UPDATE 2: Shane Goldmacher explains what went down:
Several rail board members demanded more information about the selection process and the winning bid, calling the staff panel’s report inadequate and saying they might want to hear presentations from the runners-up.
“The staff report and recommendation here wouldn’t be adequate in kindergarten,” said Richard Katz, a board member.
Jeffery Barker, a member of the staff panel and deputy director at the California High Speed Rail Authority, said Mercury’s bid scored 91, the runner-up 90.
Commissioner Lynn Schenk said that was “awfully close – within the margin of error of subjectivity.” And she raised questions about the “formal and informal, professional and other relationship with members of the selection team” and Mercury.
A vote was postponed until the rail board’s October meeting.
I'm all for more time to examine the advantages and disadvantages of the two bids. My guess is this will eventually be rebid with a different oversight and decision process.
UPDATE: As I predicted, this contract was anything but a done deal. Shane Goldmacher reports the CHSRA board voted to postpone the vote on awarding the contract.
Back to the original post...
A little while back the California High Speed Rail Authority announced it was putting out for bid a $9 million contract to handle its communications - everything from designing the form (but NOT the content) of the next Business Plan to public outreach to local communities along the proposed HSR line. Kris Deutschmann of KDC Communications had been leading the communications, along with several other project assistants. I have had very good interactions with Kris and those other assistants. But with the passage of Prop 1A the CHSRA saw the need to ramp up its communications strategy, and invited bidders. KDC bid, as did many others, mostly the usual suspects of California political communications. Yesterday, we learned that the winner was Mercury Public Affairs.
Needless to say, this has raised a few eyebrows.
Mercury Public Affairs has some heavy hitters. Adam Mendelsohn is a partner - he used to be Arnold Schwarzenegger's strategist. Steve Schmidt is a partner too - he managed Arnold's 2006 campaign for reelection (and the "senior campaign strategist" for the McCain 2008 campaign). Not all of their partners are Republicans - one is Fabian Núñez, Democratic Speaker of the Assembly from 2004 to 2008.
The choice of Mercury for this contract by a subcommittee of the CHSRA board (the full board will vote on the choice at today's meeting in Sacramento) is being seen by some as a potential "payback" that might raise "ethical" issues. Shane Goldmacher at the LA Times - one of the state's best political reporters - examines this in his article on the contract:
Two members of the staff panel are former Mendelsohn colleagues.
Ethics watchdogs raised questions about the appearance of favoritism.
"You can't help but raise your eyebrows," said Kathay Feng, executive director of California Common Cause.
"We are seeing a revolving door of legislators and former state officials and state employees going from public service to private PR firms . . . and pulling on all the personal relationships that they've developed to build up their business."
Kathay Feng, who I know and respect as a colleague, is not wrong to point out the revolving door of state officials and employees. And the personal relationships do count for a lot.
However, in the world of Sacramento communications consultants, virtually everyone has a political relationship:
One member of the staff panel, Jeffrey Barker, previously served as associate and deputy communications director in the governor's office, working daily with Mendelsohn. Barker, who began working for the rail commission in August, also worked with Schmidt....
Barker, now deputy director of the California High Speed Rail Authority, said the panel followed a "regimented process" and that there was no conflict of interest.
"We evaluated these proposals based strictly on communications and outreach abilities," he said.
Barker said he and Bowman "knew members of every single [public-relations] team that came in," not just those at Mercury.
So while my Calitics co-blogger Brian Leubitz reads this as having "that whiff of a payback", I don't think that's exactly right. Virtually anyone picked for this contract would be subject to the same charges.
And yet I don't think it is coincidental that Mercury won the contract. It's not a matter of payback but of political logic. The CHSRA's new chairman is Curt Pringle. He's a Republican, mayor of Anaheim, and close to the governor. Another one of Arnold's key point people on the CHSRA board is David Crane, who I wrote about at Calitics in 2007 (before I started this blog).
From what I am given to understand, Pringle and Crane are charting a more assertive course for the CHSRA in leading the HSR project to completion. They are apparently doing so with the support and engagement of the governor's office, which may see HSR as a "legacy project" for a governor with 18 months left in office.
As anyone who is familiar with my writing at Calitics knows, I am not a fan of this governor. His legacy is going to be a state in ruins, a California dream turned into a nightmare. He has usually chosen to play a governor on TV, but has notoriously neglected the details of behind-the-scenes governance. Further, he spent most of his term in office trying to gut the CHSRA's funding, and delayed the Prop 1A bond not once but twice - it was originally to go before voters in November 2004, and again in November 2006. As it turned out, the delay to November 2008 may have ultimately worked in our favor, but that's no thanks to Arnold. History will not be kind to him, nor should it be.
And yet the California HSR project is in desperate need of political leadership. As a separate Authority, the day-to-day management of the project isn't in the hands of legislators or a department of the executive branch that reports to the governor. This is intended as a good thing - authorities have more ability to cut through red tape and get things done, at least in theory, without political meddling or micromanaging.
The downside is that the independence of authorities like the CHSRA means that politicians don't feel they have the same stake in the project as they might otherwise have. This is a particular problem in our term-limited legislature, which aside from a handful of folks like Fiona Ma and Cathleen Galgiani hasn't seemed to give a fuck about the project, except when Senator Alan Lowenthal ramps up another effort to gut the project and turn HSR into glorified and disconnected commuter rail.
Without strong political leadership the CHSRA has started to get bogged down in places, particularly on the Peninsula. Good leadership, and a stronger communications strategy, would have pushed back much harder against the Peninsula NIMBYs, calling them out as anti-environment nutjobs who put their own deluded notions of aesthetic value above safety, economic recovery, and the fight against global warming - all while doing more intensive outreach to reasonable Peninsula residents who generally like the idea of HSR but want to ensure it'll get built in a good way. And with a broken legislature almost totally unable to shepherd projects to completion - but having just enough power to kill good ideas and strangle worthy projects - it was obvious that the CHSRA needed some more robust communications and better political connections.
So in Mercury they'd get both. Adam Mendelsohn, Steve Schmidt and Fabian Núñez would be contracted to help sell HSR to the public. And it has to be said that Arnold Schwarzenegger did a pretty good job of promoting HSR last year whenever he spoke on the subject. I can see the logic to this.
All this being said, this is by no means a done deal. The board has to vote on the contract today and expect to see some "no" votes. There is clearly a power shift going on at the CHSRA, and those that did some of the hard work to keep the project alive and get it approved by the voters might not necessarily be pleased to see a governor that hadn't exactly been HSR's best friend suddenly want to take over. I can't blame them for feeling that way.
My own view is this: the CHSRA clearly needed to shift its approach now that it has the bond money, now that it has federal support, and now that it has to face some real and difficult battles at the project level. If Arnold, Mercury, Pringle, and their team have a sensible plan to navigate HSR through those waters, then I am willing to join up and support them for the sake of getting this built (which as everyone knows has always been my top priority on this blog).
Of course, I'll continue to watch them closely, and offer criticism where necessary. This blog has never been a rah-rah cheerleader for the CHSRA and we're not about to start doing that now.