Arena stonewalling

Louise and Philip Elam spent the first Valentine's Day of their 10-month-old marriage poring over yet another daily newspaper story that made their hearts sink.

But, friends say, they spent their first Valentine's Day not at a restaurant, nor with wine and flowers--as newly wedded couples like the Elams usually do--but picking over Philip's rosemary chicken with a mutual promise to celebrate the holiday when, and if, the nightmare at Dallas City Hall ever ends.

It has been more than three months now since Louise Elam, a pretty, intensely private 40-year-old woman with a soft heart and a stellar record as an architect for the city of Dallas Public Works department, went from being one of the city's hardest-working, most unassuming employees to its biggest, most highly publicized scapegoat.

It happened on November 16, when, to Elam's shock and horror, City Manager John Ware and his top staff went into a closed-door meeting with the Dallas city council and blamed her--and her alone--for initiating and paying for a secret $50,000 sports arena study that a records request from the Dallas Observer had just unearthed.

Elam and 15 other city employees--none of whom were in the meeting that day--knew better. They knew that their bosses in the city manager's office were the real culprits. And that rather than admit their own impropriety, they had chosen instead to scapegoat someone underneath them.

Only a few council members were smart enough to sense that Ware and two of his top deputies were lying--and only Paul Fielding was gutsy enough to do something about it. Fielding knew that on its face, the city manager's story was preposterous. He knew that a mid-level employee of the Public Works department could never pull off such a stunt on her own--even if she had some bizarre, inexplicable desire to do so.

Fielding immediately called for City Auditor Dan Paul to conduct a formal investigation into the secret study--to find out who really launched it, who authorized it, and who made the decision to keep its existence secret from the city council.

Paul's conclusions, released two weeks ago, were predictable--at least for nine of those employees who had told the true story to the Observer back in November: the number-two person at City Hall, First Assistant City Manager Cliff Keheley, had authorized the secret study, authorized the use of outside paid consultants, and had insisted that staff not tell the council about it.

Sitting at home two weeks ago, holding Paul's audit report, Elam felt some hope. The truth, as she and others knew it, had finally been released in a form that council members and the city manager's office could not ignore.

But Elam's relief was short-lived. Because the following evening, Keheley issued a two-page written statement blasting Paul's findings, defending his own actions, and insisting that he had done absolutely nothing wrong--that he had never authorized the paid study. "I deeply resent the inept and unprofessional assault on my honesty and integrity represented by Mr. Paul's report," Keheley declared in his statement. "Throughout a career dedicated to public service and being fully knowledgeable of the requirements of such a career, I have always accepted responsibility for my actions, including any mistakes."

Not this time.
Unwilling to take responsibility for his actions--as he had privately promised subordinates he would do last November if the secret study ever became public--Keheley chose instead to take the most cowardly route possible: he blamed Elam, the lowest-ranking, most defenseless person on the secret-study team. (Keheley himself declined comment for this story.)

Even after Paul had documented Keheley's true role, daily newspaper and TV reporters, in all too typical superficial fashion, nonetheless accepted Keheley's defense--and his completely baseless criticisms of Paul--at face value. The Morning News printed them on Valentine's morning, along with a priceless comment from Mayor Steve Bartlett, who declared: "I think Cliff's getting a raw deal. It's born in the seamiest sort of politics. I sincerely regret the way it's been handled by some council members and the auditor's report."

Reporters never bothered to pick apart Keheley's lame statement. They never bothered to independently verify the conclusions in Paul's audit. And they virtually ignored the real victim of this mess, Louise Elam. Though the city manager had previously issued a statement acknowledging that she was, in fact, blameless, to this day she has yet to receive a call or letter of apology from Ware, Keheley, or any member of the council. And she still does not know what in the world it's going to take to get the truth out.

"I just feel like it's never going to end," Elam says. "Dan Paul clears me in his audit, and Cliff says it's all false. And by Cliff denying it--denying authorizing the study--doesn't it still cast a suspicion on me? Even though Dan Paul said I didn't do anything wrong, doesn't it make people wonder?  

"I wonder if things will ever be like they were before. I just think there was some damage done. I just sit and wonder."

Cliff Keheley is lying.
And Dan Paul has all the evidence--locked up for safekeeping in his office at 1500 Marilla.

Although Paul declined any public discussion of the details of his work, beyond what is contained in the 48-page report he issued to the city council, city employees he interviewed for his audit can tell you just how strong the evidence is against Keheley.

For one thing, everything in Paul's report, these employees say, was based on documents or the statements of at least two people. Consequently, the report's conclusions are the conservative version of events. Last spring, during the period of the secret study, employees say, Keheley issued many other directives and made many other comments--both in one-on-one conversations and phone calls--that implicate him even further.

Every allegation made against Keheley in Paul's final report--and many other allegations that are not in the report--can be found in written statements that Paul drafted from notes taken during each of his 26 interviews with city employees and consultants. Each interviewee reviewed and signed his statement afterward, attesting to its truthfulness and veracity.

In other words, Paul's report is a lock. It's accurate. It's unassailable. It's exactly what John Ware needed to finally make the decision that he should have made three months ago when Keheley started down this Watergate-like path. (The coverup's become worse than the original offense.)

But, so far, it's not happening. Almost two weeks after he received Paul's report, the city manager has still not decided what to do. "I don't know," Ware said on the phone last Sunday, three days after the self-imposed deadline he had given me for announcing his decision. "I'm still reviewing Paul's report."

By Sunday, Ware had visited with Paul and Keheley to review the report. He'd also met alone with Paul. On Sunday, he thought he might have to meet with Paul a third time. "I told him I might have one or two more questions for him," Ware said. (If he does, they'll have to wait--Dan Paul's wife died unexpectedly and tragically of a heart attack on Saturday, and Paul will be at home in mourning for at least a week.)

As this thing drags on, with Ware mysteriously silent and uncharacteristically indecisive, people caught up in this mess are beginning to believe that the man who screams in their faces and cusses them out at a moment's notice--who rants, raves, fires, demotes, and castigates for the smallest infraction--has no intention of punishing his number-two man.

This has prompted fresh talk in City Hall: that Ware's as deeply in this mess as Keheley--and, if that's the case, with the end of his long career now flashing ignobly before his eyes, Keheley may well have made it clear he's not going down alone.

Last week, Police Chief Ben Click fired a patrol officer for allegedly lying about a relatively minor incident in which the officer jumped out of his squad car to chase a bad guy, allowing his car to roll into a fence.

The officer had not wanted to own up to the mistake, so instead of coming clean, police officials say, he greatly magnified his problems by falsifying a report, saying that someone else must have jumped in his car and driven it into the fence. Confronted later by internal affairs investigators, officials say, he continued the lie--insisting that he had put his car in park before jumping out. Police brass say it was the second time in a year he had been caught in a lie.

Cliff Keheley's lies are much worse than the offense of officer Kevin Odenwald. But clearly, the higher you get up the chain of command in city government, the more likely you are to get away with wrongdoing.

Keheley has lied countless times--to staff, to council members, to reporters, even (as Ware acknowledges) to his boss. Keheley has lied about all manner of things involving this sports arena project.

Let's start here with Ware's version of events. According to the city manager, Keheley last April commissioned an extensive arena site study without ever telling his boss, who was intensely involved at the time in another arena study, commissioned by a business group that former Greater Dallas Chamber of Commerce chairman John Crawford was heading.

Keheley's study involved 16 top city employees. Two of them--assistant city managers Keheley and Ted Benavides--report directly to Ware. But Ware insists that he was completely unaware of the group's activities until Crawford caught wind of the secret study and confronted Ware about it. Recalls Ware: "I said I would check it."  

Ware says he brought Keheley in to talk. "I said, 'Are we having someone do a study?'" Ware told me last week. "He said no."

That was the first lie--one that Ware seems to shrug off today. In truth, there were two consultants working on the secret study. Once Ware discovered that, he told me, he confronted Keheley again. "I said, 'What the hell are you doing this for?'" He then asked Keheley how the consultants were being paid.

"Cliff said he thought he remembered signing an AA," says Ware, referring to a document called an "administrative action," which the staff must fill out--and the manager's office must approve--for any professional services contract of up to $10,000. (The council must approve anything over $10,000.)

But Keheley had signed no such instrument. In fact, no such document even existed because everyone on the staff, including Keheley, knew that much more than $10,000 was being spent--far too much to put in an AA. With that in mind, they had gotten the city attorney's office to authorize using leftover funds from a convention center contract--a move that the council would never detect.

Ware says now that, based on Keheley's memory, he ordered a citywide search for the AA. Employees confirm that they scoured the public works and convention and event services departments looking for the phantom document. It couldn't be found.

When no AA was produced, Ware says he ordered that the study be stopped and that consultants halt their work. According to Ware, he then promptly forgot all about the secret study until November, when several hundred pages of documents pertaining to the secret arena team's work surfaced in city files under review by the Observer.

One of Keheley's great lies appears in his two-page written public statement in response to the city auditor's report. "Mr. Paul contends that I withheld information from the City Council in executive session," Keheley wrote. "My statement was that as of that date I had no information beyond the approved invoices to JPJ Architects signed by an employee of the Public Works Department [Elam]."

The executive session meeting was on November 16. On November 3--two days after this reporter began making copies of secret study documents--Keheley summoned seven members of the secret study team to a late-afternoon meeting with him in a fourth-floor conference room at city hall.

"He wanted to know what was in the files--what documents you were getting," one participant told me. "Then he said, 'Well, who authorized this study?' And we all just sat there and stared at him, saying nothing, because we all knew the answer, but you can't just say to your boss, 'Cliff, don't you remember--you did.'" The employee recalls clearly what Keheley said next: "He said, 'Who are we going to sacrifice for this?' Then he kind of chuckled and said, 'Obviously, no one's going to be sacrificed.'"

Keheley called a second meeting of the group the next afternoon--in the same conference room. This time, several participants say, the group came with every document that had been produced on the secret study--meeting minutes, rosters, memos, faxes, status reports, invoices, the consultants' concluding report. They also came armed with their own appointment books and notes--which they planned to use to refresh Keheley's memory.

"On the second day, he asked us the same question--'Who's responsible for this?'" the participant recalls, offering an account that another attendee later confirmed. "And, finally, people began saying, 'Well, on this date--and according to this day's meeting--you told us to do this and this and this. So the next thing he did was say, 'Well, what about the invoices? Who signed off on these payments?' His entire focus shifted to those two invoices--as opposed to anything else we were showing him."

By the end of that meeting--12 days before the executive session with the city council--it became clear to everyone involved that Keheley was focused on only one thing: the signed invoices with Elam's name on them.

For the next 10 days, Keheley sat on all the documents and all the information his staff had given him before choosing to release one document to the council: the consultants' final report, which happened to be a document that neither Keheley nor Benavides, his point man on the secret study, had seen prior to November because it had come in after Ware had shut down the secret study.

The report was hand-delivered to the council members' homes in sealed envelopes with a cover letter of explanation, drafted by Benavides, putting the best face on the origins of the secret study.  

Two days later, Ware, Keheley, and Benavides met with the city council in executive session. Meanwhile, Ware and Benavides had spoken to the Morning News about their surprise and dismay at uncovering the consultants' report. Ware said he was contemplating punishing the public works employee responsible for the "unauthorized" report.

The conversation between staff and council that day was incredibly cryptic, according to several people who can recite it from memory. "Who commissioned the study? Who paid for it?" Fielding asked the trio. "One person," Keheley responded.

Fielding then asked: "Does this person have a name?" Keheley responded "yes," then fell silent. "Well, do I have to ask you the name?" Fielding said. And Keheley responded: "Yes." Keheley then turned to look at Ware, who responded "Go ahead." And that's when Keheley said "Louise Elam."

Benavides, who knew that Keheley wasn't telling the council the truth, remained quiet throughout the entire conversation.

Five days later, on November 21, armed with documents confirming Benavides' extensive participation in the secret study, I interviewed him in a conference room outside his office. After admitting his own extensive participation in the secret study, Benavides went on to state firmly that both Ware and Keheley were aware of everyone's actions--that he had personally briefed both about the study's progress and about how the consultants would be paid $50,000 out of the convention center expansion contract. "I tried to keep him informed with what we were doing," Benavides told me, referring to Ware. "He was appreciative that we were trying to get enough data to analyze what [Crawford's] sports group was going to present."

Reached by phone later that evening, Ware denied any such briefings by Benavides. "I'm going to call Ted right now," Ware said.

And so he did. And from that moment on, Benavides never again implicated his boss--never said a word about Ware's alleged involvement to Dan Paul. If anyone else from the media bothered to ask him about what the Observer had already published--and it's not clear that anyone did--Benavides wasn't talking.

Last week, Ware told me that he had, indeed, spoken to Benavides that night. "I'll let Ted tell you what was said," Ware told me.

But Benavides, after scampering down a hallway to avoid me, refused to be interviewed about his conversation with Ware. "It's my choice not to talk to you," he said, clearly rattled.

Paul's audit clears Ware. In his report, Paul states: "I have determined that City Manager John Ware was not aware of the confidential 'ASAP' study nor was he aware of the use of consultants to be paid without notification to or approval by the City Council."

But it's not that simple.
Several employees who Paul interviewed say that the auditor must have cleared Ware because no employee was able to tell Paul about any firsthand conversations with Ware regarding the study. They could only speculate about what Ware knew, about what Keheley and Benavides were telling him.

Benavides has apparently changed his tune--remaining mute (or worse) to Paul, about matters he freely discussed with me on November 21. And Keheley denies his own involvement--let alone that of his boss.

Still, plenty of things don't add up.
For one thing, it's hard to believe that two dozen of Ware's top people were working on an arena study that he knew nothing about--especially since, at the time the "secret" work was going on, Ware was the central participant in the business group's study of the same subject.

Asked if he felt betrayed by his top assistant, Keheley, Ware shrugs "At the time it happened, the staff certainly had the authority to do what they did without my approval."

Ask any senior staff member, though, if Ware is content to be out of the loop on any aspect of any city project, and they will laugh at you. "John wants to know everything that's going on," one department head says. "He doesn't really like surprises."

Which is why it's so hard to believe that Ware simply dropped the question of how the secret work was being funded after his search for Keheley's phantom AA turned up nothing last May. "They couldn't find the AA, I stopped the work, and I just forgot about it until this report showed up in November," Ware says.

Even if you believe that Ware was out of the loop until November--and that's believing a lot--it's utterly implausible that by the time Ware, Keheley and Benavides faced off with the city council on November 16, Ware didn't know the truth about the secret study--the same truth that Keheley and Benavides knew but chose not to share with the council.  

"I hadn't looked into it," Ware told me. "Other than the fact that it was done in public works and Louise had authorized payments."

Surely, though, Keheley had briefed his boss on the results of his November 3 and 4 meetings with staff. Right? "I don't remember," Ware says.

But how in the world could Ware be so uninformed--so unprepared to face the council and its questions, with so very much at stake?

"I was in Houston having a treatment somewhere during that time period," Ware told me. He was, of course, referring to the day-long cancer treatments he had been enduring on a regular basis after being diagnosed with the life-threatening disease last summer.

John Ware, who is nothing if not the toughest guy anybody has ever seen when it comes to fighting an impossibly tough disease, is so tough that he never talks about his cancer. He was so concerned last fall lest anyone notice any perceptible change in his work habits that he didn't even tell his own office staff when he was in Houston undergoing chemotherapy.

That Ware would now attribute any misstep to his disease means only one of two things. He's been truly too sick to keep track of the city's business (which no one, not even his top deputies, has previously seen any evidence of). Or, in an unprecedented and desperate move, he's using his illness as an excuse not to reveal the full truth about his own involvement in the secret study and its coverup.

Neither scenario bodes well for the city. And neither scenario is, quite frankly, acceptable for a city this large, with this many pressing needs and problems.

But this city council will never do anything about it. "I don't think any of the council members want to discipline John," Fielding has said repeatedly since November. "'So he lied to us. He kept things from us. But how can we discipline him--he has cancer?' And, of course, we can't discipline anybody else if we don't discipline him."

Don't bet on John Ware firing Cliff Keheley this week. But if Keheley keeps his job, you can bet on the city staff continuing to mislead and withhold and distort and cover up and flat-out lie to the city council.

That's a perversion of the high, squeaky clean ideals of the council-manager form of government. But it's likely what this city's going to get, as long as the members of the council are too gutless to demand anything better--for themselves, or the citizens of Dallas, who they represent.

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