Conflict? What conflict?

When D/FW Airport hired the partner of one of its board members, something didn't add up

Earlier this month, the Dallas/Fort Worth Airport Board awarded a $95,000 contract for an outside financial audit of its books and accounts to KPMG Peat Marwick. The accounting firm then subcontracted 25 percent of the work to two minority firms--in keeping with the airport board's goal of trying to spread its financial wealth around to all people, particularly those so-called disadvantaged business owners.

With the full blessing of the airport board and its lawyers, Peat Marwick funneled half the work to Marilou Martinez Stevens, a Fort Worth certified public accountant.

Stevens may be a minority, but whether she is disadvantaged is a matter of opinion. For the last three years, she has owned an accounting firm with Robert Fernandez, who happens to be a member of the D/FW Airport Board.

"She sounds downright advantaged to me," says Suzy Woodford, executive director of Common Cause, a public watchdog group.

To Woodford, the board approval of Stevens' portion of the audit contract appears to be a conflict of interest. But not only didn't the board see it that way, a city of Dallas lawyer assigned to the airport thought it was perfectly kosher.

"Based on the representations made to us, Marilou Stevens has her own CPA firm, and she also has a partnership with Robert Fernandez where they pursue some work jointly," says Gary Keane, general counsel for D/FW Airport. "We were told that the work Marilou Stevens was going to do on the outside airport audit did not involve her partnership with Robert Fernandez. No profit goes to the partnership."

Stevens says she has had a separate accounting firm, called MMS, since 1986, but she just incorporated it last year as a sole proprietorship. (According to the Secretary of State's office, you cannot incorporate a sole proprietorship. There is no record that Stevens' company has incorporated.) "It's gotten so big," she says. Her company specializes in government audits and has worked for the cities of Dallas and Fort Worth, Dallas County, and DART.

In contrast, the partnership with Fernandez concentrates on accounting work for nonprofit corporations and small companies, as well as a few large companies, such as TU Electric and AT&T.

According to biographical information Stevens gave the Fort Worth Hispanic Chamber of Commerce newsletter, Empresario, she founded her own accounting firm in 1991 in Virginia. She moved back to Fort Worth in 1995 and co-founded Fernandez, Stevens and Associates.

It is curious how Stevens' separate company, MMS, has grown so big in three years when there is no listing for it in the phone book. When the Dallas Observer called the offices of Fernandez, Stevens and Associates, the receptionist said that the office housed one company with two main accountants and some part-timers.

Asked if Marilou Stevens has a separate company that works out of this office, the receptionist said: "That depends."

"On what?" we asked.
The receptionist then quickly added that Stevens was trying to open another office.

Stevens insists her company is "totally separate from the one with Robert. I have a long history of doing this. In fact this is one of the smallest audits I've done for a governmental entity."

Stevens says she is getting 10 percent of the $95,000 contract. "The whole thing is $8,000, max," she says. We hate to quibble with an accountant, but 10 percent is actually $9,500.

According to Stevens, she was up-front about her relationship with Fernandez with the board early on. "We disclosed the information," she says, "and Robert abstained from the vote."

That's all well and good--but not good enough, as far as Common Cause is concerned. "Where is the proof that there are two separate companies?" asks Woodford. "But even if, in fact, it is true that the two firms are completely separate, it doesn't make a difference. The contract still enables her to make sure her partnership remains solvent. How do you separate out the funds? Number one: It just begs credulity. And number two: This is one more case of an appearance of corruption.

"We admonish all elected and appointed officials to avoid committing conflicts of interest and the appearance of impropriety," Woodford adds. "It raises questions in the minds of reasonable people and undermines trust in our elected and appointed officials.

 
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