At SunTran, The City-Owned Bus Company, No One Can Hear You Scream
By Dan Huff
TUCSON CITY COUNCILWOMAN Shirley Scott is co-owner, with her husband Joe, of Scott Supply Services, Inc., which sells nuts and bolts to various businesses around town.
That, of course, is not news.
Nor is it news--to anyone in city government, anyway--that Scott Supply currently has a contract worth between $60,000-$80,000 to supply various and sundry items to SunTran, the city-owned bus system ostensibly managed by the private company Ryder/ATE.
And apparently nobody in authority--and certainly not the City Attorney's Office--cares that Scott has voted on plenty of issues involving SunTran, including a "yes" vote last November to hike bus fares--a vote that reasonable minds could conclude might directly or indirectly affect her profit-making potential with Ryder/ATE, even as it gouges more deeply the pockets of the poor who must ride city buses.
Under the City of Tucson Charter, Scott's dealings with SunTran might have been considered a misdemeanor, but, according to Assistant City Attorney Elizabeth Sotello, state conflict-of-interest law, which supersedes the city's regulations, says it's perfectly OK for a government officer to supply materials to the very same government's agency in such an instance--as long as the standard closed-bidding procedures are observed.
Under this august example of the Legislature's wisdom, Scott Supply has even bid on contracts directly with the City of Tucson. It recently lost out to a competitor on a contract worth roughly $35,000, according to Wayne Casper, city procurement director. He adds that last fiscal year Scott Supply sold a relatively piddling $2,800 worth of items to the procurement department on a non-contractual basis.
According to Casper, even if she is an officer of the City of Tucson, Shirley Scott has no direct say in who gets a particular contract, so it's OK for her company to do business with the city government she was elected to oversee. As in all of Arizona, the business of Tucson is business, after all.
But local attorney Bill Risner raises a potential problem for Scott on the governance side of the conflict equation.
Risner's handled a number of conflict-of-interest cases over the last two decades, including a currently much-publicized lawsuit against the Amphitheater School District Board and real-estate broker Bill Arnold, in which Arnold is accused of a conflict because his fees for lands purchased by the Board were paid by the land seller, not the district.
In Scott's situation, Risner says, her votes on matters affecting SunTran may be legally questionable.
The statute which would seem to cover the matter, ARS 38-503B, stipulates that "any public officer or employee who has, or whose relative has, a substantial interest in any decision of a public agency shall make known such interest in the official records of such public agency and shall refrain from participating in any manner as an officer or employee in such contract, sale or purchase."
As that law is commonly interpreted, according to Risner, if it appears your decision-making as a public official could even indirectly affect your personal bottom line, you'd better abstain. A violation can be interpreted as a misdemeanor or a felony, depending on the state of mind of the violator, although prosecutions, in Pima County at least, are extremely rare, Risner says.
In a 1987 opinion issued by the Maricopa County Attorney, a Scottsdale School Board member who was also an employee of a teachers' union was warned to beware of voting on matters affecting the union, because, directly or indirectly, such a vote might affect the board member's pocketbook.
In another Maricopa opinion, a county supervisor was told a conflict exists when he's a major stockholder in a corporation which sells supplies to another company which does substantial business with the county.
And in California, at least, officials have taken the potential for conflict very seriously. As that state's supreme court once noted: "However devious and winding the chain may be which connects the officer with the forbidden contract, if it can be followed and connection made, the contract is void."
But that was written in 1931. And this is Tucson in the free-wheeling '90s, so who the hell cares?
ED DEVLIN CARED. And look what it got him. Hired in late 1995, Devlin was SunTran's senior buyer. One day in March 1996, he was perusing the nuts-and-bolts contract which would eventually become Scott's, when he noticed the conflict-of-interest clause. It stated:
No member, officer, or employee of the City of Tucson or Transit Management of Tucson, Inc. or local public official during his tenure or one year thereafter shall have any interest, direct or indirect, in this contract or the proceeds thereof.
Devlin immediately thought of Scott, who'd been elected in 1995, because Scott Supply just happened to be one of the bidders on that contract. In fact, by that time, Scott Supply had been selling nuts and bolts to SunTran for years, although formal contracts covering those sales had been put out for bid only two years before. Previously, Devlin says, the business had simply been given to Scott Supply.
Devlin brought the conflict clause to the attention of his supervisor, Veronica Parker, then SunTran assistant manager. Devlin recalls, "I told her if we did send a bid to the Scotts, we'd be in violation of the policy, because in some way, directly or indirectly, Shirley Scott would be benefiting from this contract."
Parker agreed and told him she'd check it out, Devlin recalls. Parker, who is no longer with Ryder/ATE, refused to comment publicly on this matter.
Had Devlin simply left well enough alone, he'd probably still be a SunTran employee, several of his former co-workers say. But no, they lament, the darned fool actually believed he was supposed to do his job.
"The thing is," Devlin says of himself, "I'm not the smartest guy in the world, and I'm not the stupidest, you know? The only thing I've got going for me is my name. My name is my reputation. I don't want it getting dirty for anything."
Obviously a man headed for trouble, and he found it.
As Devlin saw it, his job also included going down to the warehouse and the shop floor once in a while to check on the items he was responsible for buying.
"Part of a buyer's job is to administer a contract that he signs his name to," Devlin says. "He's responsible for that contract. If anything goes wrong, they're not coming after the seller, they're coming after the person who signed his name."
An admirable attitude. But real life, of course, teaches lesser men to keep their heads down and their mouths shut.
One guy who, like Devlin, has failed to learn that lesson is Dan Linhart, who runs SunTran's electrical shop. Linhart, a union activist, already had his own thoughts about Scott Supply from a decade or so of first-hand dealings with the company.
Basically, Linhart thought--and continues to think, for that matter--that Scott Supply provides SunTran with chronically slipshod service. He accuses Scott Supply of occasionally over-pricing and short-counting, as well as constantly over-stocking some of the products it delivers to the bus system.
And in one instance, Linhart recalls, the company supplied SunTran with jars of petroleum jelly which had obviously been purchased at Walgreen's. Scott didn't even bother to remove the drugstore's price stickers before delivering them to SunTran--at a much higher price, Linhart claims.
Linhart also complains the company has sold SunTran foreign-made bolts, despite a contract specifying that the bolts be "made in America," He accuses Scott Supply of selling SunTran Chinese-made bolts in some instances.
A concerned SunTran official had Scott's foreign-made bolts tested, and determined they met all engineering specifications; although, the now ex-official adds, the contract was subsequently changed to specify bolts made in the "United States."
Linhart complains he's had plenty of such headaches dealing with Scott Supply, not the least of which is Joe Scott himself, whom he more or less describes as cantankerous and uncommunicative, a description echoed by several others at the bus company at the time.
Linhart says he told Devlin about his problems with Scott Supply during one of the senior buyer's visits to the shop floor, and Devlin promptly took a look for himself.
As Linhart recalls, "In the first order (from Scott Supply) Devlin checked, he found a $700 discrepancy just in Aeroquip hose alone." Until recently this item was used for a wide variety of mechanical purposes--as engine oil lines, air lines, water lines, air-conditioning lines, even power-steering lines--in buses.
"I mean Ed was out there with a tape measure and everything," Linhart recalls, a touch of admiration in his voice. As a result of this episode, the two men were told they could no longer enter the bus company's parts warehouse, a decree Devlin simply refused to obey, citing his duty to properly administer taxpayer money, according to Linhart.
Devlin confirms that story, adding he began looking at recent past orders from Scott Supply. He says he found Scott had underbid one item by about $8, although it charged SunTran the full amount. In all, Devlin found over-charges amounting to $1,200 during the previous contract year. There was no discernible pattern to the discrepancies, Devlin says.
He recalls Joe Scott blaming the problems on an improperly updated computer system, and pledging to make corrections.
AFTER HE POINTED out the conflict clause, "I was told to keep Scott Supply on the bid list," Devlin recalls, noting that Parker, who had agreed with him the clause clearly seemed to exclude Scott Supply, referred the matter up the administrative line.
Months went by and nothing happened. Finally, "I was told the clause would be removed from the contract," Devlin says.
He--as well as others at SunTran at the time--seem to think the City Attorney's Office was involved in that decision. When first questioned about the matter, several city employees said they couldn't remember how it was handled. During an initial interview, Deputy City Attorney Elizabeth Sotello said she "probably did," when asked if she had anything to do with determining how to deal with the contract's conflict clause. In a follow-up interview about a week later, however, Sotello addressed the issue thusly:
"We do recall, that we think it, uh, SunTran had an outside counsel look at that issue," she says. "I mean, we all kind of looked at the issue in terms of what the FTA (Federal Transportation Authority) guidelines were. But what we recall is that I think it's...SunTran's outside counsel that made the determination."
Odd, isn't it, that highly placed city official who handles a number of legal questions regarding SunTran wouldn't clearly remember this issue, affecting as it does a voting member of the City Council? Likewise, Tom Amparano, a longtime liaison between SunTran and the city transportation department, also seemed to have difficulty recalling the issue.
Sotello indicated federal guidelines would determine what's permissible in this situation, while a former SunTran official says the feds simply want the terms to reflect what's common for the particular municipality.
And in this case, according to Sotello, there's absolutely nothing wrong with a City Council member selling items to the city-owned bus system because, in her words, "so long as the contract is competitively bid, um, there's no conflict."
WELL, HARDLY. HERE'S the essence of the problem with public officials--of whatever entity, not just the city--doing business with the governments they serve:
It looks bad.
Even if the official in question is scrupulously honest and above-board, allowing insider contracting can only contribute to suspicions among the general citizenry of unfair sweetheart deals, if not outright corruption.
What government official in her right mind would wish to foster such distrust of the government she serves? Perhaps one like Shirley Scott, who's obviously at least a tad more concerned about making money than she is about the potential for increasing public cynicism toward the City of Tucson.
During the months the conflict clause was under review, Devlin as well as other SunTran employees complain, Joe Scott kept up a constant barrage of calls and faxes complaining about this or that, and issuing demands.
"You know, like he wanted information," Devlin says, "and he wanted it right now, demanding it right now. Whereas, someone else would probably say, 'Well, get me the information as soon as possible,' his was, 'I expect an answer today,' that type of thing. If things don't go his way," Devlin says of Joe Scott, "all of a sudden he's calling a lawyer or he's making complaints. He's one big general pain in the ass."
Scott reportedly directed most of his alleged ire at Parker. Others at SunTran at the time claim Joe Scott "threatened" Parker "on a weekly basis."
Says one former employee who asked not to be identified, "He threatened Ed, he'd threaten anybody. He'd write these nasty letters to (Parker), telling (her) about performance issues. He'd say if (she) didn't do anything about them, he was going to take them to the City Manager...He was out of control most of the time."
Casper, the city's procurement director, recalls Scott asking him for advice on the SunTran contract. Casper says they had a perfectly normal conversation. Others allege Joe Scott took the matter as far as Tucson Mayor George Miller's office.
Of course, Miller denies having any involvement in the Scotts' business with SunTran. But that hasn't stopped a few of the Mayor's political detractors from whispering that it's not inconceivable Miller might have flexed some muscle in this matter to secure Shirley Scott's loyalty on certain votes. Even though the speculation appears unfounded, such is the nature of the stain that quickly spreads across the fabric of any government where insider contracting is tolerated.
At any rate, Joe Scott's alleged blitz on Parker seemed to wear her down, according to Devlin.
"I think Veronica was just trying to get by it, get it off her shoulders," he says. "It got to a point where it was sort of, 'Give it to him already and let's just quit having him complaining all the time.' "
Perhaps to anyone but a straight-arrow like Ed Devlin, the end result was easily predictable.
"Basically," he recalls, "the contract was changed so that anybody--including people working for SunTran, as well as city, state, and federal officials--could do business with SunTran. There were only two exceptions--me and the other buyer."
Besides the irony of this outcome, it's also worth noting here that SunTran insiders cannot recall any other city official's company, besides Scott's, doing business with SunTran. Thus, they conclude, the contract was altered specifically to accommodate Scott's business.
Like the odor of bus fumes, the appearance, at least, of impropriety already hung heavy in the air for these SunTran employees.
AND IT SOON grew worse. The nuts-and-bolts contract, covering about 300 items, had attracted only two bidders--Scott Supply and Kar Products, a national company with a local sales force. On most contracts of that size--roughly $80,000--it's standard practice to obtain at least three bids, Devlin says.
So SunTran canceled its initial call for bids and issued a second one, to which three companies eventually responded. Scott Supply was low bidder on about 80 items, and low bidder over all. By this time, however, Devlin had been relieved of responsibility for overseeing the bidding process, and the job had been given to another buyer.
Given the complaints they'd heard and the harassment they'd allegedly experienced, it's perhaps understandable that SunTran employees were reluctant to award the contract to Scott Supply.
"We told Joe Scott we were only going to give him the 80 or so items [for which Scott Supply was low-bidder] on that contract," Devlin recalls. "He said he wouldn't accept that, because he wanted everything--he wanted all the nuts and bolts. And he said he wanted them all because that's the way it was done before--if he won the contract, he was to get everything."
At this point Devlin brought up the discrepancies leading to the $1,200 in overages in the previous year's contract.
A meeting was called--Parker, Devlin, Joe Scott and the Scotts' son, Brett, were among those in attendance. Brett Scott convinced his father to accept the 80-item contract and worry about getting the rest of it later, Devlin says. (Currently, Scott Supply once again has the entire nuts-and-bolts contract.)
The meeting soon degenerated into a shouting match, according to others present, with Joe Scott and Devlin going at one another, and Joe Scott chastising Parker for supposedly allowing Devlin to talk to her in a disrespectful manner. It was not, they say, a pleasant scene.
Devlin also alleges that Parker allowed Scott Supply some leeway normally not granted to ordinary bidders. The call for bids required each company to submit a catalog of its items along with a price list by the closing date, which was late September or early October. The catalog/price list would allow bus company officials to check prices more accurately--a major, chronic problem for them, Devlin says. Scott Supply failed to provide the necessary information.
"In all purchasing departments, when you send out a bid and you ask them to send back parts A, B, and C, if one of those parts is missing at bid closing, that bid is null and void," Devlin says. "But Scott Supply was given a two-week extension." He specifically recalls several other SunTran vendors who were not given the same soft deadline as Scott Supply; and, he adds, those bids were not even opened because they were submitted slightly late.
Actually, Devlin says, Scott Supply didn't come up with the price list for about a month, and then Joe Scott insisted SunTran in general, and Devlin in particular, take responsibility for the safekeeping of Scott's Supply's proprietary computer program, which contained the required information. Devlin says he refused, arguing it wasn't part of his job description.
"At that point, I think Veronica was getting a little aggravated with me," he admits.
That month, in fact, Parker put Devlin on notice that the company didn't like his performance.
"I hadn't taken a day off, except for Saturdays, Sundays and holidays. I'd been to work on time, I'd left late, never took overtime. And they said they didn't like my performance. (Parker) said certain people within the company didn't feel they had confidence in me."
She didn't name names, he says.
Eventually, of course, Parker fired Devlin. But not before he raised several more concerns about Scott Supply--there was the matter of the foreign-made bolts, as well as the complaint that a company representative wasn't coming in every two weeks as required in order to check inventory. "Sometimes the people on the floor wouldn't see them (Scott Supply) in a month or so, maybe six weeks," Devlin alleges. "And they were sending us products we hadn't even asked for, and billing for them."
Devlin thinks the final straw occurred because he happened to be present on the shop floor one day in January when a mechanic was teasing Joe Scott about the shoddiness of some shelving Scott Supply had sold to SunTran years before. Kar Products had offered to replace the shelving for free.
The next day, Devlin says, he was fired.
"I've been through a lot," he says in a calm, precise voice with a slight New Jersey accent. "In 1984 my 2-year-old son, Ashley, died. I got divorced. You know, I'm driving a car that's 20 years old, has 180,000 miles on it. I've had the shit kicked out of me, basically. But the one thing I do is, I do my job well. My tax dollars are paying for those nuts and bolts, too."
And during all of this, he's asked, did Joe Scott ever mention that his wife was a powerful member of the Tucson City Council?
"No," Devlin admits, pausing for a moment, then adding: "He didn't have to--everybody knew it."
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