Naked City

Minority Contracts Probed

Lino Rivera, director of the city's Small and Minority Business Resources office, has been reassigned pending the outcome of an ongoing investigation into alleged bid-rigging and other contract irregularities, City Manager Toby Futrell announced last week.

The probe has been under way for several months and involves both local and federal agencies. Futrell says she made the investigation public -- via a cryptic Wednesday-evening press advisory that raised far more questions than it answered -- once she learned that investigators were to begin talking to city staffers. "I didn't want rumors to spread," she said. "But of course rumors have spread anyway."

Futrell takes pains to point out that she reassigned Rivera not because the 25-year city veteran is guilty of anything, but to eliminate "any appearance of interference" with the probe, which may still have months to go. While some City Hall sources believe Rivera will be exonerated, a federal search warrant leaked to the media last week alleges that Rivera pressured contractors on behalf of several Hispanic-owned subcontractors. The warrant sought to seize Rivera's correspondence with several vendors, including Materials Products Inc. and Aaron Concrete, and with the Austin-based U.S. Hispanic Contractors Association and its longtime head, Frank Fuentes.

While SMBR does not award contracts directly, it has an important role in deciding who gets city business, and since its inception (long before Rivera took it over), it has been a politically volatile city program. Among the routinely disgruntled have been African-American contractors, who question why the city has not been able to meet the quite modest goals for black participation set forth in the 1997 ordinance and who have before raised suspicions about SMBR's fairness. "They go to lunch [with certain contractors] before the bid, and they go to lunch after the bid, and you don't have to be a rocket scientist to figure this out," says Black Contractors Association President James Harper.

Harper points to Aaron Concrete as an example of at least the appearance of impropriety at SMBR; since August Aaron Concrete, formerly a subcontractor but now a prime contractor on major road and water/wastewater projects, has been recommended by staff for nearly $10 million in city business. According to the federal warrant, it was in connection with Aaron Concrete that discrepancies were first noticed on SMBR-reviewed contracts; the matter was referred to the city manager, who referred the matter to APD, after which the Travis Co. district attorney, the U.S. attorney, and the FBI all became involved. "Nobody -- white, minority, whoever -- understands how this one contractor, out of the clear blue sky, starts winning all the bids," says Harper. Company representatives did not return phone calls seeking comment.

The race angle clearly bothers Futrell, who says, "I've already heard all kinds of allegations and assumptions about this being a black/brown thing, and that isn't the context at all." Echoing this sentiment is another black contractor, former city Planning Commissioner Cloteal Davis Haynes, who says, "I hope that this doesn't turn into a racial war between black contractors and Hispanic contractors. It's about providing access to the under-served and an equal opportunity to participate. These programs are definitely needed to bring them on board. I hope this doesn't become an excuse to bring them down."

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