AP Exclusive: Moth-spraying PR deal suspended amid questions

SACRAMENTO--State officials struggling to convince critics about the safety of aerial spraying to control an invasive moth awarded a $500,000 no-bid contract to a prominent public relations firm with ties to Gov. Arnold Schwarzenegger.

E-mails obtained by the AP revealed a senior state contracting official questioned the arrangement. He said it was difficult to justify a public affairs campaign related to moth spraying as an emergency, which entitled the deal to be exempted from normal contracting rules designed to limit favoritism.

After The Associated Press published a story Wednesday detailing the deal, Schwarzenegger press secretary Aaron McLear said the contract had been suspended.

The $497,000 contract was awarded last November to Porter Novelli, a leading international public relations firm with an office in the state capital, after hundreds of residents complained about breathing problems and other health effects from the spraying.

The California Department of Food and Agriculture invoked emergency powers to award the contract without competition. Typically, the government would advertise such contracts and allow firms to bid for the job.

"I can see how spraying would be an emergency. But I am having some difficulty with why CDFA could not get bids or go through (a national competitive bidding) process for the public relations work being undertaken by Porter (Novelli)," Henry D. Nanjo, a senior counsel with the Department of General Services, wrote in an internal e-mail to a state contracting analyst and an acquisition manager. "In addition, I don't have anything by which I can judge the reasonableness of PN's rate."

Nanjo told the AP it was the first time he had been asked to approve a no-bid contract for public affairs work.

McLear said the governor's office had asked Food and Agriculture officials last Friday to conduct an independent review of the contract because they were concerned about the price and effectiveness of the arrangement. He produced an e-mail indicating the agency had taken steps by Monday to suspend the contract.

That was after the AP had begun asking questions about the deal.

"The contract has been suspended," McLear said. "For legal considerations, it has not been rescinded yet. But it is over."

McLear said $66,183 has been billed so far, while another $30,000 may be owed for work already completed. The state expects federal reimbursement for the cost.

The series of e-mails related to the contract were obtained through a California Public Records Act request.

Under the deal, Jeff Randle, a frequent campaign and political adviser to Schwarzenegger, was promised a share of the work. Mitch Zak, Randle's partner, said the firm wanted to win the full contract but lost to Porter Novelli. The firm later was contacted by Porter Novelli to do subcontracting work, as state officials promised in internal e-mails.

Donna Lucas, former chief of staff to first lady Maria Shriver and a member of Schwarzenegger's inner circle during his first years in office, also was contacted to submit a proposal for a public relations campaign, the e-mails show.

Her name originally appeared alongside Porter Novelli in a summary of the contract but was scratched off.

Lucas also is affiliated with Porter Novelli, which lists her as counsel for strategic communications. She said she declined offers to work on the contract and does not know why her name appeared on the original agreement. Lucas said she has not done any work on the apple moth campaign.

Nanjo told the AP he could not remember many details of the contract he began looking at in October but said he received an e- mail and a couple phone calls from food and agriculture officials that ultimately satisfied his concerns.

"I would not have approved it unless questions were answered to my comfort level," he said.

A Department of Food and Agriculture spokeswoman defended the contract earlier Wednesday.

Nancy Lungren, the deputy secretary for public affairs who first solicited proposals for the work from Randle and Lucas, said it was necessary for the state to begin communicating quickly with the public amid a growing wave of concern over the spraying.

"I am very familiar with Donna and her work," Lungren said. "It's all word-of-mouth when you're in PR. You know who the good other people are. That's how it works. ... People probably think there's some political thing here, but there's really not."

She said the U.S. Department of Agriculture is reimbursing California for much of the cost of the Porter Novelli contract but could not say how much has been spent or how much the state has sought in reimbursement.

State agriculture officials ordered aerial chemical spraying last year to combat the light brown apple moth, an unintended import from Australia that state officials say threatens more than 2,000 varieties of California plants and crops.

Opponents have called for a halt to the spraying while scientists study whether it is harmful.