Foxes in the henhouse

Appearance of impropriety continues to plague city leaders

Jefferson Dodge and Joel Dyer | Boulder Weekly

A troubling pattern of secrecy and conflicts of interest continues to unfold among certain members of Boulder city government.

This week’s email spat among a few council members and staffers is just the latest example of questionable actions — and inactions — of Boulder’s elected officials and the people they hire and supervise.

This latest revelation came to light this week when councilmember Lisa Morzel raised questions about the council’s 2012 process for conducting evaluations of the city’s top executives, namely City Attorney Tom Carr, City Manager Jane Brautigam and Municipal Court Judge Linda Cooke. In recent years, the council has relied on an outside, independent, third-party consultant to oversee the evaluation process and then provide the information to city council members, who are ultimately responsible for evaluating those they hire and supervise.

Part of the “360-degree” evaluation process is gathering the insights, opinions and concerns expressed by city employees who work directly with — and often for — those being evaluated. In order to gather honest and accurate assessments, it is critical that city employees be absolutely guaranteed anonymity when it comes to critiquing their bosses and/or coworkers. This need for identity protection is why outside consultants are commonly used by businesses and governments conducting such evaluations. In larger companies, HR personnel from out-of-state offices are often brought in to conduct the interviews, because this lack of familiarity and day-to-day presence is considered essential to accurate information-gathering.

Cinda Daggett, president and founder of The HR Department, a 23-year-old local human resources consulting firm, explains that many companies use external firms for evaluations because it increases the chances that employees under those being evaluated will be more forthcoming.

“They are more candid, they’ll tell more about it, especially if they don’t think it’s going to come back and bite them,” she says, adding that doing those evaluations internally can be problematic. “What if they have to evaluate their boss? They’re not going to do it. Well, they’re going to be very reluctant, because they’re going to be afraid for their job. What if this leaks out? How can you guarantee this isn’t going to leak out?

So they’re not going to be safe. In other words, they won’t tell the truth.”

The response that Morzel got to her inquiry about this year’s evaluation process, which is being overseen by councilmembers Ken Wilson and George Karakehian, was quite telling and consistent with the recent conflict of interest/lack of transparency pattern that has emerged among certain persons in city government of late.

When Morzel initially questioned why the evaluations were late being conducted by the consultant this year, Wilson told her that the process had been under way for a month and that he and Karakehian had decided not to use a consultant this year, but rather conduct the evaluation process using city staff for financial reasons.

Morzel questioned why the council was departing from the past practice of using an outside consultant and conducting the evaluations in-house, through the city’s own human resources department (which reports directly to Brautigam, one of those being evaluated). Her reasoning was simple enough. Wouldn’t continuing to work with a consultant eliminate the appearance of yet another conflict of interest? She also was curious about why Wilson and Karakehian had suddenly decided, without the approval of the overall council, to have the three executives’ evaluation process conducted by people who report directly to one of those being evaluated, and whose anonymous analysis would be critical to an accurate evaluation. Morzel made it clear she believes there is a credibility problem with an executive’s employee conducting his or her own boss’s evaluation process, because employees may not be able to speak freely about their supervisors, fearing retribution should criticism ever get traced back to a particular employee.

Further, Morzel asked why Karakehian and Wilson consulted with Carr and Brautigam about their own evaluation process, something Carr acknowledges.

Wilson seemed defensive when explaining the decision he and Karakehian made to abandon the consultant, as the only members of a council subcommittee charged with performing the evaluations. He said it was intended to eliminate an unnecessary step and save money.

“If you are unhappy with the decisions that George and I made, you can do the job next year,” he wrote. Morzel replied in a subsequent email, “I’m happy to do this next year, but first want it done right this year.”

Before long, Carr jumped into the fray, calling Morzel’s requests to have the conversation made public on the council’s hotline email system “hurtful” and saying things become political “when you beat up on staff.”

Morzel pointed out to the city attorney that email among councilmembers must be made public, according to sunshine laws.

On its own, this latest council/staff controversy might seem only moderately significant. But taken in light of recent controversies concerning business interest disclosure gaffes on the part of Wilson and Karakehian, and the fact that the two people responsible for getting corrected disclosure information from the two councilmembers and making that information public are Carr and Brautigam, it conveys a significant appearance of impropriety on the part of these officials, and such appearances are as destructive to governing as impropriety itself.

As a matter of a refresher from recent Boulder Weekly reports, Karakehian and Wilson failed to provide essential and important information on their recently filed financial disclosure statements. BW uncovered omissions and inaccuracies on the disclosure forms of the two councilmembers while investigating a restraining order requested by Carr on behalf of city council. That order prevented local political gadfly Seth Brigham from attending council meetings or emailing city officials. At the time the restraining order was requested by Carr, Brigham had been making inquiries regarding the financial disclosure information filed by Karakehian and other members of council.

For his part, Karakehian failed to list several LLCs in which he is a partner with prominent local developers, including Stephen Tebo. He told BW that the LLCs — which own more than $6 million worth of downtown Boulder real estate — represent a “retirement” fund and that they were omitted because they are owned in the name of the business he owns. He also provided an incorrect name for another partnership which owns yet another piece of downtown property with another developer.

When Wilson disclosed on his form that he is a limited partner in a real estate trust that owns a Longmont apartment complex, he incorrectly listed the name of the trust as “Crabapple Court,” instead of by its actual name, 520 Emory Street LLC. A search of its proper title reveals that his investment partners include a Boulder attorney who specializes in things like land use, zoning, planning and real estate law; as well as the principal of a consulting firm for developers who want to makeover the University Hill area and have prepared an influential Hill development study presented to the city planning board. The apartment complex is currently for sale for $1.2 million.

Carr himself even denied talking to District Attorney Stan Garnett about Garnett’s investigation into the financial disclosure allegations against Karakehian — just before the DA abruptly closed what was supposed to be a two-week inquiry. But phone records obtained by BW confirmed that the two had, in fact, spoken during the time period in question, after Karakehian learned of the investigation and said he would be making some calls.

The reason for the city’s disclosure laws is to shine light on potential conflicts of interest on things that come before council. Information such as who council members are in business with and where they own real estate is critical to avoiding impropriety. Accurate disclosure is also necessary to avoiding the appearance of impropriety, which the city charter forbids council members to create when at all avoidable.

But despite the inaccuracies and omissions, however inadvertent they might be, city officials apparently do not intend to have them corrected. This despite city charter language that calls for the city manager to have such corrections made to the forms and be made public within 72 hours of the time the omissions or inaccuracies are brought to the city’s attention. But this is a tall order in this case, because Jane Brautigam’s evaluation process, and thereby next pay raise, is being determined by the same two councilmembers from whom she is supposed to be demanding new and accurate disclosure forms.

Carr’s evaluation process, which will determine the attorney’s next potential pay raise, is also being shepherded by the same two councilmembers. Carr has said Karakehian’s omission is just a symptom of unclear wording in the city’s financial disclosure regulations, and, at the request of Mayor Matt Appelbaum, is working to clarify the language. In the meantime, according to city spokesperson Sarah Huntley, City Manager Jane Brautigam is not having the forms corrected within the 72 hours required in the city charter. Instead, Wilson and Karakehian’s omissions and misinformation are being given a pass until the “vague” parts of the financial disclosure rules are “clarified.” Carr has been charged with bringing forward a set of “best practices” used by other governmental entitities, Huntley said.

So the two people who could force (and who are apparently legally required to force) Wilson and Karakehian to provide new and accurate financial disclosure forms, which could bring to light even more potential conflicts of interest than have already been reported, are refusing to do so. They have made their decision to take no action against Wilson and Karakehian at the same time those two councilmembers are overseeing the process that will decide the two executives’ future with the city.

Isn’t this exactly the type of conflict or, at best, appearance of conflict, that Morzel is warning about, due to Wilson and Karakehian suddenly deciding that evaluations would be done in-house without an external third-party consultant and without the vote of or even notification of the rest of council?

As Morzel put it in her email to Wilson, “The process you and George have concocted with the help of Jane and Tom is akin to foxes watching the hen house.”

In a lengthy email response to Morzel’s concerns about the evaluations the next day, Wilson cited his management experience with AT&T Bell Labs, where he said 360-degree evaluations were conducted ably internally, by the human resources department.

The city’s consultant, Mountain States, was paid “quite allot of money for not much real work,” Wilson wrote. “I was quite struck last year that we paid a consultant more than the cumulative amount we give in raises to all three employees (on a one year basis).”

That last statement is blatantly incorrect, unfortunately.

According to city spokesperson Patrick Von Keyserling, in 2011 the consultant was paid $5,756.50. The three employees in question received a total of $16,314 in salary increases that year, with both Carr and Brautigam each receiving a higher raise than the consultant’s tab.

Wilson concludes his email by saying that “where the rubber really meets the road is in the raises anyway. All of the rating and 360 feedback and comments are really just words. It’s the raise that is most important, and we do that on television.”

Just words? Is Wilson really saying that the information disclosed regarding the executives’ job performance and/or behavior during the evaluation process doesn’t even matter, because the decision of continued employment and the granting of a pay raise is already a given? If that’s the case, then there may be an even less expensive evaluation process: none at all.

Read the email exchange in full here.