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DART Made a Billion-Dollar Goof

DART chairman Lynn Flint Shaw is not the right person to oversee an audit.

You know all those people you see riding the DART train? It costs you $3.66 every time one of them gets on a train.

Maybe you're like me and believe it's worth it, within limits. Theoretically we'll all be better off if DART can get more people out of cars and onto trains.

But it can't be run like a junk pile. They can't just shovel money out the window.

So now look at what's been going on in the last two months. In early December, DART revealed it had made a goof of a billion dollars in the cost of two suburban lines it is obligated to build. The cost was supposed to be one billion. They said they found out it will be two.

A billion dollars is more than twice their annual operating budget. The total amount they've got up in the air over these two new lines, $1.8 billion, is almost equivalent to their entire net worth.

DART director Gary Thomas said construction costs had gone up unexpectedly, and he got caught by surprise. But at a recent hearing, Dallas City Council member Angela Hunt asked Thomas pointed questions:

"When did DART first discover that there was this difference?" she asked. "Was this in 2007?"

Thomas said, "Yes, ma'am, as I said, it was in the April-May time frame."

"When was the DART board informed?" she asked.

"November 22."

Hunt did quick addition in her head. "So that's eight months," she said. "Why the delay?"

"As I said," Thomas told her, a bit archly, "We wanted to go through the process."

I'm sitting out there thinking, what process? You look down at the bottom of the page, you see that you are in the hole by an amount equivalent to half the net worth of the organization. You need to tell Mom and Dad right away.

Hunt, who has spearheaded the city council's inquiry, continued to press Thomas and eventually got him to admit that the numbers on the two suburban lines had been headed seriously south for at least three years.

I have to offer a sort of caveat here for Thomas. Just about everybody I talk to thinks he's a stand-up guy. At the same time, a number of people with inside knowledge of DART have suggested to me that the longer-tenured, more experienced members of the DART board knew all about this problem long before Thomas "announced" it to them.

I have to throw in one more factor, at the risk of sounding like a typical tin horn-tooting, self-aggrandizing newspaper columnist bozo. I knew about the billion-dollar shortfall a month before DART went public with it.

In fact I was demanding documents all about it under the Texas Public Information Act—and DART was stalling me—when DART went public through the convenient mechanism of a soft and friendly story in The Dallas Morning News, that favorite house organ of all well-connected miscreants in our fair city.

It's just a two-bit theory, but the scenario that makes the most sense to me is Thomas trying to warn them over a three-year period.

Hey. There's nowhere near enough cash in the till to pay for the new railroads you guys are promising your rube constituents.

And the board telling him, Gary, go to Neiman's, buy yourself a nice hat, stuff that story under it.

Here is what we know for sure. In a two-month period since DART did reveal this astounding goof in its construction budget, the staff has come up with a series of wildly off-the-wall and mutually contradictory plans for filling the hole.

First there was the idea of putting off the two suburban lines, since DART doesn't have enough money to build them. The mayors of Irving and Rowlett, where the lines are supposed to go, loaded up buses of angry constituents and came to the DART board to tell them they better not delay those lines.

So the board cried uncle. Immediately. It was like, Oh my God—constituents? Here? Please, make them go away and we'll do whatever you want of us.

Instead, a DART staffer told the board he thought there was a lot of wriggle room in DART's promise to build a second rail line through downtown Dallas. They could put that off, along with a new South Oak Cliff line, and build the suburban lines on time.

Why would DART think it could screw with the city if it couldn't screw with the suburbs? Well, here we come to another difficult but important issue—Dallas Mayor Tom Leppert.

When Leppert took office, you will remember, he wanted to punish council member Angela Hunt for leading the anti-Trinity toll road campaign. He made a big point of not appointing her as chair of the council's Transportation Committee, giving that post instead to council member Linda Koop.

 

Where Hunt tends to be tough, Koop tends to be not so much. I spoke to Koop at the end of last week, and she said she wasn't sure that DART is obligated to build the second line downtown anytime soon.

But I have information on my desk showing that the so-called "trigger" conditions that would obligate DART to start the second line, according to DART's "inter-local agreement" with Dallas, have already taken place. I have DART's own document showing that train traffic trying to get through downtown on the existing Pacific Avenue tracks will be way over the capacity of those tracks by 2010.

After the hearing at which Hunt took Thomas to task, DART announced it was no longer thinking of delaying or borrowing money from Dallas' projects. Instead DART offered a menu of ideas, all of which seem to involve moving its operations and finances farther away from public scrutiny or voter control.

I honestly think many members of the board think their problem is mainly that darned public.

That brings us to another Leppert-related problem. Soon after Leppert took office he and his new best buddy, council member Dwaine Caraway, orchestrated the ousting of former DART board member Joyce Foreman, whom they said was too confrontational. Foreman almost certainly was slated to become DART board chairman, until Leppert and Caraway got her sacked from the board.

Instead the chairman's job went to Leppert ally Lynn Flint Shaw, chairman of "Friends of Tom Leppert," a fund-raising committee. Shaw is part of a tight-knit group of southern Dallas leaders who helped put Leppert in office.

Another of that group is radio personality Willis Johnson, a key consultant on Leppert's southern Dallas campaign. Johnson has sizable contracts with DART as a provider of telephone services and security equipment.

Johnson, Shaw and a small coterie of southern Dallas preachers have been rubbing people in southern Dallas raw ever since Leppert took office by insisting that Johnson, Shaw and the preachers are the official gatekeepers for all conversations between Leppert and anybody in southern Dallas.

Multiple sources have told me that Shaw in particular tells people Willis Johnson is the "go-to person" for anybody black or from the southern sector in Dallas. She has said that no one should usurp Johnson's authority, including elected officials and longtime leaders such as Dallas County Commissioner John Wiley Price and state Senator Royce West.

Willis who?

Leppert, remember, campaigned for southern Dallas support by promising people lots of government contracts.

Shaw, you may know, has been in the news recently over an accusation that she forged the signature of the Dallas County district attorney on a document as part of a scam to defraud a creditor.

I also have raised questions on our blog, Unfair Park, about how she can serve as treasurer of "Friends of Tom Leppert" when the city's ethics code prohibits city appointees from being treasurers of political committees. The city ethics code specifically covers people appointed by the city council to "entities that were not created by the city council," such as DART, which is a semi-autonomous regional agency.

City Attorney Tom Perkins says I'm wrong. He says Friends of Tom Leppert is not a political committee. I note that in its most recent campaign finance statement filed with the city, Friends of Tom Leppert reported it had raised $78,500 in a 12-week period, of which it paid $32,543.67 to Carol Reed, Leppert's political consultant.

Also on Unfair Park last week I raised questions about Shaw's own campaign finance statements for an aborted city council race last year. Her reports show her paying $19,225 to lawyer Michael Sorrell as a campaign consultant. Sorrell told me he had received less than $2,000 from Shaw.

Taken together, I think this is what all of this means. You, the taxpayer, have a huge investment in DART. It costs you lots of money.

In order to protect your interests, somebody needs to stop the wheel. No more brainstorms. No more exciting new ways to pluck the goose.

We need an outside audit of DART. But it won't be easy to set one up that's truly outside. At the end of last week, DART's usual "outside" auditor, Deloitte and Touche, informed DART it had just rescinded some kind of separate contract it had with Shaw, who apparently was providing Deloitte with services of some sort. I am working on getting more detail. But that web already seems a bit tangled. Maybe this needs to be a WAY, WAY outside audit.

At a meeting of the DART board executive committee Tuesday morning, Shaw and top board members worked with DART's top lawyer, Hyattye O. Simmons, to find a way to promise that DART will meet all of its rail-building commitments on time but not have to promise anything specific about where the money will come from.

 

Park Cities board member Raymond Noah balked, saying he thought the board should be open about whether it has enough money to meet its promises. But Noah got nowhere.

Lynn Flint Shaw's big new plan? Promise the moon, schmooze the money. Hey, I could do that. I could promise to build the whole railroad by myself if I didn't have to tell about the money. Sheesh.

And, uh, by the way, this is the businesslike mayor?


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