The Insider

The Lapdog Eats His Own
If you think your job situation is about as miserable as it can get, cheer up. At least you aren't among the Houston city controller's office employees who have been fired, laid off or are still hanging on by their gnawed fingernails under the regime of Lloyd Kelley, a man whose management style is drawing all kinds of historical comparisons. "You have to go back to World War II," muses one victim of the new order. "Fascist is the word that comes to mind."

Before the firings of three execs last week, George Greanias' successor had already swung a broadax through the ranks at the controller's office, eliminating more than 30 staffers. Insiders say the staff cuts have decimated the pool of experts who knew how to run the complex computer systems that process vendor payments, reconciliation of accounts and earnings from city investments. At least one former staffer believes that such developments are music to the ears of Mayor Bob Lanier. Why? Because Lanier had numerous run-ins with Greanias in his first two terms over financial issues, and the fewer financial experts there are in the controller's office, the fewer problems he's likely to have.

"No power there at all," says the source. "No way to do anything. They don't have to get rid of the controller's office with a charter election -- they do it this way."

Meanwhile, Kelley, who's made no secret of his intention of stepping on to bigger and better political things following his stint as controller, can strike a pose as an enemy of big government. "Whatever he's done will make wonderful sound bites for whatever election he's going to run for," says the source. "He'll say he got rid of 35 people during his first two months in office, and people will think that's great. But the controller's office, for all practical purposes, has been gutted."

Many of the fatalities are veterans who had served under a number of controllers in what had traditionally been nonpolitical roles -- nonpolitical, that is, until Kelley took over. Margaret Hansen, director of systems and administration services and a 19-year city employee, got the boot Tuesday morning a week ago from Kelley aide David Hage. When Hansen asked Hage how long she had to clear out, she says, Hage glanced at his watch and replied, "Oh, till about noon."

Hansen has written a letter to Lanier describing Kelley's firings as putting the city "at risk." Hansen predicts the first symptom will be delayed vendor payments, followed by investment problems as the remaining staff finds it doesn't have the knowledge to detect or fix things in the complex computer program. She acknowledges Kelley's right to choose his own staff, but says "he has dismissed personnel who performed critical jobs related to the city's operation."

One purpose of Kelley's purges, say former key staffers, is to allow him to place his political apparatchiks in control of the city's most sensitive financial functions. To replace Hansen, for example, Kelley turned to his former council aide, Bill Stevens, an attorney whose computer experience derives from a stint as a programmer for Brown and Root back in the '70s. Stevens took the heat for Kelley during an Ethics Committee probe of Kelley's interest in a house in the Heights that had been scheduled for demolition. The committee investigation found Stevens in violation of city ethics codes, but that won't keep him from administering the city's highly sensitive financial management system.

Former staffers say that when Kelley's people took over in January, they offered assurances that jobs were not in jeopardy, even as they prepared to get rid of key division directors. At one meeting, Kelley harangued the directors, telling them "here's the way it is. Anyone who wants to work in this office for what I want to pay 'em has a job. But I don't want anyone to feel like they're a hostage, so anybody that doesn't want to work for me should go and get another job." When one director questioned whether the jobs were really safe, Kelley repeated his statement.

"That was a lie," says one ex-director, "because right then they were already starting to make up their next layoff list." That list included three executives, Sue Bailey, Tony Pattio and Fred Clarke, and half the office's internal audit staff. Even then, longtime execs such as Hansen hoped the worst was over. Then, two weeks ago, Hage and Stevens called the directors in and presented them with new lists of staffers to be terminated, including three key staffers under Hansen. And last week, Hansen and two other executives were gone.

"I think the controller's office will never again be able to hire professional people," says a former staffer sadly. "It has been decimated."

Worry about the state of affairs in the controller's office may also be taking root on City Council, which regularly rebuffed Greanias in his battles with Lanier. One Council source says of the ousted directors: "That's a crew that was dedicated to the city and not to any one individual, not to Lance Lalor or to George Greanias. The controller's office was there to be a watchdog, a checks and balances for the city, and now I'm concerned."

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