ON JAN. 25 an arbitrator hired by the city of San Francisco cleared giant construction firm Hensel Phelps of charges that it had discriminated against minority-owned Liberty Builders on a contract at San Francisco International Airport. The arbitrator, Lani Bader, concluded that the city's original investigation into the dispute was legitimate and that Mayor Willie Brown had not intervened to squelch Liberty's allegations.

The decision is difficult to understand, much less to support, and it demonstrates that the city's contract-arbitration system is badly in need of reform – as is the entire process by which the city monitors compliance with the laws designed to encourage minority businesses.

Liberty filed a complaint with the Human Rights Commission in 1997 charging that Hensel Phelps had cheated the Bayview-based company out of almost $3 million in airport contracts. Bader, who was paid $40,000 by the city, discounted overwhelming evidence that Brown had personally directed the HRC staff to rule against Liberty's complaint (see "SFO Cover-Up," 8/1/01). Not surprisingly, on Feb. 14 the HRC voted to accept Bader's decision.