Friday, April 07, 2006

High Five Project built with greasy palms and sticky fingers.

High Five official fired over funds

He defends receiving $24,000 from company for barbecue expenses

April 7, 2006

The Dallas Morning News
Copyright 2006

The Texas Department of Transportation has fired one of its top engineers after investigating allegations that he mishandled funds related to the High Five interchange project.

Praxedis "Pete" Garza, once a rising star in the department, on Monday was relieved of his job as an area highway engineer supervising dozens of projects around northwest Dallas.

The termination letter from Bill Hale, Dallas district engineer, said Mr. Garza violated several department policies governing cellphone use and funding for occasional barbecues.

As area engineer over the High Five project, Mr. Garza was in a position to oversee Zachry Construction Corp.'s performance and recommend fines for contractual violations. Mr. Garza and a spokeswoman for Zachry, a San Antonio-based company, both said they had an informal arrangement to pay for the barbecues, which were designed to commemorate construction milestones and boost morale.

The informal arrangement called for Mr. Garza to pay all of the expenses for some barbecues from his personal bank accounts. Mr. Garza said he would then submit receipts to Zachry, which would issue a company check payable to him to cover all of the costs.

Zachry officials said they paid Mr. Garza a total of $24,000 over several years to reimburse him for barbecue costs.

"This was between me and Zachry," he said. "The state did not pay for anything. The contractor paid for all the barbecue costs, and me and the guys did all the work."

State officials said the arrangement violated long-standing policies against direct financial transactions between highway contractors and state employees.

The costs should have been split equally, with the contractor paying all barbecue expenses initially and the state reimbursing the contractor for half the cost, according to transportation department spokesman Mark Ball.

"The employee's acts were policy violations that ultimately led to his termination," he said.
Mr. Garza said he did most of the work cooking and preparing the meals for about 100 people. Therefore, he said he felt justified in accepting the Zachry checks for 100 percent of the barbecue costs.

"We put in labor and other costs," Mr. Garza said. "We weren't getting free food."

In some cases, Mr. Garza said, transportation department bookkeeper Rusty Everitt used personal funds to buy barbecue supplies. Zachry representatives would then issue Mr. Garza a company check, which he in turn would sign over to Mr. Everitt.

Mr. Ball, the transportation department spokesman, confirmed Thursday that Mr. Everitt had been under investigation and also was fired.

Mr. Everitt could not be reached for comment Thursday afternoon.

Mr. Garza said he has receipts for all expenses. Regardless, payments from contractors directly to state employees should not have occurred, state officials said.

'Controls in place'

"I don't believe the contract said this was the way it should be handled," Mr. Ball said. "We have controls in place. If there was a gentleman's agreement in place on how that was done, that was not department policy."

Zachry officials agreed with Mr. Garza that two programs existed – a 50-50 cost-sharing for official celebrations and the arrangement in which the company reimbursed Mr. Garza personally for barbecues.

Expenses in the formal program totaled $38,000 during the 4 ½ -year High Five project at LBJ Freeway and Central Expressway, company spokeswoman Vicky Waddy said. Those costs were split evenly between Zachry and the state, she said.

Zachry also paid another $24,000 directly to Mr. Garza to pay for all the costs for the informal barbecues, Ms. Waddy said.

"It was payment based on expenses that were submitted with appropriate backup receipts," Ms. Waddy said. "We have backup materials that we submitted to TxDOT to support the checks we wrote to him."

The $24,000 was considered part of the "administrative costs of doing the job," Ms. Waddy said. The company will discuss the arrangement if the transportation department has a problem with it, Ms. Waddy added.

Transportation department officials said the investigation into Mr. Garza began when Mr. Hale, his boss, grew concerned about Mr. Garza's slow responses to routine matters. He ordered a management review of Mr. Garza and his office operations, which consists of 33 road projects valued at $405 million.

Cellphone concerns
The management review and a subsequent audit also revealed cash management concerns regarding mobile phone bills.

Zachry bought cellphones for state and company employees on the High Five project. Zachry paid the bills and then submitted invoices to the transportation department for reimbursement.

Problems arose when state employees exceeded the maximum number of minutes allowed on their plan, Mr. Garza said. He said the transportation department reimbursed Zachry only for its employees' normal cellphone usage. Mr. Garza said he and Mr. Everitt, the state bookkeeper, collected the overage charges.

Those payments, usually in cash, were supposed to go back to Zachry as reimbursement, Mr. Garza said. He said he and Zachry officials agreed that he could spend the money on donuts or informal barbecue dinners.

"The cellphone money was between me and Zachry. The barbecue money was between me and Zachry. This had nothing to do with TxDOT," Mr. Garza said.

Zachry officials had a different version of the cellphone arrangement.They said the state reimbursed the company for all of the mobile phone expenses, including any overage charges.
"What Mr. Garza did with the charges for employees who exceeded the minutes allowed on the plan, I don't know anything about it," Ms. Waddy said.

Mr. Garza said his supervisors also expressed concerns about him allowing Mr. Everitt to take a state vehicle home after work hours. He said the initial investigation began after several employees became upset about the vehicle use.

Top officials in the Dallas office of the transportation department reviewed all of the northwest Dallas area office projects that Mr. Garza supervised. They said last week that they found no indications that quality or safety was compromised.


© 2006 The Dallas Morning News Co