By Sean Pendergast
By Sean Pendergast
By Sean Pendergast
By Jeff Balke
By Richard Connelly
By Jeff Balke
By Casey Michel
By Craig Hlavaty
And yet, after the fatal accident, First Transit promoted Kidd to a nondriving supervisory position.
Why does Metro continue to reward First Transit multimillion-dollar contracts?
"It's all about the money," says Allen. "Metro didn't have to pay the Rodriguez family $10 million; First Transit did. Metro's attitude is 'Oh, well, the skin's off their nose, not ours.' "
To recap: If a First Transit driver causes a fatal accident, the private company may be forced to dole out millions to the grieving family. Metro pays nothing. And when it's a Metro driver doing the killing, the authority only has to fork over a maximum amount of $100,000, which hardly dents its $273 million annual operating budget.
"Metro is not being held accountable," says Houston attorney Richard Mithoff, who represented the Rodriguez family, "and there's no incentive for them to improve."
The Chronicle has frequently reported that Metro's contract with First Transit saves it $5 million a year, mostly through lower wages. But there's another way Metro capitalizes on use of the private company.
Written into Metro's contract with First Transit is a section called Liquidated Damages, defined as fees assessed "if the contractor fails to comply with certain minimum performance standards." The contract spells out the types of infractions and their corresponding fees, which at first glance wouldn't seem to amount to much.
For instance: If a First Transit driver doesn't have a valid Texas driver's license, Metro deducts $25. If a First Transit driver operates a bus that is unclean or has a damaged seat, Metro docks $50. If a First Transit driver misses a trip, Metro is compensated for each trip plus $100. And so on...
"It's not a penalty," insists Jim Laughlin, Metro director of transportation programs. "It's a deduction of money for services not rendered."
However Metro spins it, First Transit's incompetence has not only made Houston's streets more dangerous. It has also saved Metro a bundle.
The Press requested a list of all liquidated damages reported since First Transit's contract began, and discovered that it's not at all uncommon for Metro to deduct tens of thousands of dollars each month for the abuses listed above. Altogether, assessing liquidated damages has saved Metro more than $1.2 million from January 1997 to the present.
Metro saves itself additional money by nickel-and-diming its victims.
Federal and state safety regulations require Metro to keep investigation files for all accidents that result in injury or death. These files comprise police reports, witness statements, insurance claims, medical expenses and, if necessary, legal documents and autopsy reports. The files are often several inches thick.
While examining more than a dozen investigation files, the Press discovered internal memos and e-mails circulated among Metro attorneys and claims adjusters who negotiate settlements with victims and their families. These documents offer a revealing insider's look into how Metro treats its victims and the factors it weighs when determining how families should be compensated.
On June 4, 2002, a Metro trolley killed 48-year-old construction worker Clinton Gregory Jr. as he crossed Milam at Prairie. The trolley hit and dragged Clinton with its left front tire. The Houston City Council responded with a public hearing on pedestrian safety downtown and later passed its first pedestrian-protection ordinance.
Two months after Gregory's death, the issue still wasn't going away, much to Metro's dismay.
"Due to the high-profile nature of the claim (the first of trolley/pedestrian accidents), we run the risk of more 'bad press' if the settlement process is prolonged," Metro claims supervisor Elaine Lum warned in an internal e-mail dated August 12, 2002, and sent to senior attorney Randy Frazier Jr., director of risk management Tim Kriner and claims manager Irma Salazar. "Therefore, I am asking that you please contact each of these attorneys directly to coordinate the documents we need in order to pay this claim."
Other internal documents demonstrate Metro's efforts to save a few bucks, even when the evidence is heavily stacked against it.
On June 20, 1999, Father's Day, a Metro bus killed 71-year-old pedestrian Gustavo Tamez. The rear right tire crushed his skull. Metro's investigation found that the driver was off-route at the time of the accident and fled the scene.
"MTA does not have a defense," reported Metro's claims committee. "The bus operator lied about his involvement...I cannot perceive how we cannot do anything but accept liability for the accident."
Metro successfully concealed from the public its shared responsibility for Tamez's death. The driver had failed a drug test days prior to the accident, and Metro let him get behind the wheel anyway.
"Our bus operator had been given a random drug test four days before the accident and had tested positive for marijuana. The post accident results however, were negative...Even though he tested negative on the date of the accident, it does not look good for us that we did not pull him as soon as we had knowledge that he had tested positive for marijuana..."
Metro's claims committee recommended a settlement of $95,000.
Kriner began negotiations at $87,500; the family settled for $91,000.
The Press asked Metro's spokeswoman why it routinely lowballs its victims.
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