Met Council official’s ties to business questioned

07/25/2005

Paul McEnroe and Tony Kennedy,
Star Tribune
July 25, 2005

A high-ranking member of the Metropolitan Council is benefiting from a $200,000 government consulting contract related to a major transit issue in St. Paul.

Chris Georgacas, first vice chair of the Met Council, said he has no conflict of interest even though the funds flowed through the Met Council. A Hamline University professor disagrees, and two public officials involved in the matter have now raised concerns about appearances.

The contract for spreading awareness and gathering feedback on plans to improve travel along St. Paul’s Central Corridor also provided income to a language translation firm operated by the sister of Met Council member Song Lo Fawcett, records indicate.

Fawcett said she was unaware of her sister’s involvement.

Georgacas said he recused himself from the Met Council vote that sent federal tax dollars to the Ramsey County Regional Railroad Authority. The Railroad Authority, in turn, selected Georgacas’ firm, St. Paul-based Goff & Howard, as its Central Corridor public relations consultant. The contract has $70,000 left and billings are continuing.

Chris GeorgacasGeorgacas also recused himself from voting on future Central Corridor issues and has not personally worked on the contract with the railroad authority, he said. He said he took those steps because it was “my hyper-cautious way of doing the ethical thing.”

The Railroad Authority’s selection of Goff & Howard’s team came in September 2003, eliminating three other competitors.

One month later, the Met Council—with Georgacas abstaining—voted to deliver to the Railroad Authority $1.7 million in federal funds from which the Goff & Howard contract was funded.

The Met Council is one of two designated conduits for federal transportation dollars in the Twin Cities. The Central Corridor is the 11-mile stretch from downtown St. Paul to downtown Minneapolis that has Interstate Hwy. 94 and University Avenue as its transportation backbones. The community is discussing whether the corridor should be improved with a light-rail transit line or improved bus service.

Met Council Chairman Peter Bell agrees that Georgacas is personally benefitting from the Railroad Authority contract. But he sees no conflict of interest.

“I think this is a story of how government works well,” Bell said.

Georgacas, former chairman of the Minnesota Republican Party and campaign chairman in 2002 for Gov. Tim Pawlenty, said he was a principal officer and 5 percent shareholder of Goff & Howard when the contract was awarded. Since January 2005, he has been the firm’s president.

Bell said that Georgacas didn’t initiate the contract process, that he disclosed the situation to him and that Georgacas’ firm didn’t have any insider information in making its pitch. Bell also said the Railroad Authority chose Georgacas’ firm independently.

Moreover, the Met Council chairman said he is not aware of any prohibition against Met Council members benefitting financially from grant money flowing through the Met Council as long as full disclosure is made and self-dealing is avoided. Met Council members are appointed by the governor and serve part time, earning $20,000 a year for their work on transportation and other regional policy issues.

Bell said members of the council have a right to make a living in their private lives.

“Our regulations don’t say that you can’t apply for a grant. They say that if there is any conflict, you need to make that known,” Bell said. “How we deal with conflict is sunshine.”

State regulations on conflict of interest involving public officials are broad and the Ethical Practices Board has offered opinions on a case-by-case basis. Overall, the Ethical Practices Board has said a potential conflict of interest exists only when an official votes on a matter that will substantially affect the official’s financial interests (businesses included) in a greater way than it will affect similarly situated individuals or businesses.

Government ethicist David Schultz of Hamline University said Georgacas’ disclosures and recusals don’t change the fact that he “has got an ongoing conflict of interest.” The conflict, Schultz said, is that Georgacas is benefitting financially as Goff & Howard continues to bill the Railroad Authority for services at the agreed rate of $115 an hour.

Tom Horner, co-founder of one of the losing bidders, Himle Horner, said Himle Horner wouldn’t have bid for the Railroad Authority contract if one of its principal officers was on the Met Council.

“When we go into public service, we acknowledge that it is going to close the doors to some business,” Horner said.

Kathryn DeSpiegelaere, director of the authority, said she doesn’t believe the authority violated any conflict of interest clauses set forth in the contract.

Still, public officials—on the Met Council and the authority—voiced concerns about perceptions of impropriety:

• Fawcett said she would not have voted to send money to the Railroad Authority had she known that her sister’s language interpreting company, Pata Pata Inc., was a partner with Goff & Howard in the winning bid.

“I would have recused myself, just because it would have been a perception of some type of a conflict,” Fawcett said.

Fawcett’s sister at Pata Pata, Ong Thao, could not be reached for comment.

• At Met Council meetings in June 2003, Georgacas displayed his opposition to putting a light rail in St. Paul’s Central Corridor by twice voting against the concept. Now his voice has been silenced.

Susan Haigh, then a member of the Railroad Authority, said she raised the issue of Georgacas’ views on Central Corridor transit options before the contract was awarded.

“My perspective was, ‘Well, this seems kind of strange to me that we would be trying to have someone help us with grass-roots communication who fundamentally doesn’t even like this,’” said Haigh, who is now executive director of Twin Cities Habitat for Humanity.

She said her concern was addressed when Georgacas made assurances that he would steer clear of working on the contract and would not vote at the Met Council on any future Central Corridor issues.

Georgacas stressed that his firm was not hired to advocate for light rail or bus rapid transit—two options being considered for University Avenue—but to help gather public input on options desired by residents in the corridor.

Bell said the decision by Georgacas to give up his vote on Central Corridor issues was a “legitimate but regrettable tradeoff.” A light-rail line in the Central Corridor is now estimated to cost $840 million.

• Haigh and Railroad Authority Member Janice Rettman said they can understand, in retrospect, how some taxpayers might think the Railroad Authority was politically motivated when it awarded the contract to Goff & Howard.

One suspicion could be that the Railroad Authority, which is composed of members of the Ramsey County Board, was trying to curry favor with a Met Council member who votes on transit issues affecting Ramsey County.

Another suspicion could be that the proponents of light rail on the Railroad Authority chose Goff & Howard to neutralize Georgacas, a member of the Met Council’s Transportation Committee, from being able to vote against light rail in the Central Corridor.

“I suppose that is a legitimate concern,” Haigh said.

Georgacas was appointed to the Met Council by Pawlenty in March 2003. He represents the majority of residents in Washington County. In May 2003, he was named First Vice Chair of the council.