Paul Kozakiewicz: Time to End Monopoly on City's Legal Advertising Contract

City residents have an opportunity this November to correct a problem that has resulted in a robber-baron monopoly at City Hall. The situation was created by a "sweetheart deal," resulting in scarce taxpayers' money being taken away from important city services.

Proposition K, on the Nov. 5 ballot, would restore competitive bidding for the city's legal advertising business. The proposition was put on the ballot by four members of the SF Board of Supervisors after red flags were raised at hearings concerning the city's posting of public notices.

Since 1997, only one newspaper has bid for the city's advertising business for non-consecutive publications, the SF Independent, published by the Fang family. In order to jury-rig the contract, the family sponsored and passed Proposition J in 1994, creating a formula to award the contract. The formula favored the Independent over all other publications.

In 1994 the Independent lost the contract to the lower bid of the SF Examiner, causing the Fang family to hustle up political supporters for its proposition. Voters approved the deal because it sounded good at the time ­ there were not a lot of supporters for the Independent's main competitors, the SF Chronicle and SF Examiner.

In 1993 the Independent charged the City $2.13 a line for legal advertising. Two years later, after the passage of Prop. J, the Independent was charging $3.38 a line. By 2000, the Independent was charging the City $4.78 a line ­ more than doubling the price in eight years.

The escalating prices charged by the Independent caused total city costs to climb from $408,000 in 1993 to $1.1 million in 1998.

The supervisors also had a problem with the Independent's circulation after the Fang family took over the SF Examiner, with a $66 million subsidy, in late 2000. Shortly after taking over the Examiner, the Fangs decided to roll its Saturday edition of the Independent into its Saturday edition of the Examiner. The move limited the public's access to legal notices because only a limited number of people who purchased an Examiner got the ads.

The Fang family, who mastered the art of assassination journalism, is not taking the situation lying down. Already the columnists at the family's three San Francisco publications (they also publish Asian Week) are taking aim and crying poverty. The publications' columnists, including portly Warren Hinckle, Samson Wong and Frank Gallagher, are taking potshots at the supervisors and any other person or group that opposes the Independent's monopoly position.

And, despite getting a $66 million subsidy from the Hearst Corporation when the Fangs took over the Examiner, $1.1 million in low-interest loans from the federal government and a monopoly on the city's legal ads, the Fang family is lashing out in its publications, claiming there is some plot to put the newspaper out of business for its political opinions. The Independent can still get the contract, it just has to earn it fair and square.

There should be competitive bidding for all major city contracts. When only one company bids, it results in a monopoly and higher prices ­ exactly the result we got with the Fang's 1994 proposition.

When tax dollars are squandered, important city services, such as services for youth and seniors, get cut. If competitive bidding is reinstated at City Hall, there could be hundreds of thousands of dollars freed up for those important needs.

Please vote yes on Prop. K.

Paul Kozakiewicz is publisher of the Richmond Review and Sunset Beacon newspapers.

 

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