The Austin Chronicle

Point Austin: Town Lake 'Chinatown'?

Moriarty lawsuit opens a can of worms on contracting, conflicts, and a good ol' boy network of city contractors

By Michael King, January 27, 2006, News

It's likely we will not get to the bottom of the Moriarty Affair for several months, if not a couple of years. The latter is Bill Moriarty's estimate, as he appears to be settling in for a long legal siege against the city and (as of this writing) three of its biggest names: City Manager Toby Futrell, Deputy City Manager Joe Canales, and Council Member Brewster McCracken. In his pending lawsuit, to which the city has not yet formally responded, the former program manager of the Austin Clean Water Program says he was illegally forced from his position – a consulting contract job with the city's ACWP primary contractor Earth Tech – by a cabal of competing local contractors who pressured the city to find something, anything, to allow the city to get rid of him, and the managers resignedly or eagerly capitulated, insisting Earth Tech dismiss him. Due to Futrell and Canales' interference in his contractual relationship, the lawsuit charges, "Moriarty has sustained actual damages in excess of $1.3 million."

For its part, the city has charged – making its initial public case in the Statesman, a rather clumsy strategic move – that Moriarty fell victim to his own conflict of interest, most specifically the fact that his companion, Diane Hyatt, had received ACWP consultant contracts to design and maintain the sewer reconstruction program's interactive Web site. Moriarty argues that he had nothing to do with negotiating or awarding Hyatt's contract – the city's reps on the contracts do that – and that in any case, that his private relationship with Hyatt began after her contractual relationship with the city. He does acknowledge that he did not inform the city of his personal relationship with Hyatt, but says that isn't required "under any city rules or ethical requirements that I know of."

Futrell says that's not good enough. "Even by his own dates [which the city disputes]," Futrell told me, "Moriarty was in a relationship with Hyatt" while she was in the process of applying for and receiving a city contract "over which he had tremendous influence." Whatever the contractual details, Futrell said, it would appear to the public that "under the program that he manages, he was in a position to influence the hiring of the person that he was living with.

"To me," the city manager continued, "that raises a judgment issue, that raises a conflict of interest issue, and that raises a realm of influence issue. ... These are high-level principles with a whole host of ramifications." Faced with that apparent situation, says Futrell, the city had no choice but to go to Earth Tech and request that it replace Moriarty.

Dark Shadows

Futrell's latest explanation at least has the virtue of abstract simplicity – no literal charges of wrongdoing, just the unseemly appearance of a conflict of interest. The trouble is that polite narrative is just very zenith of the iceberg that is the Moriarty Affair. Futrell herself admits that the city came across the Moriarty/Hyatt relationship only after it was engaged in an extensive "independent" investigation (conducted by outside attorney Connie Cornell) of continuing (but completely distinct) charges that Moriarty was somehow engaged in contractual self-dealing, or bribery, or favoritism, or a whole host of muddy charges thrown at him over several years by some local contractors. Cornell's was at least the third official investigation of Moriarty. Previously, contractors had taken similar charges to APD, and to the Travis Co. District Attorney, where both agencies reviewed and dismissed them as unfounded. (At the third go-round, did anybody at least consider the possibility of slander?)

And despite Futrell's current assurances, in his lawsuit Moriarty says the city's insinuations of criminal wrongdoing have continued. As recently as Monday, City Attorney David Smith bristled when I recalled that the DA had found "absolutely nothing," suggesting darkly that it is his understanding that prosecutors are "still looking into it." Responded Assistant DA Patty Robertson, for the record, "We've reviewed the allegations and we will not be pursuing criminal charges." If that's not good enough for Smith, maybe he should talk to his boss. On Wednesday, Futrell's staff sent me an e-mail pointing again to her initial public statement after she declared the Cornell investigation complete, and pronounced, "First and foremost it did not find any evidence of criminal wrongdoing on the part of the Project Management Firm – Earth Tech, its project manager [Moriarty], and any City Staff."

Moriarty's lawsuit contends, accurately, "if the City had credible evidence that Moriarty had committed a crime, Futrell would be obligated to pursue criminal charges." In other words, put up or shut up. Maybe it's Futrell who should talk to Smith, and give a good yank to his choke-chain.

Much More to Come

As I said, this is only the tip of a very large iceberg, and I'm running out of this week's space. McCracken dragged himself directly into the fight because he stupidly (or craftily) leaked David Smith's summary memo of the Cornell investigation to the Statesman, later defending his action as a service to "the taxpayers." Perhaps on the same grounds, he could inquire why the city is refusing to release the raw fruits of that investigation, the Cornell interviews, paid for by the very same taxpayers (twice – in-house and out-). If Moriarty is to lose his career over that investigation, should he not get a chance to respond to secret, unfiltered allegations, at least some of them from sources known to bear their subject ill will?

On the other hand, McCracken's leak may be understandable, since the Smith memo reads like a clumsy combination of tendentious summation of unknown evidence and press release. Amid dark shadowings of other, entirely unrelated scandals, and conflict-of-interest charges against Moriarty, Smith dragged in another third party over an apparent conflict of interest that turned out, after very small inquiry, to be only that – apparent. (Smith is now trying to extricate the city from that separate snafu without actually admitting to any "mistake.")

For his part, Moriarty has responded, for good and ill, as a man with nothing left to lose. In addition to the literal contract dispute, his lawsuit blasts the city at great length (and sometimes recklessly) for alleged negligence of its sewage infrastructure (for which the ACWP is the supposed remedy), especially on Town Lake. Last week, he began distributing a DVD reiterating his charge that the city's neglect could lead to a health emergency like the one that killed more than 100 people in Milwaukee in 1995 – of which he told me, "If my situation does nothing else than force the city to fix that serious problem, which it ignored and kept hidden for years, then that's fine by me."

Asked if she thought the Moriarty matter might have been handled in a way that didn't produce such an explosion, Futrell said, "It was not our idea to have an explosion. It's being made to be an explosion – but that is not our intent." I don't doubt that the city was hoping that Bill Moriarty would simply fold up his tent quietly and go elsewhere, much to the satisfaction of the local big shots – among them Bruce Todd, David Armbrust, Karen Friese, and others – who'd made it abundantly clear they couldn't abide him. That he isn't doing so is testimony either to his integrity, his stubbornness, his sheer hardheadedness, or some combination of all three. Maybe they should have given him that council hearing he requested, after all. end story

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