Dirty Pool

Because of Lori's ownership stake in both companies, C.M. Construction had violated city affirmative action rules, Alvarado Construction claimed. Indeed, city contracting regulations do not allow a disadvantaged prime contractor to meet its quotas by using a minority- or woman-owned business in which it holds ownership. The reason is easy to understand: Without such a prohibition, construction companies would form "minority-owned" or "women-owned" shadow companies in the names of their spouses or children, defeating the intent of these affirmative action programs, which is to spread government-contracting dollars to as wide an array of legitimate disadvantaged firms as possible.

Despite the appearance of common ownership, the Human Rights Commission denied Alvarado Construction's protest, saying that, according to the Chiangs, Lori had resigned as an owner of C.M. Construction. Public records on file with the California Contractors State License Board show, however, that Lori resigned as an owner of C.M. Construction on June 25, 1999, a month after the pool contract was won by C.M. Construction, and two weeks after Alvarado filed its complaint.

The connection between the prime contractor and a major "disadvantaged" subcontractor is not the only affirmative action question raised by the MLK pool project.

City contracting rules require Human Rights Commission-certified subcontractors, such as OWA Steel, to perform the work themselves, if they are being used to meet affirmative action quotas. Hiring other companies to do the work -- that is, subcontracting the subcontract -- is not allowed. It appears, however, that OWA Steel did just that. In an interview last week, Steve Romak, a principal of Oakland-based Romak Iron Works, said his company performed all of the structural steel work on the MLK pool under a subcontract with OWA Steel. Romak said he did not know that C.M. Construction used a subcontract with OWA Steel to meet its women-owned business quota. Romak Iron Works' Internet site also cites the steel work at the MLK pool as one of the firm's projects.

Romak Iron Works is not eligible to be certified under San Francisco's affirmative action program because, among other things, it is not located in San Francisco.

The city's decision to uphold the contract award to C.M. Construction, despite the strong appearance that Human Rights Commission regulations had been violated, has had another consequence. "Alvarado made a corporate decision not to do business with the city again," says Rick Dion, area manager of Alvarado Construction. Dion says that decision is based on his belief that getting a Public Works contract in San Francisco is dependent upon political influence, that Chiang was pre-picked for the pool job, and that rules were broken to favor Chiang and his wife.

Ed Lee, director of the Department of Public Works, did not return repeated telephone calls requesting comment.

Maurice Williams, deputy chief of the Bureau of Construction Management, made light of the matter. "Chiang better not have given the steel contract to someone other than his wife. That would make his home life too hard," he chuckled.

Others were less amused.

Vince Courtney, an attorney for the San Francisco Building Trades Council, spoke with a directness unusual for an advocate of union members who work on city Public Works projects: "What's going on here is political. Public Works steered the contract in Chiang's direction. City employees steer contracts to firms using minor technicalities to knock out their competitors."

The King pool building looks like a gun emplacement: It's easy to imagine a cannon poking out of its top, swiveling for targets while anchored in 8 million pounds of dull gray concrete.

Aesthetics aside, concrete has proven to be the bane of the troubled pool project.

The city engineer originally estimated concrete work at the pool -- which does not include the pool shell itself -- at $830,000. Chiang's low bid allowed just $533,000 for concrete work.

In his bid, Chiang listed Hoi's Construction Inc. as the subcontractor that would do the concrete work. Shortly after ground was broken, Hoi resigned and Chiang replaced Hoi with a Los Angeles-based firm, Creative Construction & Design, owned by one Frederick C. Taylor. Don Alameida, the city architect in charge of building the pool, says he had never heard of Taylor, or his company, and was surprised when Chiang hired him.

Public records show that Taylor ran his company, now apparently defunct, out of the Bayview office of Business Development Inc. Calvin Hayes, the owner of Business Development Inc., says he shared an office with Taylor for several years. "I tried to help him out," says Hayes. "He still has stuff here." Hayes declined to respond to questions regarding the nature of his financial relationship, if any, with Taylor.