By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
The city auditor, who works directly for the city council -- not for the city manager -- is finishing up an investigation into charges of contract rigging in the departments of public works and cultural affairs. In late July, a city architect presented City Manager Ted Benavides with carefully documented evidence to support the charges, and Benavides asked the auditor to investigate.
Now it's time for the auditor to tell the city manager what he found. "The question is whether they'll find a way to sweep it under the rug," says Pat Magill of Magill Architects Inc.
That may not be easy to do: It's a big potato. Senior city officials are accused of nonchalantly corrupting city rules and laws in order to steer tax money toward a favored contractor.
It could all be a lie. The city employees bringing the charges could be making it up.
But people in the architectural profession, the part of the business community closest to this saga, are saying it doesn't sound like a lie to them. In fact, they're saying this story explains a lot -- none of it good.
THE QUIET MAN
Robert Troy is a white-haired man in his early 60s who went to work for the city last January as a senior architect after a long career in private practice and teaching at the college and university level. He is courtly, soft-spoken, careful to stop and listen when others speak. Because of his age and manner, he might strike someone as a man who would hold on to a good job at the end of his career and roll quietly toward retirement.
But barely two months into his new job, Troy says, he found himself hip-deep in the dirtiest deal he'd ever been asked to take part in. It was especially galling, he says, because it involved cheating and deceiving his fellow architects, people who were out there pitching for contracts just as he had done most of his life.
Rather than looking the other way and rolling on down the road as he thinks he was expected to do, Robert Troy got mad.
"I got madder 'n hell," he says, seated behind his gray desk in a gray cubicle in the basement of Dallas City Hall. "I'm not used to having stuff like that take place."
Troy had been hired to serve as project manager for two of the city's most important capital projects, one to plan the future development and management of all of the city's libraries, and the other to do the same for all of the city's cultural facilities.
The library project is moving along smoothly. But Troy says the cultural facilities project didn't smell right from the start.
His job was to head up a carefully drawn committee process to select one architectural and consulting team for a half-million-dollar contract with the city. The contract is for the cultural affairs "masterplan" -- basically a blueprint for what the city should do with its many city-owned museums, theaters, and other cultural facilities. The masterplan would advise the city on which ones to keep, which ones to close, which ones to build, and how to run and use them all effectively.
Every step of the selection process, including the questions to be asked candidate teams, had been worked out in advance according to the contracting and equal opportunity ordinances and laws of the city, state, and nation.
The architects who applied for the masterplan contract say they took the process seriously, some of them investing months of time and thousands of dollars just to apply. But with each day that passed, Troy began to suspect he was the only one on the city's side of the table who thought the process was real.
Meanwhile, halfway across downtown in the city's Office of Cultural Affairs in the Majestic Theatre, another city employee was beginning to pick up the same odor. Jan Adams, like Troy, comes from outside the career culture of City Hall. In middle age she had gone back to SMU to finish a degree in psychology. After a few years in the corporate world, Adams came to Dallas City Hall, where she started as a temp and quickly worked her way up the ladder.
Until a few weeks ago, Adams was administrative assistant to Margie Johnson Reese, director of the Office of Cultural Affairs. Reese had appointed herself and Adams to sit on the selection committee that would decide to whom the city should award the half-million-dollar masterplan contract.
THE PERILS OF PAPER
Adams says that early in the selection process, Reese began telling her to do things that didn't seem right -- all of which seemed to be aimed at cutting off the selection process and steering the contract to Johnson McKibben, a local architectural firm that has served as the minority-owned partner on several major projects, including the new downtown sports arena.
Adams was especially concerned because all of the presentations and all of the interviews she was sitting through on the selection committee had persuaded her that the best firm for the job was the Dallas company of Magill Architects Inc. According to their voting records, everyone else on the five-member committee except Reese felt the same way.
Adams believed she had to vote her conscience no matter what. "I am not a sleaze," she says. "I can't be that way."
When she grew worried and began trying to cover herself by asking for signed directives, Adams says, she discovered that Reese recoiled from paper the way some people fear snakes.
Over an untouched plate of food at an East Dallas restaurant, a still very distraught Adams recalls: "Margie would throw these little hot-tempered tantrums and scream at me, 'You just call them up and tell them I am not going over there to meet with them one more time unless everybody over there agrees to change their vote and do what I want.'
"So I would type it up. I would tell her, 'I have to put these things in writing, because I feel very uncomfortable being put in the middle between two department directors.' But anytime I put anything in writing, she would read it and just turn into a space cadet. 'Oh, no! That's not what I said!'
"She didn't want anything in writing. No paper trail!"
Over the course of two weeks, the Dallas Observer called Reese's office half a dozen times. She did not return phone messages, even though people answering the phone at her agency said she was in the office. Neither did she respond to a faxed letter requesting comment.
On September 16, the Observer hoped to catch her at her own board meeting, but she changed the location of the meeting at the last minute and then, after the Observer discovered the new location, declined to attend.
The Observer did speak with former employees and contractors who have had experience dealing with Reese, some of whom would not speak for the record.
Some arts administrators who have dealt with Reese from a distance, such as Curtis King, director of the Black Academy of Arts and Letters, have favorable things to say about her role in bringing diversity and a sense of mission to the realm of city-funded arts programs. "She has given some sense of direction to the artistic community that was very, very lacking before," King says.
But others who have worked at close quarters with her paint a portrait that resembles what Jan Adams and Robert Troy have to say, especially about her disregard for policies and procedures.
A former employee says, "She would storm in the office and scream, 'I don't appreciate having subordinates tell me I can't do what I want.'"
Reese has been director of the city's Office of Cultural Affairs since 1995, overseeing a $9.5 million budget. Perhaps the most flamboyant tale people tell when they talk about her tenure is the saga of a little agency called Art-Serv. Set up to help small arts outfits sell tickets and advertise events, Art-Serv went belly-up last year, leaving behind major debt, much of it to the struggling arts organizations it was supposed to help.
The National Endowment for the Arts had given the Office of Cultural Affairs a $375,000 grant for the program. Art-Serv, an independent nonprofit agency, was set up to run the program as a subcontractor. Donna Moniot, a former director of Art-Serv, says the agency was originally thrown into financial disarray because Margie Reese cut off large portions of Art-Serv's budget without warning, moving hunks of the grant money into her own agency's budget to administer herself, rather than through a subcontractor. After Moniot left, Art-Serv fell into even worse straits and eventually went bankrupt.
Dozens of small arts organizations were stiffed for money Art-Serv owed them, some for considerable sums. Her voice sharp with anguish more than a year later, Moniot says, "The whole purpose of the NEA grant was to assist small and emerging arts organizations, and not only were they not helped, but some of them were owed thousands of dollars."
Art-Serv operated out of offices provided by Reese at the Majestic. At one point after Moniot had left, her successor called the cops because the agency's checkbooks were missing. The checkbooks were found later in Reese's office, according to a story in The Dallas Morning News.
Jan Adams says she saw Dallas City Auditor Robert Melton and some of his staff at the Majestic soon after the missing-checkbooks story was published in January 1998. But at that point the story dropped -- never to be mentioned again -- from the Morning News, and no public announcement was made of an audit.
Melton confirms he took some of his investigators over to Reese's office last year after the checkbook caper to look into things at the Office of Cultural Affairs. He backed off, he says, when Reese and then-City Manager John Ware assured him they would bring in their own outside auditor to check things out.
Reese wouldn't speak to the Observer to answer whether that audit ever took place. Melton says he has no idea. "That might be a good question to put to them over there," he says.
But there is one big difference between the Robert Troy story and some of the earlier chapters in Reese's career. The earlier events tended to involve people from the art and community-service worlds who may not have been the world's best record-keepers. This story, however, involves a man so methodical about paper that he even sends memos to himself.
MEMO TO FILE
Beginning last February, barely a month into his new job and even before he had cleared his probationary period as a new employee, Troy began keeping a meticulous "memo to file" -- his own record of exactly what happened at each step of the selection process for the cultural affairs masterplan contract. Just beneath the surface of the droning workaday prose in this 14-page document ("February 26 -- Issued RFQ through purchasing") are themes, conflicts, and feeling enough to inspire an opera.
The selection committee was made up of five people -- Troy; his boss, Jay Macaulay; Margie Reese and Jan Adams from cultural affairs; and Elaine Hubbard Moore, of the Office of Minority Business Opportunity, whose inclusion in the committee was required by city ordinance.
Moore did not return repeated phone calls asking for comment. Macaulay confirmed that he had sided with Troy on the choice of Magill as a prime contractor.
On March 19, the committee pared down its original list of 13 applicant firms to five. Johnson McKibben was short-listed in the No. 2 slot, but not as a "prime" contractor. It was there as an "associate" with HOK Inc., meaning HOK was applying to be the contractor and was offering to bring Johnson McKibben in as a kind of tag-along. It's common practice among firms bidding to be prime contractors to bring in smaller minority-owned associate firms to meet diversity requirements.
The Observer reached Michael Johnson of Johnson McKibben by telephone, explained the premise of this story, and asked him for his version. He said, "I have no comment at this time." Johnson did say neither he nor his firm had any business relationship with Reese outside of her role as director of cultural affairs.
Troy's first big bump came on March 24, when David Dybala, director of the Public Works Department and Troy's boss' boss, verbally ordered the committee to add Johnson McKibben to its short list as a prime candidate. Troy did as he was told, but he noted the directive in his memo to file.
The people at HOK Inc. said they hadn't known Johnson McKibben would be coming in to bid against them as a prime candidate, as well as tagging along as an associate, so they dropped the firm from their own bid proposal.
During the next month, Troy spent a lot of time negotiating with Reese over just what questions the committee would ask the six short-listed firms when they came in to be interviewed and to present their detailed proposals. When he and Macaulay went to the Majestic for meetings, Reese often was not available, so they met with her administrative assistant, Jan Adams, instead.
On April 23, immediately after the last interview, the committee voted. When the votes were tallied, the No. 1 firm was Magill Architects Inc. of Dallas. HOK Inc. was No. 2. Johnson McKibben was third.
Troy's memo states that "Margie Reese refused to accept the ranking scores and insisted that her choice of Johnson McKibben/HHPA be accepted as the top team."
In a peculiar racial twist, Troy, who is white, reports in his memo that Reese, who is African-American, said one of her objections to the Magill bid was that it included William Geter, a black architect who is also an ordained minister.
"She told me," the memo states, "'I don't want any black preacher representing cultural affairs in the community.'"
Adams says she heard the remark too. Geter was not available for comment when the Observer called the Magill firm, but Patrick Magill, head of the firm, said, "I have heard about that. I don't know what to say about it. It's one of those remarks that just leaves you speechless."
Under pressure, the selection committee, including Adams and Troy, agreed to elevate Johnson McKibben to the No. 2 slot, knocking out HOK, even though the interview process and vote had put HOK at number two. Troy, meanwhile, got busy doing "due diligence" on the top two firms, calling all of their references.
Magill's references all came back sterling: "Extremely creative, tremendous follow-through, second to none, outstanding, will definitely use them again in the future."
Johnson McKibben's were a decidedly mixed bag. One DISD executive called architect Michael Johnson, head of Johnson McKibben, "tops in his business" and said he "provided excellent staff member to DISD during last Bond Program effort." But an executive at Parkland hospital said things such as "not inspired; things about their design wouldn't work; didn't seem competent; if they don't have proper experience, then be careful."
And the report on the firm Johnson McKibben wanted to bring in as an associate was worse. One of their listed references told Troy they planned to sue that firm.
But none of this was going to dissuade Reese from her determination to give Johnson McKibben the half-million-dollar contract to determine the future of the city's cultural facilities. In the weeks ahead, Reese pushed the committee to change its mind.
KEEP VOTING TILL YOU GET IT RIGHT
When Reese refused to accept the outcome of the selection process, she complained to Troy's superiors. Their reaction was to keep fiddling with the process, trying to find a way to make the vote come out the way Reese wanted it. But nothing seemed to work. At one point, David Dybala told the committee to devise a new weighting formula so that some questions would count more than others. They agreed, and Reese helped design the new system. When the evaluation forms were recalculated, Magill was first, HOK was second, and Johnson McKibben was third.
Troy's memo says, "Margie Reese got very upset and shook papers in the air..."
Elias Sassoon, another public works manager, came up with yet another voting scheme -- this time to cut down the list of questions, start with new ones, and then vote again. It took a month to get Reese to agree to the new questions.
They voted again. Under enormous pressure from her boss, Adams changed her vote so that, of the total of 85 points she awarded to the top two candidates, Johnson McKibben would come out one point ahead of Magill, 43 to 42.
It still wasn't enough to push Johnson McKibben over the top. The committee's ranking came out exactly as it had the first two times, with Johnson McKibben rated last of the three firms.
And it wasn't enough to allow Jan Adams to keep her job.
"She [Reese] calls me into her office at 4:30 p.m.," Adams says, "and she tells me, 'Your services are no longer needed in the Office of Cultural Affairs.' I said, 'Excuse me?' We had already had several meetings that day, and she hadn't said a word. Two months prior, she had given me an excellent performance review.
"I said, 'Just what have I done wrong here?' She said, 'You didn't support me in your vote.' I said, 'Margie, I voted for your team.' She said, 'I know, but all you gave me was one point. One little point! Do you know how ridiculous that made me look in front of David Dybala?'"
Since then, Adams has been assigned around the city to temporary positions below her employment grade. Her status, she says, is now uncertain.
What emerges from between the lines of Robert Troy's elaborate memo to file is an atmosphere inside City Hall of paranoia and two-bit skullduggery, some of which verges on the clownish. There are instances in which his superiors wrote memos to one another but did not sign them, so that the memos later could be destroyed or denied if necessary.
In one instance, Troy wrote a memo to Sassoon, his immediate superior, warning him Johnson McKibben had fared poorly in the due diligence report. Then Troy copied the memo to Dybala. When Sassoon saw his copy of the memo the next morning, he rushed to Troy's office and bawled him out for sending a signed memo to Dybala.
Troy's memo to file reads: "July 9 -- This AM Elias reprimanded me for sending the July 8th memo. He said that by David receiving the copy, it would limit his political options to act if he was told by the City Manager that the choice was to be Johnson McKibben/HHPA."
Sassoon told the Observer, "This is all news to me," but then declined to comment further because the matter is under investigation by the city auditor.
Sassoon is at the center of another tangled scenario in Troy's memo: As the selection process began to drag on much longer than expected, the people at Magill became worried. Early on, they had received hints and signals leading them to believe they had the job in the bag. But when the months rolled by and still no announcement was made, they realized something had gone wrong.
William Geter, Magill's associate, called Sassoon to see whether he could sniff out where things stood. "That's just kind of standard operating procedure for us anyway," Magill says. "Even if we're not selected for a project, we like to call and try to find out what we did wrong. Did we wear a blue tie instead of a red one? Whatever. Win, lose, or draw, we need feedback. His [Geter's] request was if it was possible for us to get documentation of the process. The response was yes."
Magill, who says he was in the room with Geter when he called, described Geter's tone as "cordial and relaxed." Geter, according to Magill, asked Sassoon whether he could look through the file on the selection process later, and Magill says Sassoon agreed that he could.
But Geter, perhaps not knowing how people at City Hall feel about the paper thing, made the mistake later in the day of putting the conversation in a letter and sending it back to Sassoon for confirmation. A few days afterward, Troy walked into Sassoon's office just as Sassoon received Geter's letter.
"Elias was on the telephone talking with William Geter in Magill's office this PM when I returned from the break room," the memo to file states. "He was obviously upset because of a letter Geter had sent to him restating Geter's understanding of his telephone conversation with Elias on July 9."
Geter's letter simply restated what he thought Sassoon had agreed to in their first chat -- that Geter and Magill would be able to see the paperwork on the selection process after it was over.
"Elias kept saying to Geter, 'No, that is not what I said,'" the memo relates. "They hung up, and Elias called Geter a 'son of a bitch.'"
When the Observer described these events to Magill, he laughed. "We were thinking, 'This is no reason to get mad.' It was fairly typical procedure for us. To my knowledge, with a city activity there's always a certain freedom-of-information thing. We were asking in a spirit of cordiality."
Magill and Geter obviously had no idea how many terrible sins they had committed, City Hall-wise. First, they had asked about paper. Then, to make things worse, they had put their question about paper on more paper. Then, turning mishap to disaster, they had sent copies of this paper to higher-ups. And finally, in an act of sheer madness, they had indicated a desire to see all of the paper.
The end of this long, ridiculous process came on July 16, when Dybala announced to Troy, his own employee, and to Adams, Reese's employee, that he had untied the Gordian knot. Dybala told them he was eliminating the vote of the representative of the Office of Minority Business Opportunity (OMBO) because, according to Troy's version of the conversation in his memo, her vote "didn't count that much scoring-wise."
If Troy's account is accurate, it means Dybala violated city ordinances that require the participation of OMBO in contract awards of this size. Scoring-wise, the OMBO representative on the committee had voted consistently each time for Magill.
That turned the vote on the committee into a two-two tie for Magill and Johnson McKibben. And Dybala said he was appointing himself to cast the tie-breaking vote.
"He considered himself the tie-breaker," the memo states, "and he was going with Johnson McKibben/HHPA to satisfy Margie Reese."
At that point, Troy blew the whistle. He assembled the biggest pile of paper anybody in City Hall had seen in years -- the memo to file, the minutes of the meetings, detailed records of the votes, along with copies of all of the ordinances, policies, and directives that had been violated -- and sent them to everybody from the city council to the city manager.
The outcry from the architectural community was immediate, loud, and clear. Several prominent architects, including Bob James, president of the Dallas chapter of the American Institute of Architects (AIA), contacted the city manager and demanded a full investigation.
James says the issues for architects involve both simple honesty and serious business matters. "An architect typically puts a lot of his time, effort, and energy into an application. And then they typically ask you to bring along consultants, and they put their time and energy in too."
James estimates that a bid for a project like this one will cost any short-listed firm many thousands of dollars and weeks of concentrated effort. Obviously, if the process is rigged from the outset, it's all money and time down the tube for the firms who aren't wired. James says architects in Dallas are taking Troy's allegations that this one was wired very seriously.
"I did not know Bob Troy back before this, but I have every reason to believe his letter was responsible," James says.
In response to the outcry from the architects, City Manager Benavides has referred the Troy matter to City Auditor Melton. Melton says his initial report will go to Benavides "sometime soon, possibly this week."
Neither Melton nor Benavides will discuss details of the investigation before the report is issued.
Sources close to Melton's investigation say it has expanded and split into three separate inquiries: one into Troy's charges, a second into the firing of Jan Adams, and a third into the general operations of the Office of Cultural Affairs.
The masterplan contract for cultural affairs is on hold, pending the outcome of Melton's investigation.
Jan Adams is floating around City Hall and the police department in various secretarial jobs. She has interviewed for permanent jobs with the city, but she says that after she tells them what happened with Margie Reese, she never seems to get the call.
"I don't know if I did the right thing," she says. "I still have to earn a living. Maybe at my age I should have just gone along with her and kept my mouth shut."
Robert Troy says his immediate superior, Jay Macaulay, supported him by voting with him throughout the selection process and has never threatened to fire him. At this point, Troy has been informed, he says, by the city auditor that he is covered by the Texas Whistleblower Act and could sue the city if he were fired in connection with the cultural affairs masterplan contract.
He appeared before the September 16 meeting of the Cultural Affairs Commission -- the meeting that kept getting moved and that Reese eventually ducked. He signed up to speak and was given three minutes. He stood at the podium a little shyly and told the members of the commission that he really didn't have any big message.
"I don't know what to say, except to make myself available to you if you have any questions for me," he said.
Staring back at him from a ring of folding tables were many prominent members of the city's arts and cultural community, including commission members Jill Kotvis, Betty Doke, Dan Weiser, Delores Barzune, Clayton Henry, and Judy A. Pollock.
Long silence. Nobody moved.
He said he would be glad to give his card to anyone who might want to contact him later.
Long silence. Nobody wanted his card.
He took his seat. But he must have sensed things weren't going well when he first stepped to the podium. All of the members of the commission were wearing big campaign buttons on their lapels with red hearts and the slogan "We Love Margie!"