Point Austin: Unconventional
Is the Hodge affair the end of an era or the beginning?
That's at least one lesson to be learned from the Robert Hodge story, still very much in progress. Hodge, since 1994 the director of the city's Convention Center Department, was fired a week ago after City Manager Toby Futrell reportedly concluded that he had tampered with official documents, specifically the customer-service surveys that in part determine employee bonus pay in Hodge's department (which also manages the Palmer Events Center). Officially, Hodge was fired for unspecified violations of city policy, but the Statesman's Kate Alexander broke the survey story, and the search warrants for Hodge's office and home confirm that's one thing the District Attorney's Office is now investigating. Because of that now-criminal investigation, more details will be a while in coming; the DA's Office is as usual mum, and the city will wait on the DA's results before taking any additional action, if necessary.
Asked if he thought what has been discovered thus far might be the beginning of a much larger problem, Assistant City Manager Rudy Garza told me Tuesday that the city will "wait until the DA's investigation is completed, but at this time, we have no information that would suggest we should have further concerns, beyond this one person."
Hodge presided over the rapid growth of the Convention Center, which doubled in size and nearly that in use over the last 10 years. According to the city's figures, there were 392,000 center visitors in 1996 and 515,000 last year, in part because of the physical expansion made possible by voter bond support. While much of that growth is no doubt due simply to Austin's physical and economic expansion, Hodge presided over what by all accounts is a very successful operation. Why would he jeopardize that success with what from this distance looks like a fairly penny-ante scam?
At What Price?
What's gotten most of the attention thus far, perhaps because it's the easiest detail to understand, is the apparent altering of those customer-service surveys that conventioneers complete to rate the center on its services. According to Garza, there are three basic components to the "gain-sharing" program available to employees of the Convention Center Department (and also the Aviation Department, i.e., Austin-Bergstrom International Airport), who share financial bonuses if the whole department meets its annual goals. First, there are the surveys themselves, for which an overall "customer satisfaction" goal (e.g., 4.5 on a five-point scale) becomes a benchmark for bonuses based on rank. Secondly, there must be a pool of bonus money available from departmental income in a given year to invoke the program. And finally, annual expenditures must meet or be below budget goals for that year. "We recognize that this is a very competitive industry," said Garza, "and that Austin is competing for a limited number of events and people don't have to choose Austin. The program is a way of creating economic incentives for our employees in that competition."
Unfortunately, the program also creates a potential incentive for cheating on the surveys or the survey calculations, and Hodge stands accused of personally collecting and tampering with the raw surveys, even discarding low scores. Since Hodge's firing, the city has taken steps to remove the survey analysis from the hands of anyone with a financial stake in the outcome; why that wouldn't have been done from the program's inception suggests something about small-town naivete from another place and time. (Hodge allegedly personally scuttled a computerized survey that would have prevented tampering.)
What's more puzzling about the survey matter is why Hodge would take the obvious risk readily spotted by employee whistle-blowers, who alerted the city auditor for what seems like pretty small potatoes, at least in his own case. With his base salary at $152,700, his $9,600 (before tax) 2006 bonus shouldn't have looked all that juicy, although distributing more than $400,000 to employees is quite a departmental gold star yet it isn't even yet confirmed that the alleged tampering was necessary to that year's bonuses.
Visibly more troubling is the money the warrants estimate $600,000 from 2004 to 2006 allegedly shifted from a contract-designated equipment repair and purchasing fund to what may have been unauthorized expenditures on whatever Hodge deemed necessary, although the nature of those expenditures remains vague. The warrants also allege violations of state procurement laws, use of illegal sole-source contracts, "and that some of these contracts had been given to Hodge's friends."
Blowing the Whistle
Beyond Futrell's abrupt dismissal of Hodge, these investigatory charges remain unproven allegations, and it remains to be seen whether the issue will be serious personal enrichment or instead the kind of endemic scratch-my-back culture that is all too familiar from contracting of any kind, public and private. Thus far, the seizure of high-end golf balls from Hodge's home doesn't argue major corruption but the more ordinary kinds that all flesh is heir to, like those folks who blithely walk off with the silverware from convention hotels. It's worth noting that there is a persistent but mostly untraceable buzz about self-dealing in city contracting operations, and this tale will hardly help quench it. But the DA's investigation and the city's eventual response will be telling in what it says about Austin's reputation and institutional culture and whether Hodge's predicament marks the end of a small-town way of doing city business or the beginning of a big-city atmosphere of professionalization, stronger financial checks and balances, and periodic investigations and reform of procedures that for too long have been taken for granted.
In the meantime, four whistle-blowing employees are named in the search warrants as originating the allegations against Hodge, although I won't name them here, because they haven't decided yet if they wish to go fully public. If the legal matters proceed, they will likely have little choice down the line. They are to be commended for going to the city auditor with their suspicions about Convention Center procedures early this year; according to Garza, that's the first moment Hodge's superiors got wind that anything might be wrong in the department. Let's hope that's true, and let's hope that the city recognizes the extraordinary service of workers who at the least certainly risked their jobs to do what's right by Austin.