On February 21, 2018, David Harper, the city’s independent Inspector General, confirmed that there is an ongoing “review”, not an investigation, of the $175 million ART Bus project being conducted by his office.

(February 22, 2017 Albuquerque Journal, page A-1, “ART project being reviewed by city; Inspector general examining processes and procedures involved)

https://www.abqjournal.com/1136412/investigation-launched-in-art-project.html

Albuquerque Inspector General Harper made it clear it was a “review” of the processes and procedures and not an “investigation” to determine if criminal fraud and misconduct had occurred with the project.

Notwithstanding that it is a “review”, the Inspector General will have an ethical responsibility to report to the Mayor and City Council if indeed fraud or misconduct are somehow uncovered by his office.

In a statement to the media, Mayor Tim Keller said “As a former state auditor, I appreciate the value and importance of the Inspector General’s independent investigation and we look forward to getting to the bottom of this.”

Mayor Keller did not point out that as the New Mexico State Auditor he would routinely turn his audits over to the Attorney General for prosecution when criminal wrongdoing was found by the audits.

On February 22, 2018, recently appointed New Mexico State Auditor Wayne Johnson, a Republican who ran for Mayor against Democrat Keller and replaced Keller as State Auditor, is also getting into the act of auditing the ART Bus project.

Mayor candidate Johnson also filed an ethics complaint against Mayor candidate Keller for campaign finance violations that were later dismissed.

Johnson’s audit should not come as any surprise to anyone now that Johnson is running for State Auditor and wants to be elected in his own right to a four-year term after being appointed State Auditor by Governor Martinez.

Johnson confirmed his office has completed an “initial fact-finding” after the office received “multiple” requests for review of the ART project.

Johnson did not reveal just how many requests were made nor from who and if any elected official or Albuquerque City Councilor made a request for an audit.

State Auditor Wayne Johnson also said his office will be looking into the “procurement and planning process” required by federal and state law and city ordinances.

NUMEROUS PROBLEMS WITH ART FROM THE GET GO

Over the last three years, numerous problems with the application for the federal grant and problems associated with the actual construction of the project as well as the bus order bidding process have been identified and reported by the news media.

The approval and promotion by the city of the project from the very beginning without voter approval has been the source of major controversy.

Opponents of the projects argued that the Berry Administration made false or misleading claims to the public and in the application process for the $69 million Federal Grant.

The false or misleading claims include that the city project would not be controversial, that the project had the public’s support, that the public was fully informed of the project, that there was no need for an environmental impact study, that there was a need for the bus route because of high volume bus usage rates, that the design and bus route would not have any impact on the historical nature of Route 66, that the design of the bus platforms were in compliance with zoning and landmarks commission requirements, that loans would be made available to all the affected businesses and that the bus route would result in economic development along the central corridor.

A critical issue is whether other funds from other city projects or other sources were improperly diverted to complete the construction project.

Upwards of 250 business owners along the bus route were financially damaged, with some going out of business, to the extent of initiating federal litigation to stop the project.

Extensive problems associated with both construction of the bus stop platforms as well as the buses ordered and delivered have been found and reported by the media.

The current administration announced that there are so many problems associated with the construction of the platforms and needed modifications and problems with the buses delivered that it may be upwards to a year before ART is fully functional, even though the previous Mayor dedicated the project before leaving office.

The City Council approved spending $69 million of federal grant money based on representations of the Berry Administration and the grant money has yet to be appropriated by Congress.

The City Council also issued upwards of $15 million dollars in revenue bonds encumbering future gross receipt tax revenues for ARTs construction.

Congressional committees have cut $20 million dollars from the $69 million grant with no guarantee that it will be made up in next year’s budget resulting in the city having to identify additional funding sources.

It was reported that the city detected upward of 24 issues or problems associated with the new buses delivered, including problems associated with the charging system for the electric busses.

It is has been reported that at least one city councilor is wondering if the city picked the best bus vendor after looking at bus purchase invoices and bid documents.

The City Councilor claims he has found out the City is paying millions more for the electric buses than another low bidder.

SPECIAL GRAND JURY INVESTIGATION WARRANTED

The review of the ART Bus Project by both the City’s Inspector General and an audit by the New Mexico State Auditor are warranted but do not go far enough to allay or dispel all the fears and concerns many people have voiced or felt alleging criminal misconduct with the ART Bus project.

The city’s Inspector General and the New Mexico State Auditor need turn over the findings of their review and audit of the ART project to the Bernalillo County District Attorney’s Office for investigation and prosecution for criminal wrongdoing if found, even if it’s for misdemeanor violations of city purchasing ordinances.

The Bernalillo County District Attorney should convene a special grand jury and subpoena former Mayor Richard Berry, former CAO Rob Perry, former Chief Operations Officer Michael Reardon and former transit Director Bruce Rizzieri, and all city officials involved with the planning and promotion of the project to testify under oath so they can disclose and explain fully what really happened with the ART Bus project, how the contracts were awarded and what representations they made to the public, the city council and in the federal application process for the project.

The general contractors and sub-contractors should also be subpoenaed to testify regarding the project and how the contracts were awarded.

At the conclusion of the special grand jury investigation, the Bernalillo County District Attorney would decide if indictments should be recommended to the grand jury and are in order or issue a report on the findings of the grand jury or announce a possible stipulated settlement.

SPECIAL GRAND JURY INVESTIGATION ON CITY PROJECT HAS HAPPENED BEFORE

A special grand jury convened to investigate the ART Bus project would not be the first time such an investigation has happened on a city project.

Close to 20 years ago, the New Mexico State Auditors report on the airport “observation deck” fiasco was forwarded to the Bernalillo County District Attorney’s Office for review.

In the interest of full disclosure, I was Bernalillo County Chief Deputy District Attorney at the time, and I was tasked with the grand jury presentation on the airport observation deck because of my knowledge of the city.

Further, I was the City Councilor back in the late 1980s who came up with the idea for an Independent Audit Department and sponsored the ordinance that created the department .

The New Mexico State Auditor on the airport observation deck found numerous violations of the city procurement code and cost overruns of over $1.5 million on what was supposed to be a $500,000 construction project.

The argument made at the time to the New Mexico State Auditor was that the city contract was a “sole source” contract that could only be done by only one contractor that had the expertise to do the work and there was no competitive bidding.

The grand jury investigation of the airport observation deck reviewed the State Auditors report along with supporting documentation and heard testimony from those involved with the project.

The grand jury investigation was concluded with no criminal charges but with a civil stipulated settlement agreement that included admissions by the city that the procurement code and purchasing codes had been violated.

Under the New Mexico Unfair Trade Practices Act, civil “assurances of discontinuance” are allowed for conduct and to mandate corrective actions and even impose fines as penalties.

Under the “assurance of discontinuance provisions” of the civil agreement the City entered into with the Bernalillo County District Attorney, the city agreed to make major changes in the city procurement code in order to prevent what happened from ever happening again.

The city also agreed to have the City Council enact the necessary amendments to ordinances, which it did as part of the agreement.

INVESTIGATION BY FEDS NOT LIKELY

The $175 million ART project includes $69 million from a Federal Transportation Grant application that has yet to be funded by congress.

The Berry Administration made repeated representations that all the federal grant money would be forthcoming, and based on those representations, the City Council voted to spend the $69 million before it was appropriated by congress, even though congressional committees reduced the appropriation by $20 million.

The City has yet to receive a single dollar for the project and the bill is now due and owing to the contractors.

There was Federal litigation on the Federal Grant application wherein misrepresentations by the city in the application process was alleged, but the Federal Court denied injunctive relief to stop the ART Bus project.

It is not likely that Federal law enforcement agencies would be interested in the City Inspector General’s review or the State Auditor report unless fraud in the application process is found and the federal grant money is actually received and spent by the City.

CONCLUSION

The City Inspector General and the New Mexico State Auditor have very little authority other than making reports and referring their findings to other government officials or authorities to take action.

A review by a city auditor that deliberately avoids any attempt at identify wrongdoing is probably only worth the paper it is written on.

Likewise, an audit by a State Auditor who is running for reelection and can be easily accused of a political vendetta against a former opponent to make him look bad is also probably not worth much either.

Notwithstanding, the taxpayers and voters of Albuquerque need and are entitled to a full investigation to determine if there was any criminal wrongdoing associated with the $175 million ART Bus project.

Taxpayers need to be assured that funds from other city projects, other sources or other critical essential services were not improperly diverted to complete the construction project.

Both the City Inspector General and the State Auditor need to forward their reports after completion to the Bernalillo County District Attorney for a determination if a Special Grand Jury should be convened for a full and complete criminal investigation of the ART Bus project.