Sunday, June 10, 2007

"People lose faith in the contracting process with scandals like this."

Harris County weighs tighter ethics rules

Move comes as vendor-funded events revealed with toll road director's exit


Houston Chronicle
Copyright 2007

After revelations about the toll road authority's contractor-funded parties, top officials said the county may need a stricter code of ethics that would prohibit employees from accepting improper donations from vendors.

Commissioner Jerry Eversole has asked the county attorney's office to review the county's ethics code and present options on how it could be strengthened.

The code of ethics, which essentially mirrors state criminal laws regulating contract awards and acceptance of gifts, should set higher standards than are required under state law, County Attorney Mike Stafford said.

"The penal code shouldn't be the standard," he said. "That's a minimum."

The kind of cozy relationship suggested by having contractors and vendors pay for parties and events for toll road authority employees is not uncommon among local government agencies.

• Last September, the Houston Independent School District board of trustees was criticized after holding a "miniretreat" at Vic & Anthony's Steakhouse downtown, at a cost of $1,786 — about $150 a person.

At the request of a board member, the law firm Bracewell & Giuliani, which regularly provides HISD with legal services, picked up the bill.

• The city of Houston annually solicits donations from individuals and city contractors to pay for a birthday celebration fundraiser that in the past has helped pay for library books and park improvements.

• And elected officials regularly seek political contributions from companies and individuals who do business with the bodies on which the officials sit. In addition to using the contributions for campaigns, officeholders can use leftover donations for almost anything while in office.

The issue arose last week after toll road authority director Mike Strech was forced to retire amid revelations he and his employees had solicited contributions from county contractors to pay for at least one party and a golf tournament.

Auditor investigating

According to county investigators, toll road authority employees collected nearly $60,000 from vendors who do business with the agency. Of that, $45,000 was spent on an employee picnic at SplashTown last summer. So far, investigators have found two off-the-books bank accounts connected to such events.

District Attorney Chuck Rosenthal said last week that no crimes were committed. But the county auditor's office now is investigating whether the toll road authority relied on contractor donations to hold parties, summer outings and golf tournaments that authority employees took part in for free during the past five years.

"People lose faith in the contracting process with scandals like this," said Craig McDonald, director of Texans for Public Justice, a nonprofit group that promotes campaign finance reform. "It is a case of corruption in the contracting process. There ought to be firewalls that prevent that kind of solicitation of contractors."

The public shouldn't underestimate the good will that contractors can generate by throwing parties for public officials who can influence contract awards, said Tom "Smitty" Smith, director of the Texas office of Public Citizen, the consumer advocacy group founded by Ralph Nader.

"Patronage and parties are the heart and soul of politics in Texas. We have passed reforms over the last 100 years, but loopholes are always found," he said.

Paying off for contractors

The county should tighten ethics regulations, and the Legislature should prohibit county employees who can influence contracts from taking donations from contractors, Smith said.

He added, "Are you going to award a contract to a person who throws the best parties or gives the biggest contribution? Contractors make their contributions because they know it pays off for them."

County officials said their response to the revelations of the toll road authority's actions shows the county can clean up its own house.

Harris County Public Infrastructure Department Director Art Storey forced Strech to retire, brought in the county and district attorney's offices and informed employees of the toll road authority not to solicit donations from contractors.

Commissioner El Franco Lee said Commissioners Court never authorized toll road employees to seek donations from contractors.

If the toll road employees had followed established county policy, they would have sought the court's permission to solicit the money and to use it to throw parties for toll road employees, he said.

The court would have denied such requests and would have discussed the potential illegality or impropriety of such donations and expenditures, Lee said.

Still room for influence

Storey and County Judge Ed Emmett said the donations did not influence the awarding of contracts because Commissioners Court, not Strech or other toll road employees, makes such decisions.

Practically speaking, however, there is plenty of room for influence at levels below Commissioners Court. Toll road authority managers, for example, make recommendations regarding which projects should be authorized, how they are scheduled and who should perform the work. Moreover, the process of inspecting, verifying a contractor's work, and seeking sometimes costly change orders is overseen by agency staff and managers.

Law professor Paul McGreal, who recently left South Texas College of Law and now teaches at Southern Illinois University School of Law, said it sounded like "everyone who was involved in this was tone-deaf to the conflicts of interest that arise."

'Community involvement'

Contractors contacted by the Houston Chronicle said they were not put off by the requests.

Turner, Collie & Braden, an engineering and consulting firm, donated $1,000 to $2,500 annually from 2003 to 2006, said Jim Royer, former company president and now chief operating officer of its parent company, AECOM.

It didn't seem like "we were being strong-armed to do anything. It was just, you know, a good client, a big client," he said. Donating the money seemed like "community involvement," comparable to buying a table at a League of Women Voters or Boy Scout fundraiser.

Under state law, public officials and most employees are prohibited from taking gifts worth more than $50 from those who do business with the officials or employees. But the law allows people, including contractors, to take public officials and employees out to eat, put them up at a hotel or bring them to a sports event.

City policy and the county code of ethics, passed in 1994, mirror aspects of the state law.

Public benefit

City Controller Annise Parker said employees clearly would have violated the city's policy if they had solicited funds from contractors to put on a party for employees.

But the solicitations were not a violation of the ethics policy because the city's birthday celebration is put on for the public's benefit, she said. The birthday celebration historically has served as a fundraiser, raising money in the past to pay for library books and other good causes, she said.

At the county, Eversole wondered if the county's ethics code should be toughened "in light of what happened" at the toll road authority, said his chief of staff, Joanye Younts.

He talked to Stafford about whether officials and employees should be required to disclose relationships with contractors or gifts received from them, Stafford said.

Chronicle reporters Paige Hewitt and Rad Sallee contributed to this story.

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