that Sohn's office awarded $96 million in construction management contracts last year — $31 million above the limit set by the board. The contracts included Seville's.
By email, Sohn said his office had mistakenly awarded contracts beyond the approved limit and took steps to correct the error. He also said he had cut back on the use of contractors and had increased the proportion of work performed by district staff.