The scapegoat

A mid-level staffer bears the brunt of a sleazy City Hall coverup

The group's mission was downright daunting.
According to documents the city released from Elam's files, the 10 or so City Hall employees were supposed to do much of what Crawford's private-sector consultants, with help from city staff, were doing in four months: determine the market feasibility and cost of a first-class arena in the Reunion area; develop financing options; find a new use for Reunion Arena and determine its cost; develop the concept of a new arena as part of a sports-entertainment complex involving both arenas and the convention center; produce conceptual drawings; determine economic impact; study parking and traffic considerations; investigate site ownership; and review legal issues regarding Ray Hunt.

Keheley says today he believed that his group of staffers--already burdened with their own work, many of them in new positions, and all smack in the middle of preparing annual budgets--would be able to complete this comprehensive arena study on their own in just 30 days. "If these people didn't feel they had the capability, I assume they would have come to me and said, 'We need some help,'" says Keheley.

In truth, they didn't have to. Contrary to what Keheley says, Elam's documents clearly show that the study group, from its inception, was expected to hire outside consultants.

In a memo dated April 5, 1994, assistant city manager Benavides wrote to Ramon Miguez, then director of Public Works:

"Please provide to me no later than April 8, 1994, your recommendations for the following:

"Development of a study team to analyze renovations to Reunion Arena or new arena facility options. I would like to be sure that the following parties are included in the study group: First Southwest, Convention/ Event Services, Budget/Research, and Economic Development. I realize some outside technical support may be required. However, the use of outside support must be limited to funding of $10,000 or under. Should you have other thoughts on the preceding, let me know."

The significance of the $10,000 limit was lost on no one in the group. The city manager's office could approve any city expenditure of $10,000 or less without the council's knowledge or consent. Any "outside support" over that amount not only needed council approval, but required the solicitation of bid proposals from interested consultants. Following that procedure would require several weeks' time at best--and for this study, there was no time. That's why the group later named itself, with tongue firmly in cheek, the Arena Strategic and Assessment Planning Study--ASAP.

On April 8, an assistant public works director named De McCombs, writing on Miguez's behalf, sent a three-page memo back to Benavides, as instructed. In it, McCombs proposed carving up the study group's workload among various city departments--and outside consultants.

The market study for an arena would be done, in part, by a "consultant or industry group," McCombs wrote. The cost of reusing Reunion Arena would be figured out, among others, by a "construction manager." According to notes written on the memo, it was quickly determined that the construction manager would be Austin Commercial--a firm that city employees know as ACI.

"I am aware that we corresponded back to the manager's office indicating that we were moving forward as instructed," Ramon Miguez told me last week. And moving forward clearly included hiring outside help, said Miguez. "I knew we were hiring outside consultants."

Interestingly enough, Louise Reuben, as she was then known, wasn't even at work while the memos discussing the use of consultants she would later be blamed for hiring were flying between the city manager's office and Public Works. She was taking vacation time because on Saturday, April 9, she married Philip Elam, a salesman for Pitney Bowes who she had been dating for two years. The newly married Elams took a honeymoon in Arkansas the week after their wedding. When they returned, the new Mrs. Elam found herself on the ASAP team.

The ASAP team that Keheley and Benavides had set up.
The end of the April 8 McCombs memo to assistant city manager Benavides reads: "We should conduct a planning meeting with the City representatives next week. At your request, we will schedule a meeting to include you and this group."

At 2:30 p.m. on April 19, that meeting was held in the city manager's fourth-floor conference room, according to one of those in attendance. Benavides was present. "ACI was mentioned at the time," says the attendee. "We had a general consensus that that was the proper way of proceeding to do cost estimating for an arena. We fully expected to enter into a contract with ACI for services--and that it would be under $10,000."

On April 26, Keheley met with several members of the study group. (Louise Elam was not present.) According to informal meeting minutes taken by the acting director of public works, Jill Jordan, who had just replaced Miguez, Keheley informed the group that it had to complete its work by May 25. On that day, he told them, they would brief John Ware on the results of their study.

Elam and her supervisor, Jay Macaulay, were briefed on what had happened at the meeting later that day.

It had been made clear to the group that Keheley was most interested in "Parking Lot E," a large tract of land between the Houston and Jefferson viaducts and the convention center expansion. The city and Ray Hunt each owned about half the land. The ASAP group was being asked to focus on that site for an arena--and doing so would become a task for the outside consultants.

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