| Schutze |

DART: Conflict? What Conflict?

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One of the more laughable lawyer moments I have witnessed in my too-long reporting career took place yesterday at the meeting of the Dallas Area Rapid Transit Board of Directors. Bottom line? Apparently it’s O.K. for DART board members to scoot around the corner from each other and collect some nice walking-around money from DART contractors any time they feel like it. And it's so easy!

This is according to Hyattye O. Simmons (first named pronounced “HIGH-tee”), DART general counsel, speaking to the DART board’s committee of the whole (please don’t forget the "w" there). Simmons was called upon to give the board a legal opinion on whether or not former DART board chair and Tom Leppert pal Lynn Flint Shaw violated DART’s ethics rules by collecting $20,000 a year from DART’s totally independent and absolutely ethical external auditor, Deloitte & Touche USA LLP.

Deloitte & Touche had been dealing Shaw a little cash on the side through an undisclosed (until things got hot) contract for her services -- something about telling them how to talk black high school kids into becoming accountants. Simmons put this big slide up on the wall showing the international organization chart of Deloitte Touche Tohmatsu -- the point being, I guess, that Shaw’s contract was with a division called Deloitte Services.

Uh, the point, again? Well, DART’s auditing is done by a different division. So, no conflict, no sweat.

Simmons pointed out that Deloitte deliberately sets up its divisions as quasi-independent entities so that the liabilities of one cannot be claimed against the worth of another. I’m sitting out there thinking, “Mr. Simmons, if we were to use the world of terrorism as a metaphor, these quasi-independent units would be what the experts call ‘clean skin cells.’ That’s all about protecting them, not us.”

So Deloitte has invented a way one division can dish out contracts to board members of the entities it audits, but nobody can press a claim or complaint against their auditing entity because a different entity did the contract.

Good for Deloitte! Bad for us!

I don’t think the board really bought this crap, but neither did they complain pointedly. The Dallas Morning News this morning reported it at the bottom of a business-as-usual DART board story, as though the problem had been all cleaned up by Mr. Simmons. Hyattely unlikely!

Think about what the top DART lawyer is telling the board: O.K., guys, we got a big contract award coming up, and it’s between McDonald’s and Subway. An entity called Subway Grease Management wants to offer you, a voting board member, a little side deal not to be mentioned to other board members where they will be giving you $20,000 a year for your services in suggesting ways to encourage high school students to consider grease management as a career. They tell you that Subway Grease Management is set up as a semi-independent subsidiary of Subway Restaurants, Inc.

Grab the money and vote, man! This is DART! Live large!

Meanwhile I’ve been thinking abut how to talk a high school auditorium full of kids – white, black, Latino, whatever -- into becoming accountants. “Kids, first off, stop fidgeting. Next off, go back to the beginning of your freshman year and get a four point. Third off, try to get into the McCombs School of Business at UT, which, I must tell you, is hyattely unlikely! Fourth off, I’d love to take your questions, but I gotta go now.”

I didn’t include Asian kids because somebody already tells them this stuff in the delivery room. ---Jim Schutze

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