Four Crazy Things We Learned About HCC Before It Settled the Renee Byas Lawsuit
At first it just looked like a simple contract dispute. Last September, Houston Community College sued Renee Byas, the college system's former general counsel, hoping to invalidate her employment agreement with the school. HCC claimed that Byas had been “insubordinate” and that a closer look at her contract extension revealed sufficient cause to fire her (namely that only HCC's board chair, and not the entire board of trustees, signed her latest contract extension, which Byas apparently turned back in to HR five days late).
Byas, however, came out with fists swinging. In court filings over the past year, she's let loose a steady stream of searing allegations that, if true, point to deep, systemic corruption at one of the largest publicly funded community college systems in the country.
Byas claims that HCC trustees began to buck hard against new rules meant to act as a buffer between trustees and a $425 million pot of public bond money – rules meant to keep trustees from micromanaging the bond money and shuffling lucrative contracts to friends and family, as they've been known to do in the past. In a counter-suit she filed against HCC last fall, Byas claims the school fired her in an “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."
Unfortunately, we may now never know why HCC really fired Renee Byas. As the Houston Chronicle reported this week, HCC trustees have voted to settle the year-long court battle with its former top lawyer. “We remain confident in our case and in ultimately prevailing should this case have gone to trial – but at what cost?” board president Zeph Capo said before voting to approve a settlement.
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It's an odd sentiment, considering Byas didn't make a public peep about her allegations against the board until HCC sued to invalidate her contract (and asked for a judge to force her to pay for any legal costs the school incurred while suing her). Simply buying out the remaining months of Byas's contract would likely have cost less than the $1.2 million outside lawyers have already billed for representing the college in its legal fight. (The Chron reports that HCC will pay at least $150,000 as part of the settlement; Byas's lawyers told us she'll likely sign the final agreement later this week.)
And on top of that, HCC's hired-gun lawyers spent much of their time in court aggressively fighting to shield certain internal emails, memos or other communications from public scrutiny. In court filings, HCC argued that Byas was using the college's own records as a “bludgeon against her former employer and colleagues” and that her counter-suit amounted to little more than a “smear campaign.” Which begs the question: How much taxpayer money did HCC spend trying to keep taxpayers from seeing its own internal records?
Here's a look back at what allegations and records did manage to spill out during the Renee Byas case.
HCC trustees really don't like it when you investigate them.
Byas claims that not only did she face near-constant pressure to skirt the bond rules while she was at HCC, but that trustees also urged her to kill an investigation into one of their own.
In 2013, when Byas was serving as acting chancellor for the college, an outside attorney named Michelle Morris, who'd been hired to monitor the bond award process (because that's how much oversight the HCC board needed), thought she'd discovered a problem. HCC had just awarded its first major bond contract to the national engineering and construction firm Jacobs Management, which in turn hired a little-known subcontractor called Five Woods to do “public outreach” in exchange for a whopping $1.4 million cut.
Morris warned college administrators that Five Woods, until then a janitorial- and landscape-services company, had little to no experience in public outreach and that the company's owner was also a close friend of HCC Trustee Carroll Robinson. “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 told the college in a 2013 email.
Five Woods ultimately didn't get the job, and Byas hired the law firm Gardere Wynne Sewell LLP to look into whether Robinson tried to shuffle bond money to a buddy (something Robinson has vociferously denied). In court filings, Byas alleges that trustees regularly pressured her to fire Gardere and kill the investigation; she refused. Byas further claims that Robinson even tried to get trustees to hold a no-confidence vote against Byas (again, Robinson denies this).
It was around this time that Byas started cooperating with an FBI investigation into the college and even began wearing a wire when she talked to trustees in order to “document the numerous instances that Trustees pressured her to break the law,” according to her court filings. Byas alleges that by the summer of 2014, the HCC board hired well-known local attorney Vidal Martinez to scrutinize and, if possible, poke holes in Byas's employment contract with the college.
Here's another funny thing about that Gardere investigation that came out in the HCC v. Byas lawsuit: The same morning last summer that HCC put Byas on administrative leave and ushered her out of the building, then-board chair Neeta Sane sent an email to Gardere investigators ordering them to share everything in their inquiry with Martinez. The investigation would eventually conclude that there was no evidence of impropriety on Robinson's part (Robinson, it should be noted, wouldn't cooperate or submit to an interview with investigators).
When we interviewed Byas's attorneys about this whole mess last year, they mentioned that email, so we asked for a copy of it. HCC's lawyers threw a tantrum when we first mentioned it in a story, citing the email as evidence Byas would leak “privileged communications to local reporters in attempt to obtain favorable coverage.” It was the first time HCC would ask for a judge to seal a thick binder full of internal records from a taxpayer-funded institution so those records wouldn't be made public if filed in court.
At the very least, that email shows that the Gardere investigation – the one that effectively cleared a trustee suspected of steering a $1.4 million contract to a friend – was put under the watch of a new, board-appointed attorney just as Byas – who, if you believe her, faced repeated pressure by that same board to kill that investigation – was being shown the door.
HCC trustees aren't representatives of the public...?
In its fight to seal internal records, HCC's attorneys also wanted to seal or redact certain communications between the college's lawyers and HCC trustees. Here was their main argument: Members of the HCC Board of Trustees are “representatives of the college” and that anything shared with them by an HCC attorney (like, say, Renee Byas) falls under attorney-client privileged information and should be hidden from public view.
It's an argument that local State District Court Judge Jeff Shadwick literally scoffed at when HCC attorneys presented it in court. In denying much of the college's request for secrecy, Shadwick gave HCC this bit of advice:
"HCC and the Court apparently disagree about the role of the HCC Board of Trustees (the "Board") in relation to the attorney-client privilege. The Court believes that the Board represents the public and, in fact, is the public. When HCC communicates with its Board it is communicating with the public. The Board is not just another administrative department; it is distinct from HCC as an entirety. Trustees lose their way when they forget this, and HCC cannot pull the Board in close as a means of protecting information and disqualifying public watchdogs from doing their duty to the public."
HCC Chancellor Cesar Maldonado has a funny definition of “insubordinate.”
Renee Byas claims that shortly after HCC trustees tapped Cesar Maldonado to be the college system's new chancellor, she reached out to bring him up to speed on ongoing corruption investigations into board members and whether they were using the $425 million bond fund like a private piggy bank; she also thought Maldonado might like to know the FBI had been sniffing around.
According to a whistleblower's complaint Byas filed with HCC upon her firing last year (which HCC thinks shouldn't be a public record), “Dr. Maldonado made it clear that he did not want to discuss the current status of the investigation.” Instead, he put Byas on administrative leave while the college continued to investigate the “validity” of her contract.
Byas's whistleblower's complaint ultimately led to an administrative hearing at the school mediated by none other than former Texas Supreme Court Justice Tom Phillips, who, after hearing 14 hours worth of testimony from Byas, Maldonado and others, wrote that HCC had “failed to demonstrate good cause” to fire Byas. According to Phillips's report (which, again, HCC doesn't think is a public record):
"I am not persuaded that Ms. Byas's admitted attempts to discuss ongoing corruption investigations with the Chancellor-designate in April and May 2014 constituted, in whole or in part, good cause for termination...While Ms. Byas might well have irritated her presumptive superior by raising the issue a second time, thereby giving rise to a perception that she would not be an easy employee to manage, I do not believe that her choice to try again was wrongful or insubordinate."
Bribes, kickbacks and Fight Club!
Even while she had a hostile relationship with HCC trustees, Byas had a cooperative, ongoing relationship with federal investigators while she led HCC's legal department, according to her court filings in the case.
Byas claims that in 2011 and 2012, she spoke with federal prosecutors who had subpoenaed HCC documents related to bond money, vendors, bond counsel and RFQs that trustees had issued for certain projects. Byas also says that around that time, an FBI investigator came around and started asking her about various HCC vendors, the so-called Veselka investigation (which, among other things, concluded that an HCC trustee steered work to her son's construction company and got fees and campaign consulting services from another HCC vendor), and that the FBI wanted information on six former and current HCC trustees.
Byas claims she continued to meet with FBI special agents from late 2013 until June 2014, when she was forced out.
Among the topics Byas claims she discussed with federal investigators, according to court filings:
– That one HCC trustee (whom she doesn't name) took free trips to places like the Caribbean with an HCC vendor on said HCC vendor's private jet.
– That three trustees “entered into an agreement with an individual that the three Trustees would convince the HCC Board of Trustees to buy property from the individual and, in exchange, the three Trustees would receive 10% of the money that HCC paid to the seller.”
– That (and here's the kicker) “during a closed session meeting an HCC Trustee had accused another Trustee of accepting bribes and kickbacks and how the accused Trustee started punching the accuser.”
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