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PR firm with ties to governor won’t bid on rail contract

A public relations firm with close ties to Gov. Arnold Schwarzenegger has pulled out of the running for a $9-million contract with California’s high-speed rail board after its successful initial bid was scuttled over concerns about the selection process.

Mercury Public Affairs had been chosen in September as the winner of the five-year public relations contract by a staff panel at the California High Speed Rail Authority. Rail board members expressed concern about the choice, however, after The Times reported that two of the three panelists had close ties to Adam Mendelsohn, a Mercury partner and former Schwarzenegger communications director.

Steve Schmidt, Schwarzenegger’s 2006 reelection campaign manager, is another Mercury partner, as is former Assembly Speaker Fabian Nuñez, a Los Angeles Democrat.

Some rail board members requested that the contract be rebid, and last month Mendelsohn said Mercury would seek the project again.

"Nothing has changed as far as we're concerned," he said then.
Now, Mercury has declined to reapply.

“Mercury followed the initial ... bidding process to a tee but we were ultimately sidelined because of internal politics,” Brian Jones, a Mercury spokesman, said in an e-mail. “We have subsequently decided to not  invest our time, energy or resources into a process we no longer have confidence in, nor believe in.”

The new winning bid for the contract is scheduled be presented to the rail board at its Nov. 5 meeting.

—Shane Goldmacher in Sacramento

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