The scapegoat

Louise Elam sat on the floor next to a copy machine last Thursday morning, trying her best to fish a jammed piece of paper out of a document feeder with a pair of scissors.

Elam, her terra cotta-colored pantsuit rumpled after only two hours at work, jabbed at the copier helplessly, then heaved a frustrated sigh. Immediately, a small group of sympathetic folks gathered around--wanting to comfort, anxious to help.

Someone took the scissors. Someone else asked if she wanted to talk. As Louise Elam gazed up at them, her eyes filled with tears.

There is, after all, nothing worse than being the scapegoat.
"Is Louise taking care of herself?" coworkers whispered furtively to each other around the office, which on this day was brightened only by a lovely flower arrangement from a sympathetic former boss who knew the truth. "Does she have her files?"

Yes, she had her files. And you better believe she was copying the hell out of them.

As a project manager of long tenure in the city of Dallas' Public Works department, 40-year-old Louise Elam not only had her work history meticulously documented, she had the experience and the political scars to know she'd better copy everything before some bully boy from the city manager's office appeared at her desk, demanding that she turn over every shred of proof that she had done nothing wrong.

Because the witchhunt was on. And everybody at City Hall knew it, thanks to an incredibly misleading story in The Dallas Morning News the day before.

The story, which, strangely enough, appeared in only a small number of late-edition papers, was astonishing--not so much for what it said, but for all that it didn't.

The News had served as a mouthpiece for the false accusations of City Manager John Ware and his top lieutenants, who were aggressively playing spin control to cover up their own misconduct and bad management.

"Even before the Dallas City Council had hired consultants to determine the best location for a new sports arena," the News article began, "a city employee had contracted with another architectural firm--without management or council approval.

"The Public Works employee, whom officials declined to identify, hired JPJ Architects to examine the impact of a new facility on the future expansion of the Dallas Convention Center, city officials said."

The $50,000 study was completely "unauthorized," according to a seemingly outraged Assistant City Manager Ted Benavides. Benavides claimed he had found out about the work just two weeks earlier.

Ware was quoted telling the paper that he'd only known about the study for a week, was upset about it--"that never should have been done"--and was contemplating disciplinary action against the unnamed employee. He made the same claims that very day in a closed-door executive session with the Dallas City Council.

In the next day's paper, the employee--Elam--was named.
First Assistant City Manager Cliff Keheley, while admitting that he asked some city employees to do an arena study, specifically accused her of hiring and paying outside consultants without his knowledge--or anyone's approval. Said Keheley, "I'm not willing to take the responsibility of this report being created and laying in the files and coming up at an awkward time."

Well, that's too bad.
Because Keheley is responsible. Along with Benavides.
And, worst of all, so is City Manager John Ware--who, according to one of his own top subordinates, knew about the study every major step of the way.

John Ware could not be reached for further comment on this subject.
But the plain fact of the matter is that the city manager and two of his top deputies have been telling lies.

Without informing the city council, the men at the top of Dallas' 13,000-member city bureaucracy assembled a secret internal task force to study a new arena.

They knew that to complete its work within a 30-day deadline, the group would have to hire--and pay--outside consultants.

And they were determined to do so in a way that would prevent them from ever having to seek city council approval.

In short, Louise Elam did nothing wrong, and--unfortunately for the men in the city manager's office--her files prove it.

John Ware, who is so ardently beloved by the Dallas City Council that he was just awarded a $12,000 raise (to reach a base salary of $150,000) after one year on the job, has always had one big Achilles heel.

He can be one mean sonofabitch.
Ware's trademark style--asking people to do the impossible, in an insanely short period of time, in an atmosphere charged with fear and dread of the onetime Army sergeant and his mouth--has produced Ware's first bona fide scandal.

It is one he utterly deserves.
"I'm real happy that this city council thinks John Ware hung the moon, but they don't work for this man," says one long-time Public Works employee who has watched this sports arena nightmare unfold. "They can look at him and say, 'great, all these things are getting done,' but it's the people under him who are taking the beating to make it work. I'll tell you the truth--people are already so sick of the city manager's office that this is just one more thing. But this one is downright slimy."

This one started to unravel on Friday, November 4, after the Dallas Observer--months after its first request--persuaded city officials that state law requires them to release city files on the arena project. That day, I was led into a conference room at the municipal building in Oak Cliff and given three cardboard boxes filled with arena documents belonging to the Public Works Department.

On the top of one of the boxes was scrawled "ASAP Study"--referring to a matter that, until that moment, only a handful of city employees knew about. It was a secret to the city council, the press, and, of course, the citizens of Dallas.

The bulk of the papers regarding the ASAP Study--the so-called "unauthorized study"--were from the files of Louise Elam.

Elam declined to be interviewed for this story, citing a November 9 memo--issued shortly after the Observer found a draft of the ASAP study--forbidding all city employees from discussing the arena project with the media. No one but the project director, Mike Marcotte, who was pulled out of the water department on July 1 to work on the arena full-time, may talk to the media about the arena, Benavides ordered.

With that memo, anybody who knew anything about the study--in essence, anyone who can help Louise Elam, now formally under investigation for hiring outside consultants without permission--was ordered to remain silent.

But on this issue, those in City Hall who know the truth are sickened by John Ware's attempt to blame Elam. So many people agreed--albeit reluctantly, because they fear retribution--to be interviewed for this story. Others are working hard behind the scenes to call off the witchhunt.

It is a witchhunt that is clearly intended to continue obscuring the truth. Who has City Manager Ware assigned to investigate how Louise Elam supposedly decided on her own to spend $50,000 on arena consultants?

New city controller Eric Kaalund. Before being promoted from a position in the city budget office, Kaalund--now charged with investigating the unauthorized ASAP study--was a member of the city's ASAP task force. Ask Kaalund how well he can investigate a study group on which he served, and he freezes like a deer caught in headlights. "I have no comment," he says. "That's between me and my boss."

And Keheley? How does he justify selecting Kaalund for this particularly sensitive job?

"If he feels uncomfortable, or anyone does, no one's told me that," Keheley declares.

City council members, for the most part, have been docilely accepting of the city manager's version of events. They've been wondering aloud why City Auditor Dan Paul, who normally handles these kinds of thorny matters, wasn't appointed to do the investigation. But with the exception of a comment or two, there's been no outcry, no expression of outrage at how the manager's office--consistent with its entire handling of the arena crusade--has kept critical information from them, not to mention the public.

City employees laugh miserably at the council's passiveness and navete--and their own sorry predicament. "We are just appalled by all this because how are we supposed to work for these people?" asks one public works employee. "If they are going to sacrifice someone of Louise's caliber, they'll sacrifice anybody."

Sentiment in City Hall about Louise Elam is pretty much universal.
"Louise Elam is a first-class city employee," says former Public Works department director Ramon Miguez, now interim director of the city's housing and neighborhood services department.

"Do you know how long I've known Louise Elam?" asks First Assistant City Attorney Charles Bierfeld.

Bierfeld, like Miguez, flatly--and courageously--declares that his bosses are falsely accusing Louise Elam. Both men say they know because they were aware of Elam's actions--and in Bierfeld's case, consulted with the city manager's office about them.

"I've never known her to not follow procedure exactly or not fully inform everybody about what she was doing," Bierfeld says. "She hasn't done anything wrong. And everybody knows that."

Elam is a soft-spoken, hard-working woman with a reputation for unflagging honesty. A registered architect who earned her degree with honors from the University of Texas at Austin, she is so skilled that her superiors appointed her as project manager on three of the city's most important, high-profile construction projects: the $85 million Morton H. Meyerson Symphony Hall, the $89 million Dallas Convention Center expansion, and the $42.7 million J. Erik Jonsson Dallas Central Library.

Elam has been in her job for 15 years. While Ware received a hefty raise this year, Elam, like most other city employees, has received only two small cost-of-living raises in the past nine years. She makes a little more than $44,000.

Despite underwhelming pay and bureaucratic headaches, she has remained on the job through the tenure of five city managers. They rewarded her performance with top assignments--as did John Ware, who named her project manager for the proposed new arena.

But the arena project has turned into a nightmare--and not just for Elam. From the beginning, the imperative has been to hurry up and get this damn thing built, with as little disruption as possible from the council or the tax-paying public.

Unlike Elam's other projects--which involved dozens of town meetings (as in the case of the library), years of study (as in the case of the convention center expansion), and several public votes on bond proposals (as in the case of the Meyerson), the sports arena has been on such a fast track that public--and even council--opinion has often been treated as an afterthought.

The reason: if politics, publicity, or public input were allowed to stall the project--even for a few weeks--there would be no way to meet the self-imposed targeted completion date of fall 1997.

It is because of this schedule that the ASAP study group was formed--and that outside consultants were hired without council approval.

And it is with the explicit approval of the city manager's office--not at Louise Elam's whim--that it was done.

"It made me ill reading those stories," says one senior city official who is intimately involved in the sports arena project and historically tight-lipped about any goings-on at City Hall. "The city manager's office is not telling the truth.

Cliff Keheley was sitting in his spacious office on the fourth floor of City Hall last Thursday evening, squirming noticeably.

Keheley is a City Hall veteran of 19 years. Until he started spinning wild tales last week, he had been widely respected for being straightforward, avoiding bureaucratic games, and generally being a decent human being. Keheley is a quiet, unassuming, nuts-and-bolts guy who has spent the majority of his city years--take note here--in the public works department. He ran the public works department from 1981 to 1989, when he became an assistant city manager. Last year, when Ware was promoted, Keheley won the job of first assistant. In the number-two spot, he became the person most responsible for keeping day-to-day city operations running smoothly.

Keheley knows exactly what it takes for a plodding, cash-strapped bureaucracy that can't even afford to fill potholes to complete--by October 1997--a $200 million sports arena that only materialized as an idea in early 1994.

It takes cutting corners--which is exactly what Keheley, his boss, and Benavides have been doing.

In February, a group of downtown businessmen--headed by real estate agent John Crawford, former chairman of the Greater Dallas Chamber of Commerce--began promoting the idea of a new downtown arena. Called the Dallas Sports and Entertainment Assessment Group, Crawford's bunch tapped the free counsel of city staff, a private architectural firm, a mortgage company, and a management consultant to begin assembling what it would take to convince the Dallas City Council that a new arena was a terrific idea.

On June 15, John Ware briefed the council on the results of the Crawford group's work and urged the council to approve $550,000 to continue the study and pursuit of a new arena by hiring a group of outside firms; when the group was selected, it would include a Dallas construction company called Austin Commercial, Inc. This was the first time, Ware told the council members, that they would be paying for any outside consultants on the arena project.

In truth, the city was already using Austin Commercial to study the arena. The day before the council briefing, the company had billed the city for $1,418.74 for 28 hours of work towards its part of the "unauthorized" ASAP study.

Five days after the council briefing, a second bill--this one for $46,891.43--arrived from JPJ Architects in Dallas. JPJ was also assisting the ASAP study. JPJ would submit a final bill for $1,440.35 in July, bringing the total amount paid to outside consultants for "unauthorized" arena work to $49,750.

It was, to be sure, unauthorized by the Dallas City Council--whose approval is required for all expenditures of more than $10,000.

But it clearly was authorized by the city manager's office.
Last week, Keheley explained to me how he put the ASAP study group together last April. He said he was concerned that Crawford's committee might recommend the wrong downtown site for the arena project--someplace other than the Reunion area, jointly developed by the city and billionaire Ray Hunt.

"I was concerned about the huge investment the city has made in Reunion--parking, freeway ramps, thoroughfares, traffic, circulation--and I was concerned that might not be taken into account in site recommendations coming out of the group," explained Keheley, who was in charge of construction on the original Reunion project. "Secondly, I was concerned that if a site recommendation was made in the vicinity of Reunion that we needed to be fully aware of any impacts that would have on the convention center master plan."

So Keheley put a lot of high-ranking people who were familiar with the Reunion area on his secret arena project: Charles Bierfeld, an assistant city attorney since 1970 and the inhouse legal expert on the many legal agreements with Ray Hunt regarding Reunion; Frank Poe, director of convention and event services, which oversees Reunion Arena and Union Station; Wil Caudell, the manager of Reunion Arena; John Crawford, an employee of the economic development department; Pat Parrish, the new director of budget and research; and her assistant, Eric Kaalund.

The Public Works department would have five people on the project--the director, an assistant director, a division manager, a project manager, anda traffic expert. Keheley also enlisted the help of Wayne Placide, a director of First Southwest Co., the city's outside financial advisors.

Although Keheley says he personally attended two of the group's meetings, he made assistant city manager Ted Benavides his point man for the arena team. "I asked them to specifically give me and/or Ted periodic status reports on progress," Keheley told me.

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.

But Elam was questioning whether it was appropriate to even study the site. "Is it even a consideration to look at Lot 'E' for the arena, considering this is the future location for the DCC expansion?" wrote Elam in an April 26 memo. As project manager for the convention center expansion, she knew as much as anybody about the future needs of the center.

On April 29, Frank Poe and Louise Elam met with JPJ Architects, according to city documents, about doing some major work for the ASAP study. During the meeting, Poe and Elam laid out the group's goals, as Keheley had specifically described them three days earlier.

"We understand that for matters such as market analysis and finance, our role will be one of support only and that our primary charge is to study the feasibility of Lot 'E' and alternative sites in the Convention Center-Reunion Arena vicinity," JPJ architect William Workman wrote in a letter dated May 11. "We propose to provide the services for the 30-day study based on time with a maximum of $65,000. We estimate that reimbursable costs will be under $10,000."

Keheley said last week that at an ASAP meeting he attended in May, staff proposed hiring JPJ at a cost of $65,000. Keheley said he recalls balking at the figure.

"A decision was made to involve outside consultants, and someone refreshed my memory not too long ago that a proposal to use consultants was brought to one of the meetings I attended for use of consultants, and I think the amount of money involved was about $65,000," he said. "And I said 'that is too much money--no, I don't want to do that.'"

ASAP members say they do not remember any such directive from Keheley--and that they don't recall him attending any meetings of the group after April 26.

The ASAP group held its first formal working meeting on May 3. Minutes of that meeting--which were widely distributed--are extensive. Sixteen people attended the meeting, including Frank Poe; Wayne Placide from First Southwest; First Assistant City Attorney Bierfeld; Wil Caudell; three people from budget, including Eric Kaalund, and three people from public works, including Elam.

Also in attendance at the meeting were two representatives from Austin Commercial, Inc. and three from JPJ Architects. During that meeting, every aspect of the work that needed to be done was assigned a responsible party--and ACI and JPJ were knee-deep involved in almost every task.

"Visits will be planned of the following facilities: Portland, Phoenix, Fayetteville," the minutes read. "Visits will include a representative from the following groups: JPJ (1-2 representatives), ACI, PW [public works] and RA [Reunion Arena]. "Wil Caudell will contact the respective facilities to arrange for the visits. JPJ will make travel arrangements for the group."

Further down the page, the minutes read: "Briefing to City Manager's Office is due May 25, 1994. Frank Poe to confirm and see if extension is possible."

In the end, the travel never took place. Neither did the big briefing, although a 24-page briefing packet, dated May 31, which had been prepared for the meeting and which gave a general overview of the study's results, was, in fact, sent to Ted Benavides, according to a distribution list that was tacked onto the document in the files at public works.

Neither took place because, Keheley says, he realized in the middle of May that Crawford's private group had no plans to recommend a specific site--instead it would merely suggest a downtown site and leave it up to the next, paid rash of consultants to pick the best one. With that, Keheley knew that he had time to develop a case for a Reunion site.

"The likelihood the city would become involved in the site selection really, in essence, disbanded the work of the group," Keheley told me.

So Keheley called off the ASAP study. JPJ Architects, which had done more than $48,000 worth of work at that point, dutifully billed the city for its work. It also went ahead and produced a thick draft of its work, dated June 2, for what it was worth to the city.

Elam put the report in her files, where it remained undisturbed--until the Observer found it.

Then a panicky city manager's office--desperate to cover its tracks--distributed the previously secret report to the city council, and offered The Dallas Morning News and the council the story about renegade bureaucrat Louise Elam.

When Elam got the bills from JPJ and ACI last June and July, her records show, she paid them.

But far from acting on her own, she did so only after higher-ranking city officials specifically authorized a peculiar method of payment that circumvented council approval. Elam's files contain faxes dated May 9 to Frank Poe and Charles Bierfeld in which Elam forwarded both men copies of an excerpt from JPJ's five-year-old, $6.7 million contract to design the convention center expansion.

The idea, which Bierfeld acknowledges was openly discussed within the ASAP group, was to pay for the arena study by using funds authorized for use on the convention center. JPJ would get its money from surplus funds in its contract to design the convention center expansion; ACI would be paid through leftover money from its $69-million contract as construction manager for the expansion.

Bierfeld says he advised Elam that the approach was perfectly legal, since the arena study focused partly on determining the impact a new arena would have on the convention center. "I know I specifically talked to Louise on available sources of funding--and possibly quite a few other people," Bierfeld says. "The laundry list of available alternatives for authorizing work was well-known. The whole thing was authorized."

But Keheley and Ware--unlike Bierfeld--aren't about to own up to any of it.
Asked about the legitimacy of using convention center construction money--bond money approved by voters for a specific purpose--to secretly fund an arena study, Keheley seems to recoil. "The contracts were to design and build the convention center expansion, not to do an arena study," Keheley says. "Even if there were money left in those contracts...the money goes back into the fund that it was initially authorized."

It should have--but it didn't.
Just as the council should have been informed about the study and asked to authorize it--but wasn't.

And that's why Dallas city government's most powerful men--Ware, Keheley, and Benavides--have publicly maligned Louise Elam.

They did something they shouldn't have done, and became desperate to cover it up. The arena project manager just happened to be in the way.

Last Friday, clearly spinning from what is happening to her previously happy life, her career, and her reputation, Louise Elam took the day off.

It is 11 a.m. on Monday, November 21, and assistant city manager Ted Benavides--who has not returned almost a dozen phone calls that I have left for him throughout City Hall since 8 a.m.--is walking down the carpeted hallway, toward a fourth-floor meeting with staff.

I ask to speak with him, and a few minutes later, we are sitting in a small conference room. Benavides closes the door.

"Did you write a memo to Ramon Miguez suggesting that consultants be used for the ASAP study?" I ask him.

"Did his office write back to you, confirming that a construction manager and an outside consultant would be hired to perform work on the study?"

"Did you attend an April 19th meeting where it was decided that Austin Commercial should be hired to do some of this work?"

Benavides is soft-spoken, congenial, and happy to talk--a far cry from his usual smug, condescending manner with reporters.

But on this day, Benavides is clearly worried. Unlike last week, when the spin control on the "unauthorized" study and the egregious public works employee was working nicely, it's not working now.

Because there are documents. And because an angry city staff is talking.
Just that morning, councilman Bob Stimson had met with Benavides, as he does each Monday morning. Stimson told Benavides that he was hearing from the city attorney's office that documents exist which clearly link Benavides and Keheley to the "unauthorized" study.

Now, talking to someone who actually had those documents, Benavides must have realized the game was up. The sham was over.

Yes, the assistant city manager told me, he knew that ACI and JPJ were both working for the study group and were both being paid.

And yes, he wasn't the only one that knew it. Cliff Keheley and John Ware had both been fully briefed on the use of paid consultants while the ASAP study was going on. "I tried to keep him informed with what we were doing," Benavides says of Ware, who bears ultimate responsibility for this entire vicious mess. "He was appreciative that we were trying to get enough data to analyze what [Crawford's] sports group was going to present."

Yes, Benavides told me, he and Keheley had discussed using the convention center expansion contract to pay for the JPJ work--since it had exceeded $10,000 and would otherwise require seeking council approval.

And, yes, he and Keheley had asked Bierfeld to determine whether that was legal. "I talked to him [Keheley] about how we were researching the issue of whether we could use the expansion contract," Benavides told me. "He just asked us to go ahead and do the research on it."

Benavides said he also discussed using the convention center contract to pay for the JPJ work with city manager Ware. And what did Ware say about doing that?

"He didn't say yes, and he didn't say no," Benavides shrugged.
Benavides, however, is unwilling to take all the blame for this fiasco. He insists that even though everybody--from Ware right down the line--was aware of what corners were being cut in the interest of expediency, he wasn't the one who eventually pulled the trigger.

Who actually hired JPJ?
"I authorized $10,000 or less," he says, with just a hint of a smile. "And we seem to have spent more than that. And if that's a miscommunication between me and the staff, then that's unfortunate, and I take the responsibility for any miscommunication."

So who is ultimately at fault? I asked Benavides. Louise Elam?
"I think Louise Elam is a wonderful employee," Benavides said. He then added that she was still being "investigated."

"It would be improper for me to comment on what occurred," Benavides said.
By this time, it wasn't necessary. It had become all too clear.


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