Report: Mayor’s aide received cut of nonprofit’s contracts with city


Highlights

Complaint against Frank Rodriguez was filed after Statesman story alleged he violated areas of city code.

The city’s Ethics Review Commission will review results of investigation and could issue a sanction.

When the nonprofit founded by a former staffer for Austin Mayor Steve Adler won a contract with the city, the aide received a cut, according to an independent investigation. Documents show the aide was paid $37,110 by the nonprofit over the first two years he worked for Adler.

Frank Rodriguez served as executive director of the nonprofit Latino HealthCare Forum from 2011 until 2015, when he went to work as an aide to Adler. The city began investigating Rodriguez’s ties to the nonprofit in early 2017, two months after the American-Statesman began its own seven-month review. The Statesman found that Latino HealthCare Forum reaped more than $1 million in contracts from programs Rodriguez helped create.

Jason Hadavi, Austin’s deputy city auditor, filed a 723-page ethics complaint against Rodriguez based on the city-requested investigation. The complaint, which alleges Rodriguez violated at least five different areas of city code, will go to the Ethics Review Commission, which has the ability only to issue a sanction.

Investigators with HSSK, an independent group Austin hired to handle the inquiry, obtained Rodriguez’s tax records and payment records from the nonprofit that show Latino HealthCare Forum paid him $37,110 over the first two years he worked for Adler. At least a portion of those payments appear to be a fixed 10 percent of the amounts awarded to Latino HealthCare Forum in contracts.

For example, after the nonprofit received a $25,000 contract involving St. David’s Foundation, it cut a $2,500 check to Rodriguez with “10% St. David’s” written in the memo line. After the city granted $75,000 related to the Restore Rundberg program, Rodriguez received a $7,500 check with the memo line “Rundberg.”

BACKGROUND: Adler aide’s nonprofit benefited from lax oversight on city contracts

Rodriguez said the payments for working on Rundberg and other projects were payments for work he did before he started working in Adler’s office. The later payments were for consulting work he did for Latino HealthCare Forum, but he said he kept that consulting separate from his city work.

His job at the mayor’s office involved helping nonprofits, he said. He disputed the investigation’s findings that he did not disclose payments from Latino HealthCare Forum.

“I feel like everybody knew about it,” he said.

Adler said Thursday he did not know about the payments. The mayor added that he hadn’t read the results of the investigation yet and therefore wouldn’t weigh in on whether the payments were appropriate.

“I didn’t know that he was being paid by them while he was in the office,” Adler said. “I don’t know what he was being paid for. Without learning more, I can’t make an assumption about that.”

Buck Wood, a longtime ethics attorney, told the Statesman last year that Rodriguez’s efforts on behalf of a nonprofit linked to his wife could be a conflict of interest. Wood didn’t know then that Rodriguez was consulting for the nonprofit, too.

“The fact that he got paid is a different ballgame altogether,” Wood said Thursday. “That’s like a state rep. being on the payroll of a company he’s introducing bills for. … It shouldn’t have happened, that’s for darn sure.”

HSSK also found that Rodriguez used his position in Adler’s office to help Latino HealthCare Forum land city contracts over other nonprofits competing for the same funding. Rodriguez sent emails to Adler and others promoting the nonprofit and, in one case, drafted a proposal directly for Latino HealthCare Forum and instructed it to send the proposal to city staffers and the mayor.

Adler said that wasn’t possible.

“No one in my office awards contracts … so he didn’t have a position to influence the awarding of contracts,” the mayor said. “I knew that he was advocating for lots of organizations, for policy, but I don’t recall him doing any policy work in my office tied to any particular organization.”

HSSK investigators disagreed.

“Mr. Rodriguez was actively involved in helping to secure the renewal of existing contracts between the LHCF and the City of Austin, as well as assisting to generate new funding opportunities for the LHCF through the City of Austin,” investigators wrote.

BACKGROUND: Mayor’s aide denies improper ties between nonprofit, City Hall

In a 2015 email to Adler, Rodriguez objected to Austin Public Health telling Latino HealthCare Forum it had to go through a competitive bid process for a contract to help with Affordable Care Act enrollment. Rodriguez said he had an “understanding” with the previous health director that the charity’s previous $200,000 contracted payment to Latino HealthCare Forum would continue for multiple years.

Funding to the Latino HealthCare Forum continued during Rodriguez’s tenure on Adler’s staff, even as Austin Public Health employees discovered the payments to him and raised performance-related concerns about the group’s Affordable Care Act enrollment, the investigation found.

Key emails disappeared from Rodriguez’s city email account ahead of the investigation, HSSK found.

“It appears that Mr. Rodriguez deleted these emails from his City of Austin email account, as well as potentially others after the emails were provided to Statesman pursuant to the PIRs (public information requests) and prior to our information requests associated with our independent investigation,” HSSK wrote.

Rodriguez also used city time and resources for his Latino HealthCare Forum work, the investigation found.

In March of 2017, after the Statesman submitted public information requests related to Rodriguez and the Latino HealthCare Forum, Austin city attorneys prepared a confidential memo about applicable conflict of interest provisions, HSSK said. But it focused primarily on conflict of interest concerns related to Rodriguez’s wife, Linda Smith, Latino HealthCare Forum’s chief administrative officer. It did not appear that the attorneys knew the group had continued paying Rodriguez.

HSSK investigators stated that Rodriguez filed a 2017 conflict disclosure statement “out of an abundance of caution … because a family member receives taxable income from this city vendor,” but he did not disclose his own income the year before from the group.

This story has been updated with comments from Rodriguez and to correct the reference to St. David’s Foundation.



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