MTA Going to Potts?
Brown backers attempt to jump on the political HOV lane
For the past two Houston mayors, driving the Metropolitan Transit Authority has proven a test of political agility and administrative foresight upon which their careers have floundered or flourished. Lee Brown has been in office less than a year, but there are indications that his long-term mayoral future may also depend on how well he masters the complicated mass-transit game.
Since Brown took office last January and abruptly flushed out predecessor Bob Lanier's five Metro board appointees and replaced them with his own team, dissidents remaining on the board and in the agency structure have made no secret of their view that Metro is careening toward ethical problems in the awarding of contracts because of undue influence from the mayor's inner circle.
A case currently under the microscope is the impending selection of a new Metro general manager to replace the retiring Robert MacLennon. According to Metro sources, the odds-on favorite to get the job is Louisianan John Potts, despite his track record as a mediocre or worse transit chief who left Detroit and New Orleans under barrages of criticism from his former employers. What the Harvard-educated Potts has going for him, say these critics, is a connection to a key mayoral adviser who in turn is a pal of the new board vice chairman. If Potts is hired, highly regarded deputy general manager Fred Gilliam, who has been groomed for the last two years to succeed MacLennon, would almost certainly resign.
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"In my opinion, it's dirty, unethical, immoral," says one board member of the drive to hire Potts.
While Lanier and former Metro chair Billy Burge praise Gilliam's credentials, Potts's media clips are downright radioactive. Former Detroit Mayor Coleman Young blamed Potts for leaving the Detroit agency "in a damn shambles" in the early '80s. More recently, he was forced out as general manager of the New Orleans Regional Transit Authority last year. An unnamed board member told the New Orleans Times Picayune: "You know when you're a misfit.... You submit your resignation and you move on." Potts, currently a transit consultant living in New Orleans, was unavailable for comment.
Metro, with a $630 million annual budget, is a rich hunting ground for contracts for everything from bus purchases to road construction, and recent efforts by board members to get involved in the purchasing process had already raised concerns that transit politics and business may be getting too mixed. Agency insiders figure Potts is a front-runner primarily because he is an old friend of Danny Lawson, a key fundraiser and adviser to Mayor Brown who until recently worked for bus companies that sought and won sales contracts with transit agencies, including one headed by Potts. Lawson, in turn, is close to the new vice chair of the Metro Board, Ira Scott Jr.
Potts was included in a group of candidates selected for the board by search firm Spencer Stuart, the same firm that recruited Lee Brown for police chief of Houston in the early '80s. Several Metro sources claimed that the firm was asked to look at Potts's credentials by Lawson, a claim he denies. Spencer Stuart executive Lou Riegle did not return an Insider inquiry.
A Metro source suggests that the real play is more subtle than the above chain of connections might suggest. "Lawson and Scott don't intend to do business with Metro themselves because the mayor wouldn't allow it. The real plan is to get a tool in as general manager and then get their friends from around the country business with Metro, and those friends then provide business opportunities for them elsewhere."
"I don't know where that's coming from," retorts Lawson sarcastically. "That's too sophisticated for me. I certainly haven't gotten to that level, and I don't know who has."
The board selection committee is expected to submit a final list of candidates to the full board this week. Potts and Gilliam made presentations to the committee several weeks ago. At least one other candidate may be included, but according to several Metro sources on and off the board, Potts "is a done deal" -- at least for now. Of course, that was before the dissidents began ringing media phones with complaints that the search selection has been rigged to hire Potts.
The mayor's ties to Lawson have been cited since the beginning of his administration as a potential source of trouble, because of Lawson's vested interests in the transit biz. Brown seems oblivious to the appearance of impropriety.
When Lawson was interviewed by the New York Times in 1986 about his success in the bus business, he was asked why his biggest contracts had come from cities with black mayors, including New Orleans. "The political environment," replied Lawson succinctly, "is one that we have used as a plus."
"I've known him for years," the mayor said of Lawson, in a recent interview with the Press. "He's one of my advisers as well. Danny's more interested in transportation issues, and so he's been advising me on transportation issues.... Danny sells buses, that's what he wants to do."
At least what he used to want to do. "I made a decision in 1997 to try and become a developer," says Lawson. "I want to be a developer a lot like Bob Lanier and Billy Burge, and I'm looking at a lot of development opportunities in Houston." Just as some of Lanier's associates benefited from city-related development projects, Lawson should have some excellent opportunities over the next several years because of his close ties with Brown.
According to a former Brown campaign official, Lawson raised "the only serious black money in the campaign." At the time, Lawson described his candidate as "a cross between Nelson Mandela and Tiger Woods."
"I'm told he feels some obligation to Danny," says one Metro source, of the mayor. "But this guy could bring him down if he doesn't watch it. He could make him a one-termer if he doesn't watch it on some of these things."
That sentiment may be an exaggeration of Lawson's significance, but recent Houston history demonstrates that Metro can be either a graveyard or a launching pad for mayoral aspirations.
Kathy Whitmire's determination to build a rail system fueled the opposition that united to end her decade-long tenure in 1991. Conversely, the Metro chairmanship provided developer Bob Lanier with the public profile necessary to successfully challenge Whitmire on the rail issue. After he was in office, Lanier used massive transfers of Metro dollars to underwrite his initiatives to hire more police and rebuild inner-city infrastructure, programs that cemented his popularity through three terms.
Brown, an advocate for some sort of light-rail program, wasted no time after his election in bringing in his own team to replace Lanier's anti-rail allies on the Metro board. When the five appointees came on board, the largely unknown Ira Scott immediately assumed the vice chair position. Former Metro chair Holcombe Crosswell, who was brusquely replaced by county appointee Robert Miller as chair, says Scott is widely assumed to be the real power on the board.
Immediately after Brown appointed the new board members, chairman Miller attempted to delay a $60 million purchase of Canadian New Flier buses, despite the fact that the contract was considered a good deal for the agency. Lawson has made his living getting transit agencies to lease buses rather than buy them, and the delay was seen by critics as preparing the way for a lease deal. Under the Lanier administration, Metro rebuffed pitches from Lawson.
"They tried to submarine that great low bid we had on those buses -- no one in their right mind would have killed that deal," says former chair Crosswell. "For an outfit like Metro with cash, there's no benefit whatsoever to lease. That's just a way for somebody to get some business."
The somebody was widely seen to be Lawson, who pushed just such an arrangement in New Orleans for his client, Penske Leasing. After Crosswell and others helped publicize the delay, the Houston board voted to approve the purchase. But an addendum to the contract will come before the board this fall.
"Miller's trying to rush the general manager selection right now because we've got this big bus order coming," says a Metro board member. "Behind all this is the 247 buses that are about to be ordered as an addendum to the original contract. What they're going to try to do is come up with a deal to lease the buses to conserve cash for the new railroad.... Save the money for rail by leasing the buses, and then wait till you see who they lease them from."
Vice Chairman Scott, whose association with Lawson dates back to their college days at Oklahoma State, scoffs at allegations he and Lawson are a team pushing Potts for the general manager job. "I don't think that's the case. I vote my conscience. I'm about sound business decisions, and I will continue to be. I won't bend on that whatsoever."
Scott, the son of a well-known HISD junior high school principal, is a former executive with Exxon who later worked as a business consultant for Metro. He joined Brown & Root as a supervisor of the Greater Houston Wastewater program's minority contractor recruitment program. At the time, Scott supervised a management subcontractor, O.A. Phillips, owned by a low-profile City Hall player named Acie Phillips.
Although Scott supervised Phillips's operations, several former employees of the program recall that at meetings, Phillips seemed to be calling the shots. "When Acie and Ira got together, Acie promised to keep him politically connected. Ira did what Acie wanted," recalls one former co-worker. "Ira didn't have a clue what to do."
Scott also supervised Rosalie Brockman, a program administrator who came under federal scrutiny in 1995 because of her personal and business connections to then-councilman Ben Reyes, later indicted in the Hotel Six federal investigation of bribery-conspiracy at City Hall. Betti Maldonado, another sting indictee, was preparing to join Scott's crew at Wastewater when the FBI sting went public and blew away the deal.
"He was Rosalie's boss," says a former employee in the program, of Scott. "Some of his political clout came from knowing Ben right then." Scott recalls meeting Reyes "maybe once," and doubts the councilman hung out at the offices frequently, as co-workers claimed.
The former co-worker says he was amused when Scott was named to the board and touted as a regular bus rider. "The joke I saw was the claim he rides the bus. I remember most of the time he drove." This source figures Scott was ideal for Metro because he's a seasoned bureaucratic operative who will do whatever he's told.
"We've all talked about this and laughed," says another wastewater program alumnus of Scott's sudden prominence as Metro vice chair. "It's the Peter Principle in action."
Scott served on Mayor Brown's campaign-finance committee last year, but denies he played much of a role in raising money for the candidate. He said he only made a small financial contribution to the Brown election bid. Records showed Scott donated $3,070 -- an impressive amount for a lower-level wastewater executive. He still works in that program, though he has shifted from the payroll of Brown & Root to contractor Montgomery Watson.
Asked whether he's had business dealings with Danny Lawson in the past, Scott quickly answers, "None." He later elaborated that, before he joined Metro, "I was doing my job at the time ... well, not really, it was not exactly my job at the time. I was trying to help advise him on a potential business opportunity, and that's what I do. No financial agreement, no arrangements, no business commitments -- nothing. He just wanted me to listen."
Scott also denies he's a big proponent of leasing buses rather than buying them. Temporarily forgetting that he's supposed to be an avid bus rider, Scott says, "I just know from a personal standpoint, leasing rather than buying a car doesn't sound like the right thing to do. Now when it comes to a bus, I would assume it's the same logic, it's just a bigger vehicle."
The Metro vice chair won't say he's supporting Potts for the general manager job, but allows that the candidate impressed him during face-to-face talks. As for all those corrosive comments about Potts from previous employers, Scott figures it's nothing out of the ordinary.
"Well, I wouldn't say it was negative," says Scott. "I would look at it and characterize it as possibly learning experiences [for Potts].... I'd say everybody we interviewed had a similar situation of some type in their history."
Danny Lawson, the former transit man and future developer, was briefly a defensive cornerback for the Washington Redskins. "I was extremely fast and always scared," he recalls of his short pro career. Lawson acknowledges that he's close friends with Mayor Brown, Metro vice chair Scott, and prospective general manager John Potts. Lawson says he's known Potts 25 years and thinks he'd be an ideal Metro chief.
"Yeah, I think he should be the general manager. But I'm not on the board, so my role is questionable," says Lawson. "My role is as a citizen, a person who is an adviser to the mayor. I have not talked specifically to Lee Brown about John Potts's candidacy for the general manager job, but he knows how I feel about it."
Lawson describes Potts as "an extraordinary person who is a lot like Lee Brown."
According to Lawson, Potts's problems in New Orleans and Detroit have to be taken in the context of his long and successful career at a number of transit agencies and the private ATE management company. Potts also balanced the budget of the troubled Regional Transit System in New Orleans during his 17-month tenure, says Lawson.
Potts contributed more than $3,500 to Brown's campaign fund last year, a gift Lawson admits he solicited from the consultant.
"He contributed because I asked him to contribute," says Lawson. "I raised money across the country, and when you raise money, the first thing you do is go to your friends." According to Lawson, in the early stages of the campaign it was difficult to raise money for Brown in Houston. "We, being people around Lee Brown on his finance committee, had to go to other cities, and that's one of the things I did." Tapping into his New Orleans connections was one of the ways Lawson found campaign money.
The Brown election has strengthened ties between New Orleans and Houston political circles, claims one Metro source.
"The connection is becoming more and more prevalent, and Danny is the glue that's bringing it all together," comments a member of the Metro bureaucracy. "He's positioned himself to be a power broker for Brown."
Robert Miller, the county appointee to the Metro board who was selected by Brown as chair, denies that the selection of a general manager is being manipulated by political considerations. "Until we designate finalists, I'm not going to comment on any of the candidates," says Miller. "I've asked other members of the committee not to do so as well, and obviously, some are not refraining." The chairman says the selection is proceeding in an aboveboard manner, and says charges that it is politically rigged are false.
A fellow board member figures Miller may not be on the scene much longer. "Ira is to be the next chairman of Metro," says this member. "I suspect the chairman is embarrassed by all this and will resign for business purposes after the new general manager has been put in place."
The hiring of John Potts, if it happens, will increase Lawson's already high exposure as one of Brown's chief political liabilities. Since opposition to the gestating Main Street rail proposal seems nonexistent at the moment, perhaps the one sure-fire way to re-energize the opposition would be to name a politically tainted head of Metro.
Former mayor Lanier, a supporter of Brown, says the selection of the new general manager could prove to be a crucial hire.
"I think this is going to be a very important appointment for the Brown administration , particularly since it will be spotlighted in the coming rail election, if it comes to that." To convince Congressman Tom DeLay to support federal funding for the project, and to win the inevitable transit election, Lanier figures that "the leader of Metro is going to have to inspire confidence. He really does need to be a well-qualified person."
If Brown's surrogates do not choose well, their boss may pay dearly somewhere down the line.
Help The Insider in his perpetual probe of the powers-that-be. Call him at (713) 280-2496 or e-mail him at firstname.lastname@example.org.
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