In May, when the Anaheim City Council approved the distribution of 255 taxi cab permits to three companies, the jockeying for the city’s coveted taxi franchises appeared to be over.
In reality, the battle had just begun. And it is one that involves some of the city’s biggest political players.
The largest franchise with 155 cab permits went to Yellow Cab of Greater Orange County. California Yellow Cab and A Taxi Cab equally split the remaining 100 permits. But then at a June council meeting, California Yellow Cab presented what it claimed was new evidence suggesting that A Taxi Cab hid financial information from city leaders. California Yellow Cab requested a rehearing.
A city staff report states that nothing relevant was hidden from the council and recommended against the request. Nonetheless, the council majority — Kris Murray, Gail Eastman and Harry Sidhu — approved the re-hearing, which is set for Tuesday’s meeting.
Public records show that California Yellow Cab has a powerful ally in this fight.
Former Mayor Curt Pringle’s lobbying firm has been funneling information to the council on behalf of California Yellow Cab, according to emails obtained by Voice of OC through the California Public Records Act.
A High-Stakes Battle
The franchises were awarded after an exhaustive review in which a taxi advisory committee ranked the three companies based on a variety of factors, including experience, finances and fleet sustainability. Although the committee gave the highest score to Yellow Cab of Greater Orange County, the committee recommended that the three firms receive shares of the permits.
California Yellow Cab argues that A Taxi Cab should never have been granted permits because the firm didn’t submit a complete, audited financial statement. A Taxi Cab submitted its financial documents with missing pages, California Yellow Cab alleges.
A Taxi Cab also didn’t disclose that Mercury Casualty Co. had sued the firm for unpaid deductible payments stemming from traffic accidents. A Taxi Cab settled out of court with Mercury and agreed to pay the insurance firm more than $151,000 in monthly $10,000 installments, according to court records.
California Yellow Cab argues that because of missing pages in A Taxi Cab’s financial statement and the undisclosed lawsuit, A Taxi Cab’s permits should be revoked.
This issue has split the council down lines that have now become familiar, with Murray, Eastman and Sidhu agreeing that it warrants further scrutiny, while Mayor Tom Tait and Councilwoman Lorri Galloway say the city’s already thorough investigation should suffice.
“What if a family gets into one of these vehicles and they’re not paying claims. What is the family’s recourse if they’re in a cab that is not insured or protected?” Murray said at the June 19 council meeting. “I’m concerned about judgment issues that are coming to light after the fact … and I do think just on that issue alone a rehearing of all the facts is warranted.”
Tait countered that the council would be treading over ground that was sufficiently covered during the city’s initial review.
“You’re bothered by not having enough information. … I guess I’m bothered that we’re considering this at this point. We had months of analysis,” Tait said.
A Taxi Cab officials, meanwhile, indicate that the issues being brought up are irrelevant and are part of a larger effort to squeeze out the company so the franchises can be divided by California Yellow Cab and Yellow Cab of Greater Orange County, the two more politically connected firms.
“The taxi business is pretty crazy … there’s issues all the time. There’s nothing that hasn’t been taken care of,” said William Gray, an A Taxi Cab manager. “We’re financially viable, we’re very strong. I think we’re much stronger than our competitors.”
And Maryann Cazzell, an attorney representing A Taxi Cab, pointed out that Yellow Cab of Greater Orange County never disclosed that the company was the subject of a lawsuit from A Taxi Cab to force the Disneyland Resort to allow taxis from other cab companies on resort property, making Yellow Cab of Greater Orange County guilty of the same omission.
Cazzell notes that if A Taxi Cab’s lawsuit is successful, Yellow Cab of Greater Orange County could be on the hook for a “multi-million dollar loss.”
“We’re talking about a lot of money,” Cazzell said.
The Politics
Of the three firms, the only company without solid ties to Pringle or other members of the city’s political establishment is A Taxi Cab.
Peter Whittingham, vice president with Curt Pringle & Associates, emailed a copy of the insurance lawsuit against A Taxi Cab to the council on June 18, according to public records obtained by Voice of OC.
Whittingham also emailed Eastman a list of seven points outlining why A Taxi Cab should be disqualified. The points focused on the insurance lawsuit against the company.
It’s no secret that Pringle still has clout with the council majority. The former mayor, whose eight-year tenure ended in 2010, is seen as closest to Murray. Among his clients are many who have business before City Hall, including Disneyland and Bill O’Connell, the hotelier who was granted a $158-million tax subsidy to build two four-star hotels.
O’Connell and Yellow Cab of Greater Orange County President Larry Slagle were part of a group that in 2010 controlled the political action committee for Support Our Anaheim Resort (SOAR), which spent tens of thousands of dollars, much of it from Disney, to help elect Eastman, Murray and Tait.
SOAR is seen as having tremendous influence in the city. In an email to a client, Pringle called the organization “very important.”
“This political action committee was critical in electing three candidates in the last city election and will be even more critical in this year’s election,” Pringle wrote.
Counted among the members of SOAR’s advisory committee are Eastman, Murray, O’Connell, Slagle and the general managers of the Hilton Anaheim and the Anaheim Marriott, two hotels involved in a preferred provider arrangement whereby only Yellow Cab of Greater Orange County is allowed to stage taxis on hotel properties.
Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek. And add your voice with a letter to the editor.