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Roundtable: Underground Market Taxi Permits, Scathing NCTD Audit, Deported Parents

June 14, 2013 1:21 p.m.


Alison St. John


Amita Sharma, KPBS News

Brad Racino, inewsource

Jill Replogle, KPBS Fronteras Desk

Related Story: Roundtable: Underground Market For Taxi Permits, Scathing NCTD Audit, Deported Parents


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

ST. JOHN: On the Roundtable today, there are more taxi drivers than taxi permits in San Diego. We analyze how the scarcity has led to a lucrative underground market, and a disturbing audit of the North County Transit district reveals several problems in several areas. And what happens when immigration authorities separate parents from their children? Joining me are Amita Sharma KPBS news. Brad Racino of Investigative News Source, and Jill Replogle of the KPBS fronteras desk. A robust underground market exists in permits to operate taxicabs in the 73 of San Diego. There are more people who want to be cabdrivers than there are permits to drive the cabs. Amitha, what's the going rate for these permits?

SHARMA: $160,000. It can go as high as that.

ST. JOHN: And how does the system work?

SHARMA: Well, the way the underground works is if person A has a taxi permit that he either bought from someone else or was lucky to get to the city for a couple hundred dollars and he decide he's doesn't want it anymore, he can turn it around and sell it on this underground market for as high as $160,000 tax-free, and these are public property. And officially, these permits are changing hands from seller to buyer by paying a $3,000 fee to the metropolitan transit system, which regulates the taxi system in San Diego through a process called a transfer. But again, behind the scenes, money is changing hands. Big sums of money are changing hands from the person who is receiving the permit. He is paying the person who is transferring the permit tens of thousands of dollars. And inewsource took a look at some of these transfers, and their investigation showed that from 2009 until April of this year, there were 326 transfers.

ST. JOHN: So how does this affect consumers and the price of a taxi ride?

SHARMA: Taxi drivers say, look, if the person is paying up to six figures to get into the taxi business, they're going to keep their cab rates high. And in fact, are San Diego has some of the highest rates, cab fares in the country. The second outgrowth of this is a person who can't afford to pay six figures for a permit but still wants to be a taxi driver has to then lease the permit for anywhere between $1,200 a month in cash to $1,600 a month, and that doesn't include insurance, it doesn't include gasoline. And I spoke to one driver who after working 12 hours a day, seven days a week, at times only takes home $1,000 a month after paying his lease rates, his insurance, and gasoline.

ST. JOHN: So the people you spoke to in the industry said it was because of a shortage of permits; is that right?

SHARMA: That's right. So there are 993 permits held by 418 individuals and cab company owners within the City of San Diego. And there are about 1,850 drivers looking for work. And the city, the metropolitan transit system hasn't -- the city hasn't issued new permits since a couple of years ago, but only 125 new permits have been issued since the metropolitan transit system took over in 1989.

ST. JOHN: Brad, you had a question?

RACINO: It's hard enough. You should be commended for doing this investigation. But can you talk about how MTA responded throughout the course of this investigation?

SHARMA: Well, it really transformed throughout the investigation. Initially, I had informal talks with them, and they were very helpful in terms of getting facts and figures. I had a background conversation with them, met with them in person about five or six weeks ago. And after that meeting, a head administrator sent me an e-mail saying if you have questions, contact me. But when it came down to doing a tape-recorded interview with them after I had gotten all my information, after interviews with the taxi drivers and other people, they said they wouldn't sit down. They didn't want to do a recorded interview.

ST. JOHN: Now the city appears to be stepping in, and the mayor has a plan.

SHARMA: The mayor calls this underground market a black market. And he says he's very unhappy with it. He says MTS's oversight has been lax, and he wants the city to take over regulation.

ST. JOHN: Who's in favor of that plan and who's against it

SHARMA: Well, it's hard to tell! I think taxi drivers want the city to take it over, but the city has its own history with the tax industry. In 1970, a lot of people probably don't remember, but in 1970, several City Council members and the mayor were arrested, and they were accused of taking bribes from a cab company owner. Eventually they were acquitted, but there has been a huge challenge within this region on how to show favoritism to the powerful cab company owners and how to maintain a balance, a certain number of taxi permits in circulation so that taxi drivers can find work, so there aren't too many permits in circulation and so that no one is being exploited.

ST. JOHN: Did you have a question?

REPLOGLE: Well, you mentioned there are all these cabdrivers looking for work. Are they looking at expanding the number of permits available? And would that --

SHARMA: Well, right now, there's a cap on the number of permits. And MTS commissioned a study in 2010, and that study, they concluded that there was an oversupply of permits in the market. But cabdrivers say, look, they need to lift that cap a little bit. And I think in my brief conversation with mayor Filner, he's talked about doing that, he says again we don't want cabdrivers to be -- for there to be a glut of permits and drivers out there, but we do need to achieve a balance.

ST. JOHN: What does the MTS feel about losing control of this?

SHARMA: I just had very brief talks with them, and they didn't seem to be too bothered by it. But getting back to the underground market. MTS has been aware of this underground market. In the 2010 study they commissioned, it concluded profit-taking has gone on in a grand scale in the market. And that MTS has the power to put a stop to it. And that was the question we wanted to pose to MTS. The spokesman said basically MTS, the board hasn't really considered the issue, these permit transfers, and hasn't taken a position on it. However, I think a lot of people would argue that by not taking a position on it, they're taking a position.

ST. JOHN: So it sounds like it's difficult to know which agency might be able to regulate this market in a way that was above board.

SHARMA: Well, that remains to be seen. But I think there is a pretty strong push to get regulation, to get oversight transferred back to the City of San Diego. How that plays out with the City Council is anyone's goes.

ST. JOHN: Okay. Amita, thank you so much.


ST. JOHN: The North County Transit district, the agency that operates the sprinter light rail and the buses in North County does almost all of its business through independent private contractors, including security and maintenance. The sprinter had to be shut down for several weeks this spring because of problems with the brake system. Brad, you reported on major problems with these private contractors, and now this audit is verifying some of your conclusions.

RACINO: The audit was done by a company called SCNH. And they were an independent audit. What they found were 19 deficiencies within NCTD's contracts administration department. So this is the department that award all these major contracts. They found problems ranging from how these contracts are monitored to how key employees speak to each other, how the company is just buried in paperwork, how they have no follow-up. So everything from A to Z they found a problem with.

SHARMA: Brad, this report was published last September but only now made public. Why the delay?

RACINO: We honestly don't know. This was published in September 14th of 2012, but it wasn't presented to the board and the public until last month. I talked with two board members, and they both very muched this was the first time they had ever seen it.

ST. JOHN: Why should the public care?

RACINO: This is a major department. This oversees all of the contracts with the private companies that perform all the district's services. So from operations of maintenance to security to transit operations. So these are the public that are responsible for all of this. And as you said before, we've looked into a bunch of different issues, and this all ties into where that problem lies, where the main problem is seems to be this department.

ST. JOHN: You had done a story about security, and how the contractor hasn't provided the training that was a part of the contract.

RACINO: That's one of the examples. NCTD performed an audit after our investigation and found everything to be true, that this company hadn't been providing training. These guys were supposed to have first aid training, almost like peace officer training, but none of this was happening. And the same thing with the lift audit. Their service board, disabled partiallyings, they found the contractor providing that service was doing everything wrong. They were dropping off passengers hours early, picking them up hours late from their work sites. They weren't monitoring their drug and alcohol policy. They didn't even know where the local office was located of their contractor.

ST. JOHN: And what amount of public money are we talking about here? This is not small change.

RACINO: Tens of millions of dollars. Their extense revenues this year are estimated to be around $90 million. Plus hundreds of millions in capital projects from the government and the state.

ST. JOHN: Matt Tucker is the CEO of the North County Transit district. What is he saying about how he would address it?

RACINO: He hasn't talked to us since our last story. We wrote in and called and e-mailed to set up an interview with him about this audit. He refused to comment or provide any response at all. He did say some things at the last board meeting about the audit and said that they were dressing some deficiencies we went in and requested their management action plan. They must provide it because of the audit, we asked for it, and it doesn't exist.

ST. JOHN: What about the board?

REPLOGLE: Yeah, you think they would be outraged by this.

RACINO: You would think that. We posted an article. You can see all the cities, and who they represent, and whether or not they responded. We had one board member go on the record with this story. John aglera. And he said the story was eye opening. But the rest of them haven't said anything. Bill Horn who's been with NCTD for many, many years, he spoke to us once months ago on the eve of the sprinter shutdown. He refused to comment on this story. And he's refused to comment on every other story we've done.

SHARMA: Has there been any reaction from the board since you basically outed them and said these folks simply haven't commented?

RACINO: None at all.

ST. JOHN: But you have had reaction from to this audit from the board of the metro link?

RACINO: Right. 19 looks like a lot. So we asked the group who performed the audit, is that a lot? They wouldn't tell us. So I brought it to a board member in L.A. Richard Katz sits on the metro link board. He read it and was astounded. He said if any of these things had happened in his agency, are heads would be rolling, people would be fired, and they would be cleaning house. He said every one of these deficiencies is a serious issue. They're all red flags, they need to be looked at, and he's astounded that nothing is happening.

ST. JOHN: So who is sitting on the board at the North County Transit district?

RACINO: They are all elected officials. They represent cities, Vista, Oceanside, San Marcos, Solana Beach. They're all mainly council members within those cities. One is a mayor, one is a vice mayor, and Bill Horn who is the supervisor of the county.

ST. JOHN: And the CEO told the board he is addressing it, but you cannot find any written plan?

RACINO: Nothing. And this was eight months ago that this was issued, this report. And to add to that, we went up last month to go through some contracts for this story. One of the deficiencies noted was that NCTD just has way too much paperwork. We asked to see some contract, and they brought in 15-20 boxes full of paperwork. And they had to call managers to come down and search through the boxes to try and find them. Eight months later, that deficiency was not addressed.

SHARMA: Who ultimately has authority here? Who oversees NCTD? What about regulators?

RACINO: Right. You have the board who oversees NCTD, but who oversees the board? The transit administration. And we just got word an hour ago that they have now taken an interest in this.

MAUREEN ST. JOHN: That is a very interesting development. One of the issues is this issue of sole source procurement.

RACINO: They're a method for public agencies to acquire a contractor. They issue them without competitive bidding, so it's when a certain company provides a service that no other companies can provide. The government agency then awards the contract to them without going through a public bidding process. What the audit found was that NCTD was issuing a ton of these, way too many, and it was a liability legally and financially for the agency to keep doing this. We found at least ten of their contracts issued since this audit. One of them was very questionable, involved $50,000 in payments to a communications PR firm, and the firm actually was the former employer of the woman who awarded that contract from within NCTD.

ST. JOHN: So from the public's perspective, do you think that there is anything legally binding on the agency? It's a public agency to respond in writing to this audit and provide some plan for how they're going to address these deficiencies?

RACINO: As far as legally, I honestly don't know whether they're legally required to respond to an audit. They did pay the auditor with district money to perform it. So I don't know what their obligations are for that. They do have a responsibility to the public, to the taxpayers for addressing key deficiencies found.

ST. JOHN: It is to their credit that they paid the contractor to come up with this audit. Then the question is --

RACINO: Right, why they did that. A lot of times these audits are required for certain divisions to maintain funding for the federal and state government. It might be written in the contract. I don't know what the case is with this one is why it was performed.

ST. JOHN: Where is your reporting going in the next few days?

RACINO: We're just keeping up.

ST. JOHN: Okay, well, thanks so much for keeping an eye on this.


ST. JOHN: Our community sitting on the border here is particularly affected when parents are separated from their U.S. born children as a result of immigration enforcement. Jill, your stories of parents who have been deported and their children who are left here are heart-wrenching.

REPLOGLE: I interviewed this woman named Tanya Velasquez, and she lived in Anaheim for about eight years. And she was detained by officers with her husband who she admitted to me did sell drugs. They were both thrown in jail. She was pressured by her lawyer to pled guilty to a misdemeanor, even though she's never used drugs. And she said she didn't realize that was land her in deportation proceedings, which it did.

ST. JOHN: She did agree to leave the country voluntarily. But isn't this related to some of the suits that the ACLU are raising?

REPLOGLE: There's a couple things that could be wrong with her case. Criminal lawyers have to, by law, tell their clients if there's an immigration consequence of pleading guilty. There's a Supreme Court case a couple years ago that found that it would be ineffective council to not tell them. The other thing is, and it's not clear, but the ACLU just filed a class action lawsuit about a week ago on behalf of deportees who were pressured or coerced or forced to sign what they call voluntary departure. And the consequences of that are when you're on the other side of the border, you can't come back to the United States for ten years. There's a 10-year bar. And many people had no idea, they were never told this, and they were pressured to sign.

ST. JOHN: So when did she get deported and where did she go?

REPLOGLE: She landed in Tijuana may first. And she has just recently started working through the child welfare system to regain custody of her 3-year-old daughter who ended up staying -- she had the girl stay with a friend when she was put in jail, and she's been staying with this friend for eight months.

ST. JOHN: Brad?

RACINO: How big of a problem is this? Are there a lot of cases like hers?

REPLOGLE: There's an organization called the applied research center, and they've found there's probably about 5,000 children of deported parents who are in the foster system. Not all of those parents are trying to get their kids back. But probably a good number of those kids have parents who are in Mexico or other parts of the world trying to regain custody of their kids.

SHARMA: I understand why U.S. child welfare services folks are involved in this, because the children are U.S. citizens. But have Mexican authorities stepped in to represent the interests of these parents?

REPLOGLE: The American child welfare system only has jurisdiction in the United States. So they have to work with the Mexican welfare system on these cases. Tanya, everything she does there, she has to get a house, have a job, probably do some substance abuse therapy. That goes through the Mexican child welfare system that. I sign off on it and pass it onto the American system. There's another couple that I interviewed who has had a difficult relationship with the American social worker working on their case, and they feel has sort of Stonewalled their case. And the Mexican consulate is in with them see figure they want to put a complaint against the social worker. Of so they do sometimes work on behalf of the parents.

SHARMA: Right. So who has ultimate authority? Who makes the decision on whether the children returns to their parent?

REPLOGLE: A judge in the United States. A family court judge in the United States.

ST. JOHN: So Brad asked you about how many children there might be in foster care. But how many of the people being deported actually have U.S. born children that are being left behind in this country and in our community?

REPLOGLE: 1-4 parents, it's estimated, and this is between 2010 and 2012, about 1-4 parents had U.S. citizen children. Not all those kids are in foster care. Many kids get left behind with other parents, with other family members. Kids only end up in foster care if they were already in the child welfare system. Some kids of deported parents end up in child welfare because they didn't have anywhere to leave the kids.

ST. JOHN: How difficult is it for a parent who is on the other side of the border to fight legally to regain custody of their child?

REPLOGLE: It's really hard. Just imagine they can't be present for any of their family court proceedings. Sometimes they'll do a situation where they might be able to Skype in or begin a teleconference. But being physically present and being able to sort of state their case in person is really important. They can't be around the social worker, they can't visit with their kids in many cases. San Diego and Orange County have a special deal, if you're deported from this area, you're lucky in a way because they can actually go visit with their kid at this little room on the border.

ST. JOHN: I was going to ask you about that! Where do they meet?

REPLOGLE: It's in the department of Homeland Security building. The Mexican consulate has a room available, and they make it available for these visits. But this couple, they go about once a month and have a visit with their kids there.

ST. JOHN: Is there any kind of legislation coming up in the near future that could address this issue?

REPLOGLE: The comprehensive immigration reform bill in the Senate has a couple things that would start to deal with this. Right from the beginning, there was an amendment that was put in that would at least make sure that immigration authorities know if people in deportation proceedings have kids. Because there have been cases in the past where no one ever asked them if they had kids. The kids might have been home alone. Terrible stories that have come out of that. So the bill would require immigration agents to ask parents if they have time to find arrangements for the kids. And while they're in detention in the United States, to allow them to participate in their cases with social workers. And deportees who have U.S. citizen kids, they'll get the opportunity to at least apply to come back to the United States legally. Under the bill as it currently stands, they would be able to apply to come back.

ST. JOHN: And your stories really covered the parents that are deported. But talk about the kids who are left here in San Diego.

REPLOGLE: People have done work on just what a huge emotional toll this is for the kids. Back in this ACLU lawsuit. There was a woman that spoke here at KPBS last week who -- her husband is a plaintiff in the lawsuit. He was deported to Tijuana. They have three kids who were in San Diego, small children who obviously don't have a dad from one day to the next. And they don't understand why this is. They go visit him once a month. Just imagine from one day to the next, your family is split apart and at this point, there's no recourse.

ST. JOHN: This is a part of immigration law that I think is really affecting our community. And not all the children are endingly up in foster care. There's a lot of children who are left in very vulnerable circumstances.

ST. JOHN: With grandparents, with friends, in some cases on their own if they're old enough. A lot of parents -- some parents do take their kids back to Mexico. But a lot of the kids are old enough that they don't want to go back. They're Americans. And in other cases, the parents think it's probably better if they stay here.

ST. JOHN: Okay, thank you so much for covering this. That wraps up another week of stories here at the Roundtable.