The city Airport Commission, fearing possible litigation over conflict-of-interest allegations involving a former commissioner, voted Tuesday to throw out bids for an indoor advertising contract at Los Angeles International Airport.
The commission, which manages the city airport agency, Los Angeles World Airports, will start fresh with a new round of bidding after facing allegations that the recommended bidder, JCDecaux, benefited from the involvement of former commission president Alan Rothenberg.
JCDecaux included Rothenberg's firm, Premier Partnerships, as a subcontractor that would oversee advertising at LAX's Tom Bradley International Terminal.
Rothenberg was a commissioner for five years before resigning in 2010, after he acknowledged that his ties to LAX food and beverage concessionaire California Pizza Kitchen was holding up the airport's modernization.
JCDecaux's attorney Ellen Berkowitz expressed disappointment at the commission's decision, saying "it is very troubling and sets disturbing precedent."
JCDecaux executives called the allegations made by competing bidder Clear Channel "outrageous," and expressed "severe concerns" about the "ugly manner in which false allegations" were revealed only after the outcome of the bidding was announced.
"No questions about any member of our team were raised at any point during the lengthy bidding process by airport staff, the city attorney or the losing bidder," according to a company statement. "Clear Channel only made these unfounded allegations after LAWA's judging panel unanimously selected our team, and long after the allowable protest period had expired."
Attorneys for Clear Channel lodged a protest in June, contending that JCDecaux -- which has an existing contract with LAX -- had access to "non-public, inside information" such as sales and sponsorship opportunities and financial forecasts that allowed them to produce a more competitive bid application.
Clear Channel's attorneys warned the city would run afoul of ethics laws and called for JCDecaux to be disqualified. Even though Rothenberg was not a commissioner when the contract went out to bid, he was on the board when the job opportunity being contracted out was first considered, according to Clear Channel's attorneys.
JCDecaux also should not be allowed to participate in any future bidding for the job, attorneys wrote in a letter to the city attorney.
"(JCDecaux) is tainted in this process because of their partnership with Premier Partnership and Mr. Rothenberg," Clear Channel's attorney, Stuart A. Shanus, wrote in an Aug. 13 letter. "Once tainted in a process -- always tainted in a process."
Clear Channel representatives today applauded the board's decision to reject the bids.
"It was certainly confirmation that the proposal was tainted," Clear Channel spokeswoman Fiona Hutton said.
She added the "potential conflict of interest, whether JCDecaux is qualified, is still a question we're going to continue raise."
The renewed search for a company to provide advertising on recently installed digital screens at the Tom Bradley International Terminal will likely be overseen by a newly appointed airport commission. Mayor Eric Garcetti announced last week that just one member on the commission, Valeria Velasco, would be staying on the board.