When a former aide to the Austin mayor was found to have been secretly taking payments from a nonprofit he founded that received city contracts, the Austin Ethics Review Commission faced a choice: Send him a mean letter or a meaner letter.
In Austin, commissioners debating the case of Frank Rodriguez, the ex-mayoral aide, found he had violated, perhaps accidentally, four sections of city code by taking the payments, failing to report them and working on matters involving the organization.
They settled on issuing him a letter of admonition — harsher than a letter of notification but less severe than a letter of reprimand.
Meanwhile, in San Diego, ethics commission representatives took a look at a city board member who’d been receiving payments for serving as a consultant to organizations receiving contracts there and only partially disclosing his associated income.
Their probe ended in a settlement in which the board member agreed to pay an $11,000 fine.
In Seattle, in 2016, a transportation employee failed to recuse himself from matters involving a bike-share company he founded, though he was no longer affiliated with the company and received no financial benefit.
He agreed to pay a $10,000 fine.
The powers of the Austin Ethics Commission are relatively toothless compared with those in some cities on the East and West coasts, which can issue fines or other sanctions in cases of violation.
Austin’s council-appointed commission hears complaints against elected and appointed officials and their staffs. If it finds a violation, it can issue one of three types of letters or, in extreme cases, offer a recommendation that the person be removed from his or her job.
Austin’s board can also refer cases for criminal prosecution by city attorneys, but it has not done so in recent decades, observers said.
As Austin grows, its policies and processes surrounding city ethics have seen more scrutiny as prominent cases have tested them. The Rodriguez case came after an American-Statesman report and a city investigation that yielded more than 700 pages of findings.
A complaint against former Police Monitor Margo Frasier involving her secondary employment drew controversy before she was cleared.
A complaint against Human Resources Director Joya Hayes involving child care led council members to take complaints against some staff members out of public view.
This week, City Council Member Natasha Harper-Madison’s campaign contributions collected outside of the allowed time frame became a partisan issue when Republicans filed an ethics complaint accusing her of a pattern of violations. Other campaign finance errors or violations have resulted in letters of notification or reprimand.
Critics have occasionally suggested the commission have broader powers. Fred Lewis, a local lawyer and activist who’s had perhaps more involvement with Austin’s ethics commission than anyone else, criticized the commission for being too weak and, he said, staff-directed. He wants to see an independent ethics commission tied to a public campaign financing system.
“Without effective enforcement, there is no ethics,” he said. “A restructured ERC should have much broader powers to investigate, hold evidentiary formal hearings, propose real fines, and refer and try matters in Municipal Court.
While state law allows fines up to only $500, that could be per day, per violation and likely would get some politico’s attention.”
Still, Lewis, who represented Rodriguez as his attorney, called that case “much ado about nothing” and said the city should not have made a big deal of it. He and Rodriguez consistently denied that Rodriguez influenced any contracts while at the city.
Lewis was recently the complainant in a case against a political action committee whose managers he accused of illegally delaying disclosure of a major contribution.
Representatives of the PAC acknowledged they should have noted the contribution on an earlier campaign finance form, and commissioners voted to issue them a letter of reprimand. In Philadelphia, by contrast, late financial disclosures bring fines of $250 per day.
Mayor Steve Adler said he hadn’t given the ethics sanctions much thought and would be interested to see what other cities do but overall thinks the process is serving the city well.
“I don’t think there are people who violate the ethics rules because of the absence of sanctions — as evidenced by how contested these things are — so I’m not sure there’s a problem we’re trying to fix,” he said.
“If we started having repeated similar violations or people flaunting it like, ‘Who cares? They can’t really do anything to me,’ or the same people being brought before the commission more than once, then we’d be crying out for more.”
The chair of the commission, Mary Kahle, did not return phone calls to comment. Its vice chair, Luis Soberon, said he’s not familiar with how other cities operate but is impressed with the diligence in how Austin’s commission considers each case.
Austin’s ethics commission has heard 10 cases in the past three years and issued four letters in response to findings of violation.
Other major Texas cities are relatively similar.
Of some three dozen complaints filed in San Antonio in the past three years, all were dismissed or returned for not meeting complaint requirements, city documents showed.
Dallas’ ethics commission has seen three violations in the past three years, all resulting in letters of reprimand or notification. Fort Worth’s commission has not heard any complaints in the past three years.
Carla Miller, director of ethics in Jacksonville, Fla., who founded an organization dedicated to city ethics 20 years ago and has traveled all over the country training cities in creating ethics commissions, said the process of responding to an ethics complaint is often worse than an actual sanction.
“Most people would probably pay $5,000 to not have something like that on their record,” she said of letters finding violations.
Having strong laws can sometimes be the biggest challenge, Miller said.
“A lot of the time what you find is that the laws the ethics commissions are dealing with are fairly weak, and something is clearly not right, it appears to be a conflict, but it doesn’t really fit into the laws of the institution, and that’s when you get into institutional corruption,” she said.
“Every time something gets headlines and nothing happens, you lose public trust.”
A former aide to Austin Mayor Steve Adler violated four sections of city code by quietly taking payments from a nonprofit that won city contracts he promoted, the Austin Ethics Review Commission declared.
The commission’s vote came a year and a half after an American-Statesman investigation into conflicts of interest between the aide, Frank Rodriguez, and the nonprofit, the Latino HealthCare Forum, which he founded. Statesman stories prompted the city to undertake an external investigation, which found that after Rodriguez joined Adler’s staff, he continued to write himself checks from the nonprofit — including payments that appeared to be percentages of city contracts.
Records show Rodriguez received $17,235 in 2015 and $19,875 in 2016 in consulting payments from the Latino HealthCare Forum. He resigned from Adler’s office in 2017.
Adler and his recent chiefs of staff testified to the commission that they had no idea Rodriguez was taking payments from the group, though they knew that his wife worked there. Rodriguez said the payments were for past work and denied he had any influence over who was awarded city contracts.
When Rodriguez testified, he asked investigators to close a PowerPoint presentation of their claims that was projected on a screen behind him. He said he never believed he had done anything wrong and said Adler’s office should have offered better ethics training.
“It’s kind of an emotional thing for someone to suggest I was selling myself for $17,000 in consulting fees,” he said.
‘A friend inside City Hall’
Rodriguez’s job with the city involved serving as a liaison to community groups, including the Latino HealthCare Forum, which helped enroll low-income residents for insurance through the Affordable Care Act. Investigators presented emails showing Rodriguez raising concerns to Adler about the forum receiving “disparate treatment” compared with a competitor and helping to edit documents related to the group’s city contracts.
Ross Fischer, an attorney whom city auditors hired to investigate, said Rodriguez used his position on Adler’s staff to secure contract extensions for the Latino HealthCare Forum. The group depended financially on city contracts and was in danger of losing them because it enrolled a fraction of the people another organization did, Fischer said.
Those “were all reasons the Forum needed a friend inside City Hall,” he said.
Attorney Fred Lewis, who was representing Rodriguez, called the allegations “a lot of smoke” and “much ado about nothing.” Many of the payments fell outside the commission’s statute of limitations.
Ultimately, the commission voted 6-1, with three members absent, to find that Rodriguez violated portions of city code barring city employees from transacting business with entities where they have a substantial interest and requiring disclosure of conflicts, among others. They agreed unanimously to issue Rodriguez a letter of admonition — more serious than a notice of violation, but less serious than a letter of reprimand — indicating that the violations were minor or unintentional.
Adler told the commission he didn’t know anything about the payments and couldn’t speak to whether they violated the law.
“I don’t know whether Frank received money associated with any city contract, but the advocacy he was doing in my office involved ensuring children and families were insured,” Adler told the commission. If he had known about the payments, Adler said, he “probably would have asked questions.”
Adler said Thursday that his office will review how it operates with regards to conflicts but would not say how serious he considers Rodriguez’s actions to have been. The mayor said he had not read most of the investigation’s details.
‘I’m staying out of this’
In recent years, Austin has paid two entities to help enroll people in health insurance: Latino HealthCare Forum and Foundation Communities. In 2016, Foundation Communities received $100,000 and enrolled 5,911 people. The Latino HealthCare Forum received $200,000 and enrolled just 168 people, Fischer’s investigation found.
In a 2015 email to Adler, Rodriguez said the forum felt it was unfair that the City Council had voted to give additional funding to Foundation Communities but not the Latino HealthCare Forum. The end of his email said, “I’m staying out of this.”
Walter Moreau, executive director of Foundation Communities, said in an interview Thursday that he found the situation frustrating.
“When we applied for city funding, it was just kind of understood that Latino HealthCare Forum has to get half the money … but they never had the numbers,” he said. “It was frustrating, but we just sort of accepted that’s the way politics are.”
He called himself shocked and dumbfounded to eventually read in the news that Rodriguez had been on the forum’s payroll during that time, calling it “completely inappropriate.”
In another instance, documents presented by investigators show Rodriguez used his city computer and email in 2015 to help the Latino HealthCare Forum draft a proposal for a contract under the city’s Restore Rundberg program. Months earlier, he had signed a check from the Latino HealthCare Forum to himself for $7,500 — 10% of the organization’s previous Rundberg city contract — with the memo line “Rundberg.”
Rodriguez told the commission that the document he edited was background information for Adler before he toured the area, and not a contract proposal, despite the fact that it is titled “proposal” in his emails and was later attached to the contract awarded.
Adler Chief of Staff Lesley Varghese called the original Statesman stories, which ran in October 2017, “bad optics.” She met with Rodriguez then about potential conflicts of interest involving the nonprofit, but didn’t realize he had still been on its payroll. In an email to Varghese in 2017, Rodriguez mentioned previous income owed to him from the group, but did not elaborate.
After city staff members became aware the newspaper was working on a story, in early 2017, Rodriguez met with Assistant City Attorney Cindy Tom about his potential conflicts of interest and she prepared a memo for Varghese saying he had complied with city ethics rules. However, the memo states that Rodriguez “stopped working for LHF when he began working for the Mayor in early 2015” and appears to assume he received no further income from the group.
Investigators said Rodriguez deleted “key emails” that the Statesman had obtained through a public information request before the independent investigation.
Lewis said Rodriguez’s emails that appeared to advocate on behalf of Latino HealthCare Forum — such as one instructing Austin Public Health staff members that “The ACA split discussed was $200k for LHCF and $100k for Foundation Communities” — were not advocacy and merely relayed decisions from others.
But investigators argued that the emails showed Rodriguez was deeply involved in the process on every side.
Commissioners praised some of Rodriguez’s work, but questioned why he didn’t disclose the payments.
“Codes of ethics are about any impropriety or appearance of impropriety,” Commissioner Tray Gober said. “When you sat down and instantly asked for documents to be taken down, because of what it looked like behind you — you understand what the appearance of impropriety is.”
Despite the letter of admonition, Rodriguez said he wasn’t upset by the proceeding’s outcome.
“It was a fair decision,” he said afterward. “They said it was unintentional.”