Former HCC Lawyer: Trustees Wanted to Make Multimillion-Dollar Bond a "Private Slush Fund"
If you believe Renee Byas, her tenure at Houston Community College was an incredibly rocky one. Shortly after joining HCC as general counsel in 2008, the college, one of the country's largest community college systems, was rocked by allegations that board members shuffled contracts to family members and demanded kickbacks from vendors. She hired an outside firm to launch an internal investigation, which found that several trustees abused their office.
By 2012, as HCC prepared a record $425 million bond package that voters would ultimately approve, the board of trustees promised change. Byas helped draft new rules meant to quash any hint of favoritism in handing out contracts - the new rules banned vendors from giving gifts to trustees, limited financial contributions from vendors to trustees' political campaigns, and expanded conflict-of-interest questionnaires, among other things.
But the trustees bristled at one new rule in particular, according to a counter-suit Byas filed in court this week: instead of handpicking the numerous contractors for each of the bond's 14 major construction projects, the new rules required that the board tap 14 "construction managers at risk," general contractors large enough to put up a $2 million bid bond. Those firms would then tap the numerous local subcontractors to finish the job.
Meaning the trustees - if they wanted to - would have a tough time micromanaging the bond and shuffling contracts to friends and family, as they've done in the past. But Byas claims that's exactly what HCC trustees wanted to do this time around. In a counter-suit filed this week, Byas claims HCC terminated her because she wouldn't play ball - and because she talked to the FBI when federal investigators came sniffing around HCC last year.
Byas alleges her firing "is HCC's attempt to silence a public servant who refused to let HCC's Board of Trustees use a $425 million public bond project as a private slush fund."
In her suit, first reported by the Chron yesterday, Byas says she first began to feel pressure from trustees "to skirt the procurement process" when she took over as acting chancellor in January 2013. In particular, she claims board chair Neeta Sane repeatedly asked her to bend the rules. She points to a four-hour meeting with Sane and trustee Chris Oliver in January 2014 during which Sane and Oliver tried to convince her "to abandon the strict procurement rules because people in their districts 'wanted contracts.'" At one point during the meeting, Byas alleges, Sane even showed her a list of firms she wanted to get bond contracts.
Trustees wouldn't respond to specific questions yesterday. Board chair Sane sent this statement: "While I cannot speak to any matter relating to a former employee, I am nonetheless disappointed in the claims she has made. I look forward to the truth coming out through the legal process and validating the college's position."
Byas also claims that while attending a conference in Santa Fe, NM, in March 2014, Sane and trustees David Wilson and Robert Glasser "repeatedly cornered" her, wanting to know why she wouldn't revise the terms for awarding bond contracts.
What makes these allegations so remarkable is the timing. Right as trustees, according to Byas, were begging her to bend the rules, another trustee was already under investigation for allegedly steering a firm to hire one of his friends as a subcontractor.
Like clockwork, soon after HCC awarded its first construction manager contract to Jacobs Management, a national engineering and construction firm, concerns that a HCC trustee had meddled in the process popped up. As outlined in this Chron story from last year, Michelle Morris, an outside attorney retained to monitor HCC's bond contracts, grew concerned when she noticed Jacobs had hired a little-known firm called Five Woods for "public outreach" -- to the tune of $1.4 million.
It wasn't just the price (that's some expensive "outreach") that made the Five Woods contract seem odd. The firm was owned by a friend of HCC trustee Carroll Robinson and had no experience in public or community relations (it was mainly a janitorial and landscape services company). "When I pressed Jacobs about how they came to select Five Woods the Jacobs representatives became very nervous, finally revealed that the Five Woods representative was 'sent' to them by Trustee Robinson," Morris wrote in an email to the college. "Again, the response from Jacobs to me is a nervous one, and they outright told me that they are in a 'precarious position' (their words, not mine)," she wrote. (Ultimately, Five Woods was not picked for the job).
So Byas hired the law firm Gardere Wynne Sewell, LLP to investigate the matter. Byas in her counter-suit claims trustees regularly pressured her to fire Gardere and kill the investigation; she refused to do so. It was around this time in November 2013, Byas says, that the FBI first contacted her. By January, she was talking with federal investigators over the phone and in person, sharing her detailed notes. Byas even went into full-undercover-spy mode: her lawsuit says she "recorded conversations with Trustees so she could document the numerous instances that Trustees pressured her to break the law."
Byas' lawsuit begs an obvious question: did her firing change the outcome of the Gardere investigation? The final report, which was finished after Byas was put on leave and replaced by another board-picked attorney, concluded there was no reliable evidence that Robinson tried to help a close friend bag a multimilion-dollar contract. Robinson declined to be interviewed by the Gardere investigators his own board had hired to look into the matter.
The morning of June, 6, 2014, soon after incoming Chancellor Cesar Maldonado took the reins at HCC, Byas says she was called into his office. Maldonado, flanked by a HR rep, read from a script, and "explained that Ms. Byas was being placed on administrative leave while HCC investigated the validity of her contract."
But board trustee Sane emailed Gardere investigators that very same morning, telling them to share everything with a new lawyer hired by the board, Vidal Martinez, who would oversee the Gardere investigation. Board meeting records make no mention of Martinez being hired; Byas claims he was hired in executive session, an apparent violation of the state's open meetings law. High-profile attorney Rusty Hardin, who's representing Byas, claims Martinez told witnesses called in for questioning during the Gardere investigation not to answer any questions under oath.
Byas filed a grievance after she was placed on leave, and eventually went before an administrative hearing to determine whether the board could legally fire her. HCC laid out this argument: Byas' contract extension, under which she'd worked for nearly a year at that point, was invalid because she signed and turned it back in to HR five days late. HCC also argued the board chair that signed her contract extension didn't have approval from the full board.
Former Texas Supreme Court Justice Tom Phillips, who was brought in to mediate during HCC's administrative hearing, disagreed with HCC and sided with Byas.
So HCC went to court in September, suing and asking a judge to void Byas' contract ("adding insult to injury" Byas says in her counterclaim, HCC also asked that the judge force her pay HCC's legal fees for the lawsuit HCC filed against her to void the contract).
"I'm amazed that they're not embarrassed to raise this issue," Hardin told the Press Tuesday. "I look forward to them raising it in court with a straight face."
When board chair Sane was brought in to testify at Byas' administrative hearing, Hardin says he tried to ask her about the Gardere investigation, allegations the board was trying to skirt the bond rules, or about the FBI's apparent investigation into this whole mess. "She just turned to the judge and said, 'I am here only to answer questions about a contract. I'm not answering questions about anything else,'" Hardin said. "So, we really look forward to being able to visit with her now."
Under oath, of course.
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