Corruption that is not illegal

Editor’s Note: This being the Littleton Citizens’ Report normally we would not run a story about issues in Englewood. However, since part of this story runs through the Littleton/Englewood Sewage Treatment Plant we thought it appropriate to run this story here.

The story starts with Englewood City Council Member Laurett Barrentine expressing concerns about questionable purchasing practices carried out by Englewood city employees. Those concerns resulted in the Englewood City Manager Eric Keck asking the District Attorney of 18th Judicial District to investigate the claims. The District Attorney’s investigator determined many of the financial improprieties were in fact taking place but were not illegal because of extra-city organizations and polices put in place by the City. Furthermore the actions that were potentially illegal were beyond the statute of limitations and therefore no judge would grant search warrants, making further investigation impossible.

City Manager Keck was aware the financial improprieties were taking place, before the issue was raised by Council Member Barrentine, through complaints from Englewood city employees and from an a sexual harassment investigation conducted earlier by the City. Yet when the investigation was complete Keck chose to not release any of the details to City Council Member Barrentine who raised the issues, or any other city council member. Instead Keck released the conclusion memo from the DA’s investigator which said “no further investigation is warranted.”

Former Englewood Mayors Randy Penn, who according to the investigative report was aware of the financial improprieties, and former Englewood Mayor Jim Woodward, who had a copy of the report, initiated a recall action against Council Member Barrentine. The two former mayors claim on their website there are “no problems” and Barrentine’s attempts to obtain information amount to a “vendetta.”

At the conclusion of the investigative report the extra-City organizations and policies (or lack thereof) which allowed the financial improprieties to happen were still in place. It also appears the practice of ignoring purchasing policies is still taking place in the Littleton/Englewood Wastewater Treatment Plant.

Giving contracts to friends

According to the 18th Judicial District report the investigation was requested by the Englewood City Manager because of “concerns involved inv 1 [the previous Englewood Director of Public Works] was possibly mismanaging City funds related to Englewood Environmental Foundation, Inc. (EFF) and Englewood/McLellan Reservoir Foundation (EMRF), in part by not following City Policies and Procedures, payments possibly continuing on expired contracts, contracts not being awarded based on bidding, and contracts being awarded to companies or individuals who were in some way related to inv 1 [the previous Englewood Director of Public Works.]”

The investigator determined all those actions had taken place: services were requested and payments made on contracts which had expired, in one case more than a year previously; contracts were awarded without soliciting bids or conforming to the City’s purchasing policies; contracts were awarded to a City employee, and to individuals/companies with whom the previous Public Works Director played golf, and also with whom the previous Director also coached and played hockey.

One such entity received more than a million dollars in payments over a ten year period of time for unspecified services. Another entity received on average more than $10,000 per week over a 13 year period of time for snow removal, day porter service, sweeping services, power washing, and sprinkler/irrigation repair. One of those entities continued to be awarded work, and receive payments, after being removed by the City from the approved vendor list.

Not putting contracts out to bid was not limited to contracts issued through EFF and/or EMRF. Work on the Duncan Street School demolition was classified as “professional services” by the previous Director in order to avoid bidding the work out. Our sources also indicate the City of Littleton expressed concerns to Englewood about contracts for the Littleton/Englewood sewage treatment plant not being put out to bid.

EFF and EMRF

The Englewood Environmental Foundation, Inc. (EFF), was formed by the City of Englewood as a separate, private, nonprofit corporation to provide property management services for the City of Englewood’s city center and surrounding buildings. The corporation also functions as a vehicle for avoiding normal City purchasing policies.

The board of directors of the corporation are all City employees, and the people who work for the corporation are City employees, paid by the City as part of their regular City pay.

Englewood/McLellan Reservoir Foundation (EMRF) is another private corporation created by the City and used to protect the City’s water rights and generate income for the City by leasing City owned property, as well as to avoid City purchasing policies. The board of that corporation is also comprised solely of City employees.

Since both corporations are private non-profit corporations and considered to be separate from the City, City employees performing work for the corporations on behalf of the City and being paid by the City to perform that work are not required to follow the City’s purchasing policies and procedures.

Most, but not all, of the financial improprieties found by the investigation happened on contracts routed through those two corporations. For example the report lists the demolition of the old Duncan School building as an example where the project manager thought the contract should have been put out to bid, but was classified as “professional services” instead in order to bypass opening the project to bidding. That project was not routed through either private corporation.

The City Council’s Role

The Englewood City Council is ultimately responsible for all actions taken in the City. The Council approves contracts and provides oversight of the City Manager who in turn is responsible for conduct of City employees.

The City Council approved on 3/19/2012 the demolition and environmental remediation of the old Duncan School building as a professional services contract and awarded the contract to the company with the “professional associate” with whom the Director went golfing.

The City Council was also informed by City Manager Keck in the spring of 2015, according to the investigative report, of concerns about the previous Director of Public Works not following City policies. Eric Keck reported back that the City Council sided with the former Director.

Still going on . . .

The Littleton/Englewood Wastewater Treatment Plant is co-owned by the cities of Englewood and Littleton but run by City of Englewood employees. The plant has a history of not putting contracts out to bid and undertaking projects that fail or which are not needed: the purchase of farm land which was unusable due to the failure to perform due diligence, replacing a disinfection system that didn’t need to be replaced, adding capacity which is not needed, and a biomass reuse project which was inadequately engineered and constructed and ultimately failed, to list a few examples.

When the plant staff brought another biomass reuse project to both City Councils some members of both Councils expressed an interest in getting alternatives to the staff proposal. While the study requested by the Councils was being prepared someone on the plant staff sent out an RFP for renewable energy fuel credit management services via email to a select group of potential vendors. This action not only bypassed the City’s purchasing policies but it also effectively precluded any alternatives to the higher risk process favored by the staff, and limited bids to a subset of vendors favored by the staff.

Wrong but not illegal

Since the investigation was being conducted by the District Attorney’s office the purpose of the investigation was to determine if any laws were violated, not to determine if adequate polices and procedures were in place to protect tax payer money. That would be the job of a forensic audit.

The investigator determined “within the Articles of Incorporation and Bylaws for EEF, I was unable to locate any mention of the Director’s responsibility or expectation to submit contracts or proposals for service out to bid.” Which was also the case for EMRF. Meaning, it was not illegal for the former Director to guide contracts to his friends, and there was no legal requirement to search for the lowest cost providers.

The investigator also determined “the City of Englewood through the exercise of reasonable diligence should have discovered the possibility for, and reasonably know of any existing financial improprieties and information related to the allegations as early as 2012, which were not acted upon by initiating a report to Law Enforcement when the information was learned.”

Since the statute of limitations for commercial bribery is 18 months from the date of discovery, and three years for embezzlement and theft, there was no point in looking any deeper.

But actions being legal is not the same as actions being right. The report notes that RTD was concerned about the costs it was paying for common area management conducted through EEF. The City of Littleton was concerned about contracting practices at the wastewater treatment plant. The employees of Englewood were also uncomfortable with what was going on; when they were interviewed by a different investigator about possible sexual harassment charges the employees wanted to talk about contracting practices. So much so that the majority of the material in the DA’s report actually comes from the sexual harassment investigation.

We most note here that Eric Keck, the current City Manager, was not hired by the City until 2014. In early 2015 when Keck heard complaints from two different employees about the Director not bidding out contracts he took those concerns to the City Council, when Randy Penn was Mayor, and the Council sided with the previous Director.

The cover-up and recall

The story ends with two former Englewood Mayors, who are fully aware of the financial improprieties that took place, filing a recall against Englewood City Council Member Laurett Barrentine for requesting a forensic audit of those same improprieties.

The two former Englewood Mayors have the DA’s report. The report clearly shows contracts not being put out to bid, contracts being awarded to the same companies over and over – companies whose owners golfed and played hockey with the previous Director – along with payments of over a million dollars for “unspecified services.” The report also shows that the previous Director was “encouraged to retire.”

Yet the two former Mayors say on their recall website that “City Manager Keck looked into the accusations made by Barrentine in 2016 and didn’t see any problems.” Those two former Mayors, along with the other principals involved in the recall, think awarding millions of dollars in contracts to golfing and hockey buddies without any bids is perfectly normal business practice and good stewardship of citizens’ tax dollars. And they want to keep it that way.

Post Script:  
Elections results were 734 to 688. Ms. Barrentine won the recall election and she will remain in office.