Blueman is suffering from a cold, and is chilling out with Bluewoman watching...West Wing Season 4 tonight. Since I am hopped up on cold meds, I'll probably be asleep well before midnight...anyway...
2007 was a great year of blogging. There are so many people to thank for your advice and support over the past year. I appreciate the comments from the readers. Your feedback is always appreciated!
So, what will Blueman work on in 2008? Lots of the same stuff from 2007, but with perhaps more snarkiness.
Winter Soldier 2008.
Elwyn Tinklenberg's taconite connections.
CD 6 endorsement race coverage.
FEC report tracking.
Candidate interviews HD 19A, 19B, 18B and others.
MinnCan pipeline coming near Cokato.
And more...
Thanks for a great 2007 and best wishes to all of you for 2008!
Monday, December 31, 2007
Congressional Bulk Mailings
Dump Bachmann has an interesting post up.
The Grand Forks Herald has the Minnesota connection.
13th out of over 400! Good job Mark!
Now if he could just get his sign down in Buffalo. A year later, after he last used his office in Buffalo, his Congressional sign still stands near the intersection of Hwy 55 and Hwy 25, near the Pizza Hut.
The Grand Forks Herald has the Minnesota connection.
Minnesotan's mail
Ex-U.S. Rep. Mark Kennedy spent $152,000 in taxpayer-funded mailings last year, more than any other House member from Minnesota.
Kennedy, a Republican who lost to Democrat Amy Klobuchar in the 2006 Senate race, was 13th of all House members in mailing expenses. Three other Minnesota House members - Republicans Jim Ramstad and John Kline, and Democrat Jim Oberstar - were also among the top 100.
Some critics call the mailings a waste of taxpayer money, and a way to help incumbents cement their place in Congress by showcasing the members' accomplishments.
Kennedy was out of the country and unavailable for comment, a former campaign spokeswoman said. But the other three House members all defended use of the mailings - also known as franking.
Seventh District Congressman Democrat Collin Peterson spent $9,600 on mailings.
13th out of over 400! Good job Mark!
Now if he could just get his sign down in Buffalo. A year later, after he last used his office in Buffalo, his Congressional sign still stands near the intersection of Hwy 55 and Hwy 25, near the Pizza Hut.
From the Archives V: Inside MnDOT January 21, 2003
Star Tribune (Minneapolis, MN) January 21, 2003, Tuesday, Metro Edition
INSIDE MnDOT; Motivation can be costly at MnDOT; Spending on conferences, travel and entertainment adds up
Dan Browning; Pat Doyle; Staff Writers
The committees that plan the Minnesota Department of Transportation's annual two-day conferences in Bloomington say they handpick keynote speakers to get "experts in topics relevant" to the agency.
But the featured speakers in recent years weren't hired for their knowledge of asphalt or their command of cost-efficient design.
Last year, for instance, the 1,200 or so who attended the conference at the Radisson South Hotel were treated to an hourlong speech titled "The Rise, Fall and Rise of Harley-Davidson." The speaker, a marketing consultant, was paid $10,750.
A speech the next day was titled "Build a Bridge . . ." But it had nothing to do with concrete and steel. Rather, taxpayers spent $14,045 for engineers to spend an hour with a motivational speaker who writes about communication between the sexes.
Speakers at the past five MnDOT conferences have talked about taking risks, adjusting to change, the use of humor at work and similar topics. Their fees, which included expenses, averaged $8,800.
Gov. Tim Pawlenty criticized the expenditures when he learned about them from a reporter. "When you see contracts for speakers on, you know, the rise and fall of Harley-Davidson or whatever some of these other topics are . . . that doesn't really reflect a sense of priorities or focus," he said.
In a prepared statement, MnDOT defended the selection of speakers. It said the conferences include sessions related both to transportation and organizational development.
"The Commissioner's Office sets the criteria," the agency said. "The speaker from Harley Davidson Corporation addressed how his company resurrected itself by turning its attention to the customer," it said, adding that he also has spoken to other states' transportation departments.
The agency said its conferences draw both employees and transportation partners. It rents booths to vendors and charges a fee for attendance, but most of those attending are employees, and the agency pays their fees.
MnDOT has increased its spending on the event by about 61 percent, from $136,173 in 1999 to $219,300 last year, according to records obtained by the Star Tribune under the Minnesota Data Practices Act.
During the past four conventions, MnDOT spent a total of $664,231 more than it recovered from vendors' fees and other income, records show. Keynote speaker contracts for the four years totaled $114,430.
Some examples from the 2001 conference:
- $11,650 for a former ski champion's motivational speech.
- $12,950 for a team-building consultant who talked about ways managers can use fun to revitalize workers.
- $5,000 for a speech on "Intelligent Risk Taking."
MnDOT has canceled its 2003 conference, citing budget constraints.
Despite a tight budget, 34 go to Alaska conference
In addition to its own conferences, MnDOT participates in the annual conference of the American Association of State Highway and Transportation Officials (AASHTO).
The 2002 conference was held in Alaska in October. The agency initially sought permission from the Department of Employee Relations to send 25 people, noting that Minnesota would be host of the conference this year.
Bill Eisele, a division manager in the Employee Relations Department, cautioned MnDOT about sending so many. "I realize the necessity of your [conference] committee chairs going since you will be hosting the conference next year. However, have you considered the negative press if this ever got out?" he wrote in a July e-mail to Bruce Biser, assistant director of management operations.
Citing the limitations of Gov. Jesse Ventura's administration on travel to save costs, Eisele asked Biser whether MnDOT could say that it actually would have sent more if money wasn't so tight.
Biser responded that he had reduced the number of employees who would go in preparation for the Minnesota convention to 20. But he added that MnDOT was planning to send 20 others for general purposes.
Eisele said MnDOT's travel request was the largest that he had encountered. MnDOT officials eventually persuaded the Employee Relations Department to authorize travel for as many as three dozen employees, he said.
MnDOT sent 34 people at a cost of about $100,000, records show.
Doug Weiszhaar, who recently resigned as acting commissioner of MnDOT, defended the size of the MnDOT delegation in a written response to the Star Tribune. He said it was necessary to gather information to ensure a successful conference here this year. He said the event would bring more than $2 million to Minnesota's economy.
However, Pawlenty reacted strongly when told about the trip in a recent interview. "That's just, that's just outrageous," he said.
The size of the Alaska delegation and the expenditures on speakers for MnDOT's own annual conference indicate problems in the department's leadership that need correcting, he said.
Comedians among those hired to speak to staff
MnDOT also hires local speakers throughout the year for much smaller fees. Each year, it gets general approval from the state Department of Administration for these small, routine contracts. Records show that MnDOT budgeted $510,000 for a category labeled "trainers and speakers" over the past three years.
"This category includes short, informal training sessions such as welding and concrete techniques, stress management and supervisory skills," MnDOT told Administration. "Subjects may range from new developments in specialized engineering areas to employee safety to motivational speakers at district annual meetings."
But MnDOT also used those contracts to hire comedians and other entertainers.
For instance, MnDOT paid $200 to Jerome Mayne for a 20-minute comedy routine during an employee meeting in December 2001.
"It was so dry. I mean, light rail, budget and all this," Mayne said about the meeting. "And then here's Jerome coming in, in the middle of the morning, trying to make 'em laugh. It was one of the hardest gigs I've ever done."
Although his contract says he was hired as a motivational speaker, Mayne said his appearance was strictly a stand-up gig. "I think they did that for billing," he said.
MnDOT engineer Michael Martilla signed the contract. At first, he said Mayne had indeed been hired as a motivational speaker. But when told what Mayne had said, Martilla responded: "Well, motivation can be, come in many different forms. And comedy certainly can be motivating also."
MnDOT also paid $1,850 to two popular comedians from Glenwood, Minn., who bill themselves as Tina & Lena. Their contract shows them as the "keynote speakers" for an annual employee outing in Fergus Falls. Annette Hustad (Lena) said the pair was asked to talk about "humor and harmony in the workplace."
The 'Tinklenberg Zone': A staff-produced parody video
On occasion, MnDOT does its own entertaining.
Shortly after Elwyn Tinklenberg, then transportation commissioner, excoriated state House Republicans last year for killing his funding wish list, his staff produced a tongue-in-cheek video promoting their boss. The 9 1/2-minute tape, titled "Tinklenberg Zone," cost at least $2,900 in employee time and expenses. A MnDOT employee played the role of Tinklenberg.
Gary Pettis, a MnDOT communications manager, explained the production this way in a letter to a Star Tribune reporter:
"The main idea behind the video came from the occurrences surrounding Mn/DOT Commissioner Elwyn Tinklenberg, Chief of Staff Margo LaBau, and Federal Affairs Liaison Dan Krom's return trip from Washington D.C. to Minnesota right after September 11th. The group could not return to the Twin Cities via the airlines, as airports and air traffic nationwide were shut down.
"Their only remedy was to find a rental car and drive it back to Minnesota. You can imagine what a somber drive that was. Therefore, the video's objective was to show that it is all right to laugh and to have fun. My department took the concept of the 'many faces of the commissioner' and produced a humorous video."
It was played at a June 26 manager's meeting, nine months after the terrorism attacks.
Lt. Gov. Carol Molnau, whom Pawlenty has named transportation commissioner, said taxpayers shouldn't have to pay for frivolities or services that don't relate to transportation. "I agree with people having a good time," she said. "I just don't know that state tax dollars . . . should pay for it.
"If it's not a benefit to the taxpayers of the state as it relates to MnDOT," Molnau said, "then we probably ought not be doing it."
INSIDE MnDOT; Motivation can be costly at MnDOT; Spending on conferences, travel and entertainment adds up
Dan Browning; Pat Doyle; Staff Writers
The committees that plan the Minnesota Department of Transportation's annual two-day conferences in Bloomington say they handpick keynote speakers to get "experts in topics relevant" to the agency.
But the featured speakers in recent years weren't hired for their knowledge of asphalt or their command of cost-efficient design.
Last year, for instance, the 1,200 or so who attended the conference at the Radisson South Hotel were treated to an hourlong speech titled "The Rise, Fall and Rise of Harley-Davidson." The speaker, a marketing consultant, was paid $10,750.
A speech the next day was titled "Build a Bridge . . ." But it had nothing to do with concrete and steel. Rather, taxpayers spent $14,045 for engineers to spend an hour with a motivational speaker who writes about communication between the sexes.
Speakers at the past five MnDOT conferences have talked about taking risks, adjusting to change, the use of humor at work and similar topics. Their fees, which included expenses, averaged $8,800.
Gov. Tim Pawlenty criticized the expenditures when he learned about them from a reporter. "When you see contracts for speakers on, you know, the rise and fall of Harley-Davidson or whatever some of these other topics are . . . that doesn't really reflect a sense of priorities or focus," he said.
In a prepared statement, MnDOT defended the selection of speakers. It said the conferences include sessions related both to transportation and organizational development.
"The Commissioner's Office sets the criteria," the agency said. "The speaker from Harley Davidson Corporation addressed how his company resurrected itself by turning its attention to the customer," it said, adding that he also has spoken to other states' transportation departments.
The agency said its conferences draw both employees and transportation partners. It rents booths to vendors and charges a fee for attendance, but most of those attending are employees, and the agency pays their fees.
MnDOT has increased its spending on the event by about 61 percent, from $136,173 in 1999 to $219,300 last year, according to records obtained by the Star Tribune under the Minnesota Data Practices Act.
During the past four conventions, MnDOT spent a total of $664,231 more than it recovered from vendors' fees and other income, records show. Keynote speaker contracts for the four years totaled $114,430.
Some examples from the 2001 conference:
- $11,650 for a former ski champion's motivational speech.
- $12,950 for a team-building consultant who talked about ways managers can use fun to revitalize workers.
- $5,000 for a speech on "Intelligent Risk Taking."
MnDOT has canceled its 2003 conference, citing budget constraints.
Despite a tight budget, 34 go to Alaska conference
In addition to its own conferences, MnDOT participates in the annual conference of the American Association of State Highway and Transportation Officials (AASHTO).
The 2002 conference was held in Alaska in October. The agency initially sought permission from the Department of Employee Relations to send 25 people, noting that Minnesota would be host of the conference this year.
Bill Eisele, a division manager in the Employee Relations Department, cautioned MnDOT about sending so many. "I realize the necessity of your [conference] committee chairs going since you will be hosting the conference next year. However, have you considered the negative press if this ever got out?" he wrote in a July e-mail to Bruce Biser, assistant director of management operations.
Citing the limitations of Gov. Jesse Ventura's administration on travel to save costs, Eisele asked Biser whether MnDOT could say that it actually would have sent more if money wasn't so tight.
Biser responded that he had reduced the number of employees who would go in preparation for the Minnesota convention to 20. But he added that MnDOT was planning to send 20 others for general purposes.
Eisele said MnDOT's travel request was the largest that he had encountered. MnDOT officials eventually persuaded the Employee Relations Department to authorize travel for as many as three dozen employees, he said.
MnDOT sent 34 people at a cost of about $100,000, records show.
Doug Weiszhaar, who recently resigned as acting commissioner of MnDOT, defended the size of the MnDOT delegation in a written response to the Star Tribune. He said it was necessary to gather information to ensure a successful conference here this year. He said the event would bring more than $2 million to Minnesota's economy.
However, Pawlenty reacted strongly when told about the trip in a recent interview. "That's just, that's just outrageous," he said.
The size of the Alaska delegation and the expenditures on speakers for MnDOT's own annual conference indicate problems in the department's leadership that need correcting, he said.
Comedians among those hired to speak to staff
MnDOT also hires local speakers throughout the year for much smaller fees. Each year, it gets general approval from the state Department of Administration for these small, routine contracts. Records show that MnDOT budgeted $510,000 for a category labeled "trainers and speakers" over the past three years.
"This category includes short, informal training sessions such as welding and concrete techniques, stress management and supervisory skills," MnDOT told Administration. "Subjects may range from new developments in specialized engineering areas to employee safety to motivational speakers at district annual meetings."
But MnDOT also used those contracts to hire comedians and other entertainers.
For instance, MnDOT paid $200 to Jerome Mayne for a 20-minute comedy routine during an employee meeting in December 2001.
"It was so dry. I mean, light rail, budget and all this," Mayne said about the meeting. "And then here's Jerome coming in, in the middle of the morning, trying to make 'em laugh. It was one of the hardest gigs I've ever done."
Although his contract says he was hired as a motivational speaker, Mayne said his appearance was strictly a stand-up gig. "I think they did that for billing," he said.
MnDOT engineer Michael Martilla signed the contract. At first, he said Mayne had indeed been hired as a motivational speaker. But when told what Mayne had said, Martilla responded: "Well, motivation can be, come in many different forms. And comedy certainly can be motivating also."
MnDOT also paid $1,850 to two popular comedians from Glenwood, Minn., who bill themselves as Tina & Lena. Their contract shows them as the "keynote speakers" for an annual employee outing in Fergus Falls. Annette Hustad (Lena) said the pair was asked to talk about "humor and harmony in the workplace."
The 'Tinklenberg Zone': A staff-produced parody video
On occasion, MnDOT does its own entertaining.
Shortly after Elwyn Tinklenberg, then transportation commissioner, excoriated state House Republicans last year for killing his funding wish list, his staff produced a tongue-in-cheek video promoting their boss. The 9 1/2-minute tape, titled "Tinklenberg Zone," cost at least $2,900 in employee time and expenses. A MnDOT employee played the role of Tinklenberg.
Gary Pettis, a MnDOT communications manager, explained the production this way in a letter to a Star Tribune reporter:
"The main idea behind the video came from the occurrences surrounding Mn/DOT Commissioner Elwyn Tinklenberg, Chief of Staff Margo LaBau, and Federal Affairs Liaison Dan Krom's return trip from Washington D.C. to Minnesota right after September 11th. The group could not return to the Twin Cities via the airlines, as airports and air traffic nationwide were shut down.
"Their only remedy was to find a rental car and drive it back to Minnesota. You can imagine what a somber drive that was. Therefore, the video's objective was to show that it is all right to laugh and to have fun. My department took the concept of the 'many faces of the commissioner' and produced a humorous video."
It was played at a June 26 manager's meeting, nine months after the terrorism attacks.
Lt. Gov. Carol Molnau, whom Pawlenty has named transportation commissioner, said taxpayers shouldn't have to pay for frivolities or services that don't relate to transportation. "I agree with people having a good time," she said. "I just don't know that state tax dollars . . . should pay for it.
"If it's not a benefit to the taxpayers of the state as it relates to MnDOT," Molnau said, "then we probably ought not be doing it."
From the Archives IV: Inside MnDOT January 21, 2003
Star Tribune (Minneapolis, MN) January 21, 2003, Tuesday, Metro Edition
INSIDE MnDOT; MnDOT has worked hard to spin its image; It kept a tight grip on public information and a close eye on its adversaries. One top official suggested deleting records.
Pat Doyle; Dan Browning; Staff Writers
When ethical concerns threatened federal light-rail funding a few years ago, the Minnesota Department of Transportation swung into high gear.
Publicly, the department pledged to correct an apparent conflict of interest involving a $32 million contract.
Behind the scenes, a top MnDOT official contemplated another strategy: a campaign that included shifting blame, criticizing federal authorities and destroying public documents on the matter.
Besides building highways, the department has devoted much effort toward plotting or executing ways to protect itself from critics, shape public opinion on controversial projects and keep some of its activities hidden. E-mail correspondence and other internal documents examined by the Star Tribune offer an inside look.
Shannon Beaudin Klein, until recently MnDOT's public-relations director, said the agency worked hard to provide complete and accurate information to the public. She said that some of the ideas it considered ultimately were rejected as inappropriate.
The light-rail dispute surfaced in 2000, after the Federal Transit Administration said it would not fund the project unless MnDOT sought new bids for a project-management contract. It said that the New York firm Parsons Brinckerhoff Quade & Douglas had been in a position to use inside information to win the job.
In August of that year, a judge refused to block the Transit Administration's decision. Within days, MnDOT Chief of Staff Margo LaBau discussed strategy with Parsons Brinckerhoff.
In a summary of the discussion, David Warner, a Parsons Brinckerhoff executive, wrote that LaBau had wondered whether the company "could somehow cause" a locally prominent person to write a letter to the editor or an opinion article about the decision. The message would be, in effect, that "it's unfortunate that the judge felt compelled to make the decision he did due to the heavy-handed action of a large Federal bureau threatening a local agency with the withdrawal of funding."
Warner added that LaBau hoped Parsons Brinckerhoff would submit a new bid. (It didn't.)
Warner sent LaBau a copy of his summary for her to review. She responded with an e-mail urging caution:
"Dave, Just a few thoughts, anything written down can be discoverable under data privacy act so you might want to delete the part about MnDOT hoping you will participate in a re-bid.
Someone might interpret that as another bizarre basis for 'unfair advantage.' That might be better left for a phone call.
"I would also appreciate it if you would not put in writing about the Opinion Editorial Piece," she wrote, explaining that it could upset the Metropolitan Council, which influences transportation planning in the Twin Cities area. "I am a little out on the limb and MC likes to shake it whenever they are not getting their way."
She added: "I will be deleting your message and the response from my mailbox and my delete file. Nothing like operating with paranoia!"
LaBau's note to Warner was preserved in an agency computer backup.
LaBau, who resigned in October, declined repeated requests for interviews.
Linda Bjornberg, MnDOT's official recordkeeper, said a subordinate who tried to acquire LaBau's e-mails at the request of the Star Tribune last year was upset when she learned that LaBau was routinely deleting them.
"I know people suggest if they don't like something, it should be gotten rid of, they should destroy it," Bjornberg said. "I mean, legally, we can't do that. And I can't in good conscience follow instructions like that."
Warner, in a recent interview, said he didn't know of any instances of a locally prominent person complying with LaBau's request to write a critical opinion piece about the judge's decision. But he said the president of Parsons Brinckerhoff in New York might have prepared an article on the subject about that time.
Agency sought 'research' on Hwy. 55 protesters
The light-rail transit (LRT) project and the related rerouting of Hwy. 55 in south Minneapolis were frequent sources of controversy for MnDOT. And the department tapped a large in-house public-relations team to get its story out.
One of its challenges came from protesters who opposed the rerouting. The project shifted the road closer to Minnehaha Park, requiring the felling of oak trees and causing concern that sites important to American Indians would be disturbed. Dozens of people were arrested in the protests.
Soon after Elwyn Tinklenberg became commissioner in 1999, LaBau brainstormed with Paul Leegard, an acquaintance whom MnDOT later hired, about ways to defuse the protests. He urged her to avoid responses that might give the demonstrators credibility and rally them into a formal organization.
"I would suggest you stop referring to them as a group," he wrote in an August 1999 e-mail.
"Start referring to individuals but not by name but by negative characteristics."
He triggered a quick response.
"Interesting you should say that about the protestors," LaBau replied. "I hired a consultant on Friday to do some 'research' about the protestors and the organizations they represent. I also want to find out who some of the high level environmental and native American people are who would have a vested interest in discrediting this group.
"I know their [sic] out there, I just have to find them!"
A MnDOT memo dated three days later describes a plan to begin "an aggressive public awareness and crisis communication campaign" on the Hwy. 55 project that included initiating a "small contract" with the Bloomington public-relations firm Himle Horner.
MnDOT drafted a $5,000 contract for Himle Horner the next month to "conduct research . . . related to groups interested in the project" and "identify possible third party supporters who might be willing to assume an advocacy role." Under a heading labeled "Background," the agency wrote, "Working with a firm specializing in crisis communication will enhance our ability to minimize distruption [sic] of project and maximize public relations opportunities."
Thomas Horner, a partner in the firm, said in an interview that MnDOT "spoke to us about the challenges they were facing on Hwy. 55. . . . We came in and said . . . your efforts ought to be focused on building an understanding of the value that Hwy. 55 has to the broader community. Don't just make it a [case of] road construction versus opponents of road construction."
MnDOT and Himle Horner say their dealings on Hwy. 55 never went beyond that free advice. "Himle Horner would never be associated with a campaign that has as a goal to discredit others," Horner said. His partner, John Himle, stated: "We never received any contract."
MnDOT documents show that the unsigned contract was abruptly withdrawn after Himle made critical remarks about MnDOT at a public meeting. Judy Melander, then a top public-relations official at the agency, alerted management that Himle's remarks had spurred news coverage that "doesn't read very well for MnDOT and the LRT project."
Within hours, Melander and the supervising engineer for the metro area were discussing whether Himle had a possible conflict of interest because he served on the light-rail management committee and the Metropolitan Airports Commission. In a recent interview, Melander said she hadn't realized that Himle served those roles when she prepared the contract.
Corralling message into 'one voice'
Since fiscal year 2001, the department's public-relations activities have been consolidated in a single office with a budget of about $3 million a year. Before Beaudin Klein left, she was making $50.13 an hour, more than all but a few of MnDOT's top engineers, to direct those efforts.
Some of the $3 million is spent on internal communications and providing information about road closures and similar public-service announcements. Outside of that budget are certain consulting contracts paid through other MnDOT units, such as one for $280,000 with the Minneapolis public-relations firm LaBreche Murray to promote the Northstar bus corridor.
An e-mail that circulated among MnDOT's public-relations employees and others in late 1999, before the consolidation, referred to an "approach to combatting the negative media that the [light-rail] project is receiving."
A few months later, LaBau issued a directive informing subordinates of a policy that put Melander in a commanding role, the beginning of the centralization.
"All inquiries from reporters should be routed through Judy irregardless [sic] of the topic," LaBau wrote. On some of the more sensitive issues, she said, public-relations supervisors might sit in on interviews.
Also about that time, the public-relations department was discussing ways to polish the agency's image. "We are restructuring communications along a public relations/advertising/marketing agency model to better deliver our products and services to our customers throughout the agency and to ensure that we are Speaking With One Voice," wrote Megan Lewis, then a MnDOT employee, who helped develop the plan.
MnDOT staff members spent months discussing whether to change the department logo and other marketing strategies before dropping those plans. And a MnDOT work group identified what it called "natural adversaries" to the agency's use of the Internet to provide transportation information. Those included the Legislature, unspecified state agencies and "some taxpayers who question every state agency expenditure."
Asked about the reference to adversaries before her departure, Beaudin Klein said that MnDOT "considers legislators to be key stakeholders" and that "the tactics in the plan are clearly focused on providing information and making it more easily available" to everyone via the Internet.
Some employees balked at plans for a formal statewide media policy. John Bray, who was a public-affairs director for northeastern Minnesota, tried to explain that knowledgeable employees in his regional offices had been answering questions successfully for the agency for years.
"In other words, we do not have, and would not want to have, a hard and fast rule or bureaucratic maze regarding 'who can talk to the media' and this open forum relationship has well served us for nearly twenty years," he wrote in a memo.
Beaudin Klein responded, calling Bray's comments "unacceptable" and stressing that the new policy was not open to debate.
"This decision was made at the executive level and has the full support of the commissioner," she wrote. "I am seriously disappointed that a communications person is objecting to having a policy in place that will help the agency communicate with one voice."
Bray later wrote Beaudin Klein to pledge his support for the new statewide media policy, which he said mirrored the approach used by his regional office. After a couple of more e-mail exchanges, Mike Robinson, a district engineer, stepped in and said Bray had been misunderstood. "Now, can we kiss and make up?"
More recently, a top public-relations official tried to stop a senior MnDOT engineer, Richard Stehr, from talking publicly about an e-mail he wrote to a subordinate, Tim Henkel.
Henkel had written to Stehr in fall 2001 about concerns that he and his colleagues had regarding Philip Cohen, a lobbyist and former business associate of Tinklenberg's. He noted that Cohen was meeting with the commissioner and feared that he was using his influence to get around the agency's normal procedures and advance improvements to Hwy. 10 in the northwest Twin Cities suburbs.
In an e-mail, Stehr replied that Cohen would "take advantage of his friendship with the Commissioner to secure meetings with the Commissioner to discuss Phil's agenda. We are not going to stop that." He told Henkel "to expect that politics will influence the outcome."
MnDOT declined to make the authors of the e-mail exchange available individually to elaborate on their correspondence. Instead, the agency offered a group interview with a public-relations officer present.
MnDOT spokeswoman Lucy Kender interrupted when a Star Tribune reporter asked Stehr in an interview on another subject whether he cared to comment about the e-mails.
"No, he doesn't," Kender said.
Stehr seemed surprised by the interruption. Kender continued: "Because, Dick, you don't."
Stehr started to respond anyway, and Kender cut him off: "No! Dick, I advise you not to answer that because we've gone around on this several times." She said the agency would reply in writing. Stehr said he didn't mind answering, and Kender finally relented. "I'm the adviser. I can only go that far," she said.
Stehr said that Tinklenberg never asked him to give special consideration to Cohen or anyone else.
In a separate interview, Tinklenberg said: "The proof was in the pudding. . . . [The project] was not changed."
MnDOT was cool to legislators' queries
When it comes to persuasion, MnDOT has been known to play hardball.
Three years ago, MnDOT's Rochester district engineer, Nelrae Succio, met with Dave Bishop, then a Republican state representative from Rochester, to discuss the legislator's hopes for the renovation of Hwy. 52.
Bishop was worried that his opposition to two of Gov. Jesse Ventura's favorite proposals, light rail and a unicameral Legislature, would hurt Hwy. 52's chances, Succio reported in an e-mail to LaBau and MnDOT government-relations director Tim Worke.
"He wanted a guarantee from the Commissioner that Mn/DOT would not allow this to play into our decision-making if funding does become available," Succio wrote.
LaBau responded bluntly. "Bishop needs a Civics lesson, the commissioner reports to the Governor and not the Legislature, he also does not function independantly [sic], he can't guarantee that if Bishop ticks off the Governor that he won't respond by telling El [Tinklenberg] to bury TH 52," she wrote. "Children!"
MnDOT feuded with other legislators, some of whom accused it of withholding public information on light rail.
A memo from MnDOT supervisor Robert Winter to colleagues told of how an aide to Rep. Phil Krinkie, R-Shoreview, was upset because he couldn't get information about the cost of the light-rail project and believed MnDOT was withholding information from legislators.
Krinkie, a leading critic of the Hiawatha light-rail line, had asked MnDOT for information on it under the Minnesota Data Practices Act. The law says that state data are presumed public unless specifically exempt from disclosure and that they must be turned over in a reasonable time after a request.
Krinkie's requests rankled LaBau. "Doesn't this guy have a real job?" she wrote in one e-mail to a colleague.
MnDOT researched statutes in search of justifications for withholding information. As the Legislature debated the merits of light rail, Laurie Steiger, a lawyer in the department, suggested in an e-mail to LaBau that the agency could invoke some provisions of the Data Practices Act to delay release of a preliminary cost-benefit analysis of the project if the analysis somehow could be linked to a new budget proposal.
Steiger also suggested a tactic "to buy time and show a good faith effort" to comply with the Data Practices Act. When someone asked to see the analysis, she wrote, MnDOT could appeal to the Department of Administration for an opinion on whether it was public. (Such opinions generally take one to two months.) Then the agency could also buy time by asking the attorney general for an opinion, she wrote: "Their opinion trumps Administration's opinion."
Steiger also considered more long-shot strategies, such as trying to classify the government information as a trade secret. "This one might be quite a stretch," she conceded.
Asked to comment, Steiger wrote that she has "never encouraged Mn/DOT to suppress public information or delay release" of information "once we know that the classification is clearly public."
Beaudin Klein, who joined MnDOT after the Steiger e-mail, said the agency "responded as promptly in providing information to opponents as [to] supporters."
But MnDOT's new commissioner, Lt. Gov. Carol Molnau, says the agency hasn't been prompt.
"Even though it's public information, it's never been easy to get the full information," said Molnau, who previously was chairwoman of the House Transportation Finance Committee.
When it came to light rail, she said, "we nearly had to subpoena it."
Third of three parts
- Published Sunday: MnDOT has hired consultants in ways that bend and break the rules.
- Published Monday: For years, the department has battled the state government watchdogs who are supposed to hold it accountable.
- Today's report: A behind-the-scenes look at MnDOT's efforts to deal with controversy and unify its message.
ABOUT THIS SERIES
Star Tribune reporters reviewed hundreds of individual constracts and thousands of government documents - including e-mails, memos and other correspondence - provided under the Minnesota Data Practices Act. They also interviewed dozens of public officials, private contractors, lobbyists and others. To comment, contact:
INSIDE MnDOT; MnDOT has worked hard to spin its image; It kept a tight grip on public information and a close eye on its adversaries. One top official suggested deleting records.
Pat Doyle; Dan Browning; Staff Writers
When ethical concerns threatened federal light-rail funding a few years ago, the Minnesota Department of Transportation swung into high gear.
Publicly, the department pledged to correct an apparent conflict of interest involving a $32 million contract.
Behind the scenes, a top MnDOT official contemplated another strategy: a campaign that included shifting blame, criticizing federal authorities and destroying public documents on the matter.
Besides building highways, the department has devoted much effort toward plotting or executing ways to protect itself from critics, shape public opinion on controversial projects and keep some of its activities hidden. E-mail correspondence and other internal documents examined by the Star Tribune offer an inside look.
Shannon Beaudin Klein, until recently MnDOT's public-relations director, said the agency worked hard to provide complete and accurate information to the public. She said that some of the ideas it considered ultimately were rejected as inappropriate.
The light-rail dispute surfaced in 2000, after the Federal Transit Administration said it would not fund the project unless MnDOT sought new bids for a project-management contract. It said that the New York firm Parsons Brinckerhoff Quade & Douglas had been in a position to use inside information to win the job.
In August of that year, a judge refused to block the Transit Administration's decision. Within days, MnDOT Chief of Staff Margo LaBau discussed strategy with Parsons Brinckerhoff.
In a summary of the discussion, David Warner, a Parsons Brinckerhoff executive, wrote that LaBau had wondered whether the company "could somehow cause" a locally prominent person to write a letter to the editor or an opinion article about the decision. The message would be, in effect, that "it's unfortunate that the judge felt compelled to make the decision he did due to the heavy-handed action of a large Federal bureau threatening a local agency with the withdrawal of funding."
Warner added that LaBau hoped Parsons Brinckerhoff would submit a new bid. (It didn't.)
Warner sent LaBau a copy of his summary for her to review. She responded with an e-mail urging caution:
"Dave, Just a few thoughts, anything written down can be discoverable under data privacy act so you might want to delete the part about MnDOT hoping you will participate in a re-bid.
Someone might interpret that as another bizarre basis for 'unfair advantage.' That might be better left for a phone call.
"I would also appreciate it if you would not put in writing about the Opinion Editorial Piece," she wrote, explaining that it could upset the Metropolitan Council, which influences transportation planning in the Twin Cities area. "I am a little out on the limb and MC likes to shake it whenever they are not getting their way."
She added: "I will be deleting your message and the response from my mailbox and my delete file. Nothing like operating with paranoia!"
LaBau's note to Warner was preserved in an agency computer backup.
LaBau, who resigned in October, declined repeated requests for interviews.
Linda Bjornberg, MnDOT's official recordkeeper, said a subordinate who tried to acquire LaBau's e-mails at the request of the Star Tribune last year was upset when she learned that LaBau was routinely deleting them.
"I know people suggest if they don't like something, it should be gotten rid of, they should destroy it," Bjornberg said. "I mean, legally, we can't do that. And I can't in good conscience follow instructions like that."
Warner, in a recent interview, said he didn't know of any instances of a locally prominent person complying with LaBau's request to write a critical opinion piece about the judge's decision. But he said the president of Parsons Brinckerhoff in New York might have prepared an article on the subject about that time.
Agency sought 'research' on Hwy. 55 protesters
The light-rail transit (LRT) project and the related rerouting of Hwy. 55 in south Minneapolis were frequent sources of controversy for MnDOT. And the department tapped a large in-house public-relations team to get its story out.
One of its challenges came from protesters who opposed the rerouting. The project shifted the road closer to Minnehaha Park, requiring the felling of oak trees and causing concern that sites important to American Indians would be disturbed. Dozens of people were arrested in the protests.
Soon after Elwyn Tinklenberg became commissioner in 1999, LaBau brainstormed with Paul Leegard, an acquaintance whom MnDOT later hired, about ways to defuse the protests. He urged her to avoid responses that might give the demonstrators credibility and rally them into a formal organization.
"I would suggest you stop referring to them as a group," he wrote in an August 1999 e-mail.
"Start referring to individuals but not by name but by negative characteristics."
He triggered a quick response.
"Interesting you should say that about the protestors," LaBau replied. "I hired a consultant on Friday to do some 'research' about the protestors and the organizations they represent. I also want to find out who some of the high level environmental and native American people are who would have a vested interest in discrediting this group.
"I know their [sic] out there, I just have to find them!"
A MnDOT memo dated three days later describes a plan to begin "an aggressive public awareness and crisis communication campaign" on the Hwy. 55 project that included initiating a "small contract" with the Bloomington public-relations firm Himle Horner.
MnDOT drafted a $5,000 contract for Himle Horner the next month to "conduct research . . . related to groups interested in the project" and "identify possible third party supporters who might be willing to assume an advocacy role." Under a heading labeled "Background," the agency wrote, "Working with a firm specializing in crisis communication will enhance our ability to minimize distruption [sic] of project and maximize public relations opportunities."
Thomas Horner, a partner in the firm, said in an interview that MnDOT "spoke to us about the challenges they were facing on Hwy. 55. . . . We came in and said . . . your efforts ought to be focused on building an understanding of the value that Hwy. 55 has to the broader community. Don't just make it a [case of] road construction versus opponents of road construction."
MnDOT and Himle Horner say their dealings on Hwy. 55 never went beyond that free advice. "Himle Horner would never be associated with a campaign that has as a goal to discredit others," Horner said. His partner, John Himle, stated: "We never received any contract."
MnDOT documents show that the unsigned contract was abruptly withdrawn after Himle made critical remarks about MnDOT at a public meeting. Judy Melander, then a top public-relations official at the agency, alerted management that Himle's remarks had spurred news coverage that "doesn't read very well for MnDOT and the LRT project."
Within hours, Melander and the supervising engineer for the metro area were discussing whether Himle had a possible conflict of interest because he served on the light-rail management committee and the Metropolitan Airports Commission. In a recent interview, Melander said she hadn't realized that Himle served those roles when she prepared the contract.
Corralling message into 'one voice'
Since fiscal year 2001, the department's public-relations activities have been consolidated in a single office with a budget of about $3 million a year. Before Beaudin Klein left, she was making $50.13 an hour, more than all but a few of MnDOT's top engineers, to direct those efforts.
Some of the $3 million is spent on internal communications and providing information about road closures and similar public-service announcements. Outside of that budget are certain consulting contracts paid through other MnDOT units, such as one for $280,000 with the Minneapolis public-relations firm LaBreche Murray to promote the Northstar bus corridor.
An e-mail that circulated among MnDOT's public-relations employees and others in late 1999, before the consolidation, referred to an "approach to combatting the negative media that the [light-rail] project is receiving."
A few months later, LaBau issued a directive informing subordinates of a policy that put Melander in a commanding role, the beginning of the centralization.
"All inquiries from reporters should be routed through Judy irregardless [sic] of the topic," LaBau wrote. On some of the more sensitive issues, she said, public-relations supervisors might sit in on interviews.
Also about that time, the public-relations department was discussing ways to polish the agency's image. "We are restructuring communications along a public relations/advertising/marketing agency model to better deliver our products and services to our customers throughout the agency and to ensure that we are Speaking With One Voice," wrote Megan Lewis, then a MnDOT employee, who helped develop the plan.
MnDOT staff members spent months discussing whether to change the department logo and other marketing strategies before dropping those plans. And a MnDOT work group identified what it called "natural adversaries" to the agency's use of the Internet to provide transportation information. Those included the Legislature, unspecified state agencies and "some taxpayers who question every state agency expenditure."
Asked about the reference to adversaries before her departure, Beaudin Klein said that MnDOT "considers legislators to be key stakeholders" and that "the tactics in the plan are clearly focused on providing information and making it more easily available" to everyone via the Internet.
Some employees balked at plans for a formal statewide media policy. John Bray, who was a public-affairs director for northeastern Minnesota, tried to explain that knowledgeable employees in his regional offices had been answering questions successfully for the agency for years.
"In other words, we do not have, and would not want to have, a hard and fast rule or bureaucratic maze regarding 'who can talk to the media' and this open forum relationship has well served us for nearly twenty years," he wrote in a memo.
Beaudin Klein responded, calling Bray's comments "unacceptable" and stressing that the new policy was not open to debate.
"This decision was made at the executive level and has the full support of the commissioner," she wrote. "I am seriously disappointed that a communications person is objecting to having a policy in place that will help the agency communicate with one voice."
Bray later wrote Beaudin Klein to pledge his support for the new statewide media policy, which he said mirrored the approach used by his regional office. After a couple of more e-mail exchanges, Mike Robinson, a district engineer, stepped in and said Bray had been misunderstood. "Now, can we kiss and make up?"
More recently, a top public-relations official tried to stop a senior MnDOT engineer, Richard Stehr, from talking publicly about an e-mail he wrote to a subordinate, Tim Henkel.
Henkel had written to Stehr in fall 2001 about concerns that he and his colleagues had regarding Philip Cohen, a lobbyist and former business associate of Tinklenberg's. He noted that Cohen was meeting with the commissioner and feared that he was using his influence to get around the agency's normal procedures and advance improvements to Hwy. 10 in the northwest Twin Cities suburbs.
In an e-mail, Stehr replied that Cohen would "take advantage of his friendship with the Commissioner to secure meetings with the Commissioner to discuss Phil's agenda. We are not going to stop that." He told Henkel "to expect that politics will influence the outcome."
MnDOT declined to make the authors of the e-mail exchange available individually to elaborate on their correspondence. Instead, the agency offered a group interview with a public-relations officer present.
MnDOT spokeswoman Lucy Kender interrupted when a Star Tribune reporter asked Stehr in an interview on another subject whether he cared to comment about the e-mails.
"No, he doesn't," Kender said.
Stehr seemed surprised by the interruption. Kender continued: "Because, Dick, you don't."
Stehr started to respond anyway, and Kender cut him off: "No! Dick, I advise you not to answer that because we've gone around on this several times." She said the agency would reply in writing. Stehr said he didn't mind answering, and Kender finally relented. "I'm the adviser. I can only go that far," she said.
Stehr said that Tinklenberg never asked him to give special consideration to Cohen or anyone else.
In a separate interview, Tinklenberg said: "The proof was in the pudding. . . . [The project] was not changed."
MnDOT was cool to legislators' queries
When it comes to persuasion, MnDOT has been known to play hardball.
Three years ago, MnDOT's Rochester district engineer, Nelrae Succio, met with Dave Bishop, then a Republican state representative from Rochester, to discuss the legislator's hopes for the renovation of Hwy. 52.
Bishop was worried that his opposition to two of Gov. Jesse Ventura's favorite proposals, light rail and a unicameral Legislature, would hurt Hwy. 52's chances, Succio reported in an e-mail to LaBau and MnDOT government-relations director Tim Worke.
"He wanted a guarantee from the Commissioner that Mn/DOT would not allow this to play into our decision-making if funding does become available," Succio wrote.
LaBau responded bluntly. "Bishop needs a Civics lesson, the commissioner reports to the Governor and not the Legislature, he also does not function independantly [sic], he can't guarantee that if Bishop ticks off the Governor that he won't respond by telling El [Tinklenberg] to bury TH 52," she wrote. "Children!"
MnDOT feuded with other legislators, some of whom accused it of withholding public information on light rail.
A memo from MnDOT supervisor Robert Winter to colleagues told of how an aide to Rep. Phil Krinkie, R-Shoreview, was upset because he couldn't get information about the cost of the light-rail project and believed MnDOT was withholding information from legislators.
Krinkie, a leading critic of the Hiawatha light-rail line, had asked MnDOT for information on it under the Minnesota Data Practices Act. The law says that state data are presumed public unless specifically exempt from disclosure and that they must be turned over in a reasonable time after a request.
Krinkie's requests rankled LaBau. "Doesn't this guy have a real job?" she wrote in one e-mail to a colleague.
MnDOT researched statutes in search of justifications for withholding information. As the Legislature debated the merits of light rail, Laurie Steiger, a lawyer in the department, suggested in an e-mail to LaBau that the agency could invoke some provisions of the Data Practices Act to delay release of a preliminary cost-benefit analysis of the project if the analysis somehow could be linked to a new budget proposal.
Steiger also suggested a tactic "to buy time and show a good faith effort" to comply with the Data Practices Act. When someone asked to see the analysis, she wrote, MnDOT could appeal to the Department of Administration for an opinion on whether it was public. (Such opinions generally take one to two months.) Then the agency could also buy time by asking the attorney general for an opinion, she wrote: "Their opinion trumps Administration's opinion."
Steiger also considered more long-shot strategies, such as trying to classify the government information as a trade secret. "This one might be quite a stretch," she conceded.
Asked to comment, Steiger wrote that she has "never encouraged Mn/DOT to suppress public information or delay release" of information "once we know that the classification is clearly public."
Beaudin Klein, who joined MnDOT after the Steiger e-mail, said the agency "responded as promptly in providing information to opponents as [to] supporters."
But MnDOT's new commissioner, Lt. Gov. Carol Molnau, says the agency hasn't been prompt.
"Even though it's public information, it's never been easy to get the full information," said Molnau, who previously was chairwoman of the House Transportation Finance Committee.
When it came to light rail, she said, "we nearly had to subpoena it."
Third of three parts
- Published Sunday: MnDOT has hired consultants in ways that bend and break the rules.
- Published Monday: For years, the department has battled the state government watchdogs who are supposed to hold it accountable.
- Today's report: A behind-the-scenes look at MnDOT's efforts to deal with controversy and unify its message.
ABOUT THIS SERIES
Star Tribune reporters reviewed hundreds of individual constracts and thousands of government documents - including e-mails, memos and other correspondence - provided under the Minnesota Data Practices Act. They also interviewed dozens of public officials, private contractors, lobbyists and others. To comment, contact:
Sunday, December 30, 2007
Top 7 story lines in 2007
So much to sort through and consider. In coming up with the order of importance, we weighed the amount of traffic and the number of stories that were cross posted or linked elsewhere.
Lots of great stories were left off the final list. Some of them include the per diem follies of Randy Demmer and our other fiscal conservatives, school levies passing in Dassel Cokato and Glencoe Silver Lake, the statewide smoking ban, and other legislative endeavors.
Mark Olson was even spared from the Top 7, but to be fair, we could just do a Top 7 for him alone!
Beyond becoming engaged to Bluewoman in Washington DC, with a 11/8/08 wedding date, here are the Top 7 Blueman story lines for 2007. I'm looking forward to a stronger 8 in 08!
3. Michele Bachmann. Dump Bachmann will do this more justice, but just off hand...
Groping the President, votes against working and middle class Minnesotan's, her Iran quotes, and a slew of other stories.
2. Luke Hellier and the MnSCU Board of Trustee's. I drew the ire of righty bloggers and radio talk show hosts for this one, and we were dead on. The issue is still closely followed by the statewide student associations. MSUSA, the 4 year student association, is anxiously awaiting their replacement to the MnSCU Board, a mere 6 months late now. It's much worse for MSCSA, the 2 year student association. Their student representative has served 18 months past the end of her initial appointment, without replacement.
Meanwhile, Governor Pawlenty spends his time pimping John McCain.
1. Walter Reed Scandal / Veterans Suicide. Support Our Troops, Liberate Iraq was the slogan on the lawnsign. Too bad it never carried over to when our brave men and women came home.
Being treated in despicable conditions at Walter Reed and other military and VA hospitals across the US, it took a Washington Post story to break this scandal wide open. Miles from the concrete palace our President resides in, our soldiers and Veterans were second class citizens.
Suicide rates of veterans also rose and remain more than double of "normal" society. Minnesota has lost no less than 16 Iraq or Afghanistan Veterans under the age of 30, since 2005.
It's a story that should be number 1 in more places than just Blueman and will remain a focal point of my blog.
Lots of great stories were left off the final list. Some of them include the per diem follies of Randy Demmer and our other fiscal conservatives, school levies passing in Dassel Cokato and Glencoe Silver Lake, the statewide smoking ban, and other legislative endeavors.
Mark Olson was even spared from the Top 7, but to be fair, we could just do a Top 7 for him alone!
Beyond becoming engaged to Bluewoman in Washington DC, with a 11/8/08 wedding date, here are the Top 7 Blueman story lines for 2007. I'm looking forward to a stronger 8 in 08!
7. Urdahl and Shimanski Townhall Forum. For someone who paints himself as a "moderate" one would have to ask why they hang out with such extreme company.
While the forum itself, billed as a townhall forum and appeared to be a rally, was interesting, the festivities afterwards were even better.
Toe to toe with Dean Urdahl was an awful lot of fun, interesting too. We discussed Rep Urdahl's flip flop of the Transportation vote.
Apparently, Urdahl's vote to sustain the Governor's Transportation veto had nothing to do with transportation. As a scholar of government, I ought to know that. Urdahl said quite a bit tonight, not going to lie...but apparently neither myself nor his wife understands what he does.
Bottomline, he flip flopped. Said he'd support a gas tax increase in October 2006, voted for it in the original bill, and flopped after the Governor called him to the carpet.
Despite this forum and run in, it only makes #7 on the list.
6. MinnCan pipeline. Nice to see the MinnCann pipeline taking shape just outside of Cokato (between the high school and the golf course). While the story remained on the periphery of Minnesota news in 07, the pipelines garnered a lot more attention after the accident at Clearbrook.
We'll get photos up after the New Year!
5. Elwyn Tinklenberg's resistance to abide by the DFL endorsement. As a Local Unit DFL official, I have sworn to support DFL endorsed candidates. Does it bother anyone else that when asked about the endorsement, Tinklenberg cannot give a straight answer?
At the November 15th forum at St Cloud State University, Tinklenberg stated his intentions on the endorsement. From the SC Times.
The DFL race would appear to be up to party delegates to decide, as Tinklenberg, who had avoided saying he would abide by the party's endorsement process earlier, appeared to commit Thursday.
"I supported the party's endorsed candidate before," he said of his 2006 endorsement loss to Patty Wetterling. "I will certainly do that again."
Olson reiterated his previous commitment to abide by the endorsement process.Yet, on December 13th at the SD 19 DFL meeting in Buffalo, Elwyn had this to say about the endorsement.
"We will honor the endorsement if it is an honorable and straight forward process."
Which left many potential delegates asking the question, "What, what does that mean?"
Elwyn came back with "We will honor the endorsement if it is an honorable and fair process."
Call me naive, but it sounds to me like someone who's prepping for a primary!
4. Dean Urdahl flip flops on Transportation. While admitting that Governor Pawlenty's Transportation plan underfunded roads in Greater Minnesota, Urdahl put politics before the people. Whats even more shameful of this vote was that Urdahl told County Commissioners that he would support a gas tax increase, during the 06 campaign cycle.
I expect more antics from Rep Urdahl now that he's in the minority. Let me guess, he'll work to address school funding reforms he did little about when he was in the majority.
3. Michele Bachmann. Dump Bachmann will do this more justice, but just off hand...
Groping the President, votes against working and middle class Minnesotan's, her Iran quotes, and a slew of other stories.
2. Luke Hellier and the MnSCU Board of Trustee's. I drew the ire of righty bloggers and radio talk show hosts for this one, and we were dead on. The issue is still closely followed by the statewide student associations. MSUSA, the 4 year student association, is anxiously awaiting their replacement to the MnSCU Board, a mere 6 months late now. It's much worse for MSCSA, the 2 year student association. Their student representative has served 18 months past the end of her initial appointment, without replacement.
Meanwhile, Governor Pawlenty spends his time pimping John McCain.
1. Walter Reed Scandal / Veterans Suicide. Support Our Troops, Liberate Iraq was the slogan on the lawnsign. Too bad it never carried over to when our brave men and women came home.
Being treated in despicable conditions at Walter Reed and other military and VA hospitals across the US, it took a Washington Post story to break this scandal wide open. Miles from the concrete palace our President resides in, our soldiers and Veterans were second class citizens.
Suicide rates of veterans also rose and remain more than double of "normal" society. Minnesota has lost no less than 16 Iraq or Afghanistan Veterans under the age of 30, since 2005.
It's a story that should be number 1 in more places than just Blueman and will remain a focal point of my blog.
From the Archives III: Inside MnDOT January 20,2003
The second story of the January 20th Inside MnDOT series.
Star Tribune (Minneapolis, MN) January 20, 2003, Monday, Metro Edition
INSIDE MnDOT; Allegations about MnDOT were kept quiet; Lawyer had drawn up document on contracting practices
Dan Browning; Pat Doyle; Staff Writers
Top officials responsible for overseeing state contracts and access to public records tried to keep some allegations against the Minnesota Department of Transportation from public view.
After the federal government criticized a light-rail contract in early 2000, the state Department of Administration commissioned a review of MnDOT's consulting contracts. Don Lewis, a lawyer in the Minneapolis firm of Halleland Lewis Nilan Sipkins & Johnson, produced a summary report and a list of 45 allegations from MnDOT and Administration employees. They included:
- Poor contract management that led to statute violations.
- Excessive use of contracts issued without competition or justification.
- Allowing contracts to grow beyond their original scope.
- Improper influence by contractors.
- Contractor overcharges.
- Failure to meet hiring goals for firms owned by women and minority members.
Kent Allin, who oversees the Administration division that reviews state contracts, released a copy of the allegations last spring when the Star Tribune asked for it under the state public-records law.
Allin said one of his bosses, Deputy Commissioner Kirsten Cecil, chewed him out for that. "She was upset with me because she believed they had all been destroyed," he said.
Cecil, whose department has a unit that interprets state law involving the public's access to government records, said she did not tell anyone to destroy any documents. She said she believed that the allegations should not have been released, citing attorney-client privilege, and that Lewis should have retained the list. Lewis said Cecil did return several copies of the paperwork.
Contract disputes prompted outside review
Administration decided to hire Lewis after the Federal Transit Administration warned that a $32 million light-rail contract had been awarded to a company with a potential conflict of interest.
Even before the review was initiated, the Administration Department was in a difficult spot. Minnesota law required it to oversee government contracts. But MnDOT wanted exemptions from such scrutiny, and it was accusing Administration of slowing down important projects, such as light rail, over minor technical shortcomings in its contracts.
"Meanwhile, my staff was telling me that MnDOT is a bad actor, they're bullies, they're arrogant, they're pushing the envelope," said David Fisher, administration commissioner at the time. "In fact, they were saying things like there's illegality going on."
Fisher met with Elwyn Tinklenberg (then transportation commissioner) and members of the governor's staff. MnDOT agreed to pay for an outside review. Fisher said he picked Lewis because he knew and trusted him. He wrote in an internal memo that he expected Lewis to "establish the integrity of the contracting process." But Allin balked at Fisher's choice of words.
"It could be read to suggest that we are looking to exonerate the 2 departments," he cautioned in an e-mail, referring to Administration and MnDOT. "The results also suggest that the investigator will fix the problems." Lewis agreed with Allin.
Fisher rewrote his memo to say reviewers should identify concerns and make recommendations.
Meanwhile, the Administration Department kept the investigation quiet. It killed a news release it had prepared to announce the review. Lewis' $55,000 contract required him only to issue an oral report, leaving Administration the option of a written report.
Allin warned Fisher not to mislead the public.
"I believe it would be a terrible mistake to tell the press that everything is hunky-dory with the LRT contracts and not disclose that we have a pending investigation of DOT contracting," he wrote. "The Gov's office may be trying to save light rail. That's a fine goal, but not at the expense of your and my personal reputations for integrity which will be seriously damaged when that fact comes to light."
List of allegations dropped from revised report
Lewis' firm collected the allegations in spring 2000 during interviews with a handful of MnDOT employees and Administration Department contract regulators. The attorney briefed top Administration officials about his preliminary findings that April.
According to notes from that meeting, Lewis did not find any "major integrity" issues, such as kickbacks or financial conflicts of interest. But he told the Star Tribune recently that MnDOT's shortcomings called for more scrutiny by the state.
"There were clearly issues of compliance with state law," he said.
Lewis summarized the allegations and distributed a document itemizing the details. Fisher said he asked Lewis to write a report that could be shared with MnDOT.
Despite what he learned, Fisher concluded that MnDOT could clean its own house. When he received Lewis' final written report in June 2000, he asked for revisions emphasizing Lewis' conclusion that there was no need for further independent investigation and that there were no apparent conflicts of interest.
When Fisher received the revised copy in July 2000, it emphasized that problems could be fixed through better management at MnDOT and did not require "major legislative or structural change."
A year after Lewis first briefed Administration about his findings, Allin sent Fisher a note discussing an independent audit that had been commissioned by the FTA. The audit, which had concluded five months earlier, found many deficiencies similar to those identified by Lewis. Among them: no record of competition on small purchases, failing to justify the selection of some vendors, shortcomings in procurement advertisements, working beyond the contract scope and failing to evaluate whether prices were reasonable.
Allin said that at a Nov. 9 meeting, "MnDOT was instructed to correct its deficiencies within 90 days. To date [April 11, 2001], that has not occurred."
Meanwhile, Administration failed to file a copy of the Lewis report with the Legislative Reference Library, as required by law, until this year.
After a Star Tribune reporter cited the law, Administration filed the revised report, without the list of allegations.
Lewis said that the list was an internal document and that he did not consider it to be part of his final report. But he submitted it to Administration at the department's request.
"There's no question it would be a useful document in terms of understanding a report," he said, "because it sort of fleshes out the issues."
Laura Bishop, assistant administration commissioner, later said that the failure to file a copy of the report for more than two years was an oversight.
Records show that Administration officials had considered claiming attorney-client privilege to keep Lewis' work confidential but decided to release the documents after Betsy Hayes, a department lawyer, argued that Lewis had been hired as a consultant, so no such privilege existed.
"I am sorry if my analysis of these documents has caused you further problems," Hayes wrote in a memo to her boss. "But, I've never known of . . . reports and audits of this nature, paid for with public dollars, [to be] something we would withhold from public scrutiny."
Memo:
"I believe it would be a terrible mistake to tell the press that everything is hunky-dory with the LRT contracts and not disclose that we have a pending investigation of DOT contracting. ... The Gov's office may be trying to save light rail. That's a fine goal, but not at the expense of your and my personal reputations for integrity which will be seriously damaged when that fact comes to light."
Kent Allin, then assistant commission of administration, to his supervisor, Administration Commissioner David Fisher, in 2000.
Star Tribune (Minneapolis, MN) January 20, 2003, Monday, Metro Edition
INSIDE MnDOT; Allegations about MnDOT were kept quiet; Lawyer had drawn up document on contracting practices
Dan Browning; Pat Doyle; Staff Writers
Top officials responsible for overseeing state contracts and access to public records tried to keep some allegations against the Minnesota Department of Transportation from public view.
After the federal government criticized a light-rail contract in early 2000, the state Department of Administration commissioned a review of MnDOT's consulting contracts. Don Lewis, a lawyer in the Minneapolis firm of Halleland Lewis Nilan Sipkins & Johnson, produced a summary report and a list of 45 allegations from MnDOT and Administration employees. They included:
- Poor contract management that led to statute violations.
- Excessive use of contracts issued without competition or justification.
- Allowing contracts to grow beyond their original scope.
- Improper influence by contractors.
- Contractor overcharges.
- Failure to meet hiring goals for firms owned by women and minority members.
Kent Allin, who oversees the Administration division that reviews state contracts, released a copy of the allegations last spring when the Star Tribune asked for it under the state public-records law.
Allin said one of his bosses, Deputy Commissioner Kirsten Cecil, chewed him out for that. "She was upset with me because she believed they had all been destroyed," he said.
Cecil, whose department has a unit that interprets state law involving the public's access to government records, said she did not tell anyone to destroy any documents. She said she believed that the allegations should not have been released, citing attorney-client privilege, and that Lewis should have retained the list. Lewis said Cecil did return several copies of the paperwork.
Contract disputes prompted outside review
Administration decided to hire Lewis after the Federal Transit Administration warned that a $32 million light-rail contract had been awarded to a company with a potential conflict of interest.
Even before the review was initiated, the Administration Department was in a difficult spot. Minnesota law required it to oversee government contracts. But MnDOT wanted exemptions from such scrutiny, and it was accusing Administration of slowing down important projects, such as light rail, over minor technical shortcomings in its contracts.
"Meanwhile, my staff was telling me that MnDOT is a bad actor, they're bullies, they're arrogant, they're pushing the envelope," said David Fisher, administration commissioner at the time. "In fact, they were saying things like there's illegality going on."
Fisher met with Elwyn Tinklenberg (then transportation commissioner) and members of the governor's staff. MnDOT agreed to pay for an outside review. Fisher said he picked Lewis because he knew and trusted him. He wrote in an internal memo that he expected Lewis to "establish the integrity of the contracting process." But Allin balked at Fisher's choice of words.
"It could be read to suggest that we are looking to exonerate the 2 departments," he cautioned in an e-mail, referring to Administration and MnDOT. "The results also suggest that the investigator will fix the problems." Lewis agreed with Allin.
Fisher rewrote his memo to say reviewers should identify concerns and make recommendations.
Meanwhile, the Administration Department kept the investigation quiet. It killed a news release it had prepared to announce the review. Lewis' $55,000 contract required him only to issue an oral report, leaving Administration the option of a written report.
Allin warned Fisher not to mislead the public.
"I believe it would be a terrible mistake to tell the press that everything is hunky-dory with the LRT contracts and not disclose that we have a pending investigation of DOT contracting," he wrote. "The Gov's office may be trying to save light rail. That's a fine goal, but not at the expense of your and my personal reputations for integrity which will be seriously damaged when that fact comes to light."
List of allegations dropped from revised report
Lewis' firm collected the allegations in spring 2000 during interviews with a handful of MnDOT employees and Administration Department contract regulators. The attorney briefed top Administration officials about his preliminary findings that April.
According to notes from that meeting, Lewis did not find any "major integrity" issues, such as kickbacks or financial conflicts of interest. But he told the Star Tribune recently that MnDOT's shortcomings called for more scrutiny by the state.
"There were clearly issues of compliance with state law," he said.
Lewis summarized the allegations and distributed a document itemizing the details. Fisher said he asked Lewis to write a report that could be shared with MnDOT.
Despite what he learned, Fisher concluded that MnDOT could clean its own house. When he received Lewis' final written report in June 2000, he asked for revisions emphasizing Lewis' conclusion that there was no need for further independent investigation and that there were no apparent conflicts of interest.
When Fisher received the revised copy in July 2000, it emphasized that problems could be fixed through better management at MnDOT and did not require "major legislative or structural change."
A year after Lewis first briefed Administration about his findings, Allin sent Fisher a note discussing an independent audit that had been commissioned by the FTA. The audit, which had concluded five months earlier, found many deficiencies similar to those identified by Lewis. Among them: no record of competition on small purchases, failing to justify the selection of some vendors, shortcomings in procurement advertisements, working beyond the contract scope and failing to evaluate whether prices were reasonable.
Allin said that at a Nov. 9 meeting, "MnDOT was instructed to correct its deficiencies within 90 days. To date [April 11, 2001], that has not occurred."
Meanwhile, Administration failed to file a copy of the Lewis report with the Legislative Reference Library, as required by law, until this year.
After a Star Tribune reporter cited the law, Administration filed the revised report, without the list of allegations.
Lewis said that the list was an internal document and that he did not consider it to be part of his final report. But he submitted it to Administration at the department's request.
"There's no question it would be a useful document in terms of understanding a report," he said, "because it sort of fleshes out the issues."
Laura Bishop, assistant administration commissioner, later said that the failure to file a copy of the report for more than two years was an oversight.
Records show that Administration officials had considered claiming attorney-client privilege to keep Lewis' work confidential but decided to release the documents after Betsy Hayes, a department lawyer, argued that Lewis had been hired as a consultant, so no such privilege existed.
"I am sorry if my analysis of these documents has caused you further problems," Hayes wrote in a memo to her boss. "But, I've never known of . . . reports and audits of this nature, paid for with public dollars, [to be] something we would withhold from public scrutiny."
Memo:
"I believe it would be a terrible mistake to tell the press that everything is hunky-dory with the LRT contracts and not disclose that we have a pending investigation of DOT contracting. ... The Gov's office may be trying to save light rail. That's a fine goal, but not at the expense of your and my personal reputations for integrity which will be seriously damaged when that fact comes to light."
Kent Allin, then assistant commission of administration, to his supervisor, Administration Commissioner David Fisher, in 2000.
Saturday, December 29, 2007
The Hills are Alive...(Updated)
...with the Sound of Music.
Blueman's going to get some culture today. Imagine that, Blueman at a musical.
I wonder if Bluewoman will allow me to use her Blackberry to live blog it?
Probably not...
I doubt I'd get away with smuggling anything into the show either (Budweiser commercial).
After all, I do drag Bluewoman to a few DFL events and she smiles when her favorite US Senate candidate sits at our table (twice)...it's time to take one for the team!
All kidding aside, I actually think this will be a good time!
*Update*
Wow, it was an impressive show. The singing was amazing!
Blueman's going to get some culture today. Imagine that, Blueman at a musical.
I wonder if Bluewoman will allow me to use her Blackberry to live blog it?
Probably not...
I doubt I'd get away with smuggling anything into the show either (Budweiser commercial).
After all, I do drag Bluewoman to a few DFL events and she smiles when her favorite US Senate candidate sits at our table (twice)...it's time to take one for the team!
All kidding aside, I actually think this will be a good time!
*Update*
Wow, it was an impressive show. The singing was amazing!
From the Archives II: Inside MnDOT Jaunary 20, 2003
This series is one of several reasons I cannot support Elwyn Tinklenberg. Running on his Transportation record against Bachmann makes him too vulnerable. I'll continue to post the remainder of the series, but Tinklenberg's involvement needs to be discussed.
Star Tribune (Minneapolis, MN) January 20, 2003, Monday, Metro Edition
INSIDE MnDOT; Watchdogs or nitpickers? Two agencies fight it out; The Transportation and Administration departments have a history of feuding over the final say on outside contracts.
Dan Browning; Pat Doyle; Staff Writers
Second of three parts
On the bookcase next to Gerald Joyce's desk is a cat-litter scoop labeled "In Case of MnDOT."
Joyce is a contract regulator for the state Department of Administration. For more than a decade, he has reviewed efforts by the Minnesota Department of Transportation to hire consultants and expand contracts without seeking competitive bids. His patience ran out long ago.
"The dollar sign at MnDOT means 'only,' " he said. "It's only 20 million. Or it's only 10 million."
The Administration Department has final responsibility for most contracts between state departments and industry. Many MnDOT engineers view the Administration watchdogs as rule-bound nitpickers who don't understand the real-world measures needed to get roads, bridges and rail lines built.
In turn, Joyce and his colleagues have accused MnDOT of using improper tactics to evade their authority. But as the quarrel heated up during the Ventura administration, their commissioner gave much of that authority away.
By 2001, the strain of a $675 million light-rail project and a special $459 million road and bridge program pushed the departments to the breaking point. So David Fisher, then administration commissioner, and Elwyn Tinklenberg, then transportation commissioner, worked out their own solution to expedite contracts, which Fisher referred to in a document as the Big Fix.
Among other things, two MnDOT employees were given authority to bypass Administration regulators on most contracts, and a fast-track review process was begun.
At about the same time as those issues were being worked out, Tinklenberg agreed to contribute part of the money MnDOT collects from leasing space on radio towers along state highways to a new technology enterprise fund administered by Fisher.
Meanwhile, both agreed that their staffs wouldn't publicly criticize each other.
Tinklenberg, who stepped down in October, has declined recent requests to comment. Fisher, whose term ended in early January, flatly denied any connection between his decision to yield on contract issues and MnDOT's promised payments to the technology fund.
But Betsy Hayes, a lawyer in the Administration Department, said she worries that people might think there was an agreement to relax oversight in exchange for a promise of future funding.
"I think that it would be improper for us to try to get into the minds of what the two commissioners were contemplating, exactly," Hayes said recently. "But certainly one of the things that we try to do, or I try to do when I'm advising people, is to not create an appearance of improprieties. And I think that is a concern here with me."
Light-rail project was a source of tension
The Hiawatha Avenue light-rail transit project (LRT), a centerpiece of former Gov. Jesse Ventura's election campaign, was already barreling down the tracks when Tinklenberg became commissioner in January 1999. To fulfill the promises of his boss, he would need to get the line built, fast.
Within months of his appointment, he and his deputies were angling for less oversight.
In June 1999, Margo LaBau, Tinklenberg's chief of staff, wrote of the concern in an e-mail to Doug Weiszhaar, a prospective deputy commissioner. "We need some broader authority in letting contracts for professional services," she said, "especially as it relates to LRT and commuter rail."
Over at Administration, Fisher already had demanded to be notified in writing anytime one of his staff members was planning to reject a request from the legislative or executive branches. The department, he observed, had a reputation for being an impediment.
To Fisher's chagrin, it became known in his department as his "Just (don't) say no" policy.
In a recent interview, he explained: "Rather than have things just stop dead in their tracks and then . . . well up in the governor's office or the commissioner's office in a complaint, let's address it up front. Let's work with these guys and see if something can be done."
Nonetheless, Kent Allin, an assistant administration commissioner who oversaw the department's contract regulators, warned Fisher of possible trouble on the $3.2 million contract for preliminary design work on light rail. The Minneapolis engineering firm BRW Inc. (now owned by URS Corp. of San Francisco) had the contract; the New York firm Parsons Brinckerhoff Quade & Douglas was a subcontractor.
MnDOT wanted Administration to approve two large amendments that would change the nature of the original contract with BRW and increase its cost ceiling by nearly 75 percent. Such dramatic changes generally require competitive proposals to ensure that taxpayers get the best deal.
But Fisher told his staff that he wanted to get the contract "on the ground ASAP." Noting that Tinklenberg had personally asked him to approve the amendments, he ordered it done.
In an e-mail to his staff, Allin described the situation as a mess: "Supplement #1 is for $900K.
The work has been largely completed without the amendment ever being executed. That's a clear violation of state law and something we try hard to avoid."
Allin told his staff that "given the massive water already over the dam," they would need to document the facts leading up to the situation so the department could justify signing the amendment.
Administration also agreed to expedite the second amendment, worth $1.5 million, though it considered the work beyond the scope of the original contract.
Ask the watchdogs why it's important to have an independent review of MnDOT's contracting procedures, and they point to a time in 1999 when they stopped the department from sidestepping a pending competitive bidding process to give a $32 million light-rail management contract directly to Parsons Brinckerhoff.
The agency initially advertised for proposals, but before the responses were due, MnDOT officials privately had asked Parsons Brinckerhoff to submit a proposal for what what was initially estimated to be a $20 million job.
Allin said that Fisher already had given his tentative approval, but that his staff raised red flags.
"This is a $20,000,000, highly visible project that is very susceptible to law suits," regulators wrote. "The advertising process should be followed!"
Fisher ultimately sided with his staff and told MnDOT to seek bids. But MnDOT said it needed a transit expert right away to help meet a funding deadline. Fisher said that's why he agreed to let MnDOT add a third amendment to the BRW contract, for $1.1 million, allowing an employee of subcontractor Parsons Brinckerhoff to serve as interim project manager while bids were sought.
Parsons Brinckerhoff bid on the project and won, sparking allegations of a conflict of interest.
Federal authorities said the process appeared tainted, and they ordered the state to redo it.
MnDOT scaled back the job, which was won by O'Brien Kreitzberg (now owned by URS) with a bid of $15.4 million. Parsons Brinckerhoff didn't submit a new bid.
The battle goes to the Legislature
Despite Fisher's accommodations, MnDOT concluded that his regulators had become too much of an irritant.
"I don't know who the problem here is but it is shaping up to look like Admin is going to give us a problem on everything with LRT," LaBau e-mailed a colleague. Another MnDOT manager wrote, "We cannot meet aggressive schedules if we continue to encounter this kind of delay on a relatively easy straight forward contract."
Bruce Biser, assistant director of management operations for MnDOT, said in an interview that his agency's engineers look at state contracting laws and Administration's oversight as nettlesome paperwork, while the watchdogs at Administration "see themselves as . . . the altruistic steward of the taxpayers."
"If our engineer guys had their way," Biser said, "Admin would be out of our hair forever, legislatively."
In late 2000, with the next legislative session on the horizon, MnDOT pressed for greater autonomy. The agency supported proposals that would let it select consultants without competitive bidding on contracts worth as much as $50,000 (lifting a $5,000 limit) and would loosen other requirements on contracts worth as much as $100,000.
Joyce joined Heather Pickett, an attorney who had worked at MnDOT for four years before she joined Administration, in opposing the proposals. In a memo to their bosses, they said that if the ideas were approved, the same contractors would be chosen over and over.
"We have seen this in practice, so it's not just a theory," they said. "The small contractor will be lost in the shuffle."
They said the biggest losers would be firms owned by minority members and women. Two 1999 audits of MnDOT's contracts had found underrepresentation of such firms. The problem was worst with respect to contracts below $75,000, for which agency personnel have greater discretion in choosing a contractor. The audit found what it called "active discrimination rather than passive discrimination" on those contracts.
Joyce and Pickett also argued that selecting contractors without competition can lead to higher prices. They noted that Joyce had once saved the state $70,000 by forcing his own department to drop a no-bid approach.
"We think DOT has forgotten the value of a dollar," Pickett wrote. "Ultimately, DOT has given us no reason to trust that it will use the new levels wisely and fairly."
But the Associated General Contractors, a trade group, pushed a bill to wrest the department free from Administration scrutiny, insisting it would speed the contracting process. State Sen. Mark Ourada, a Republican from Buffalo who works for a paving contractor, agreed to spearhead the legislation. It passed, but other legislation later reinstated Administration's authority over MnDOT.
With their relationship fraying, Administration and MnDOT began making lists of their gripes.
MnDOT said Administration rejected too many no-bid contracts, demanded too many explanations for amending contracts and wasn't willing to allow reasonable risks on high-priority projects. MnDOT accused regulators of making arbitrary and inconsistent decisions on matters they didn't understand.
In response, Allin asked Pickett for a list of MnDOT problems. She produced 23 pages of them that were later condensed to two pages and dubbed "DOT Horror Stories."
Pickett calculated that in 2000, MnDOT sought to hire 41 percent of its consultants without requiring them to bid for the work. "Requests must be carefully reviewed because the approval of the request may cause political backlash or a lawsuit," she said.
Allin, in a recent interview, said that he never circulated the list outside of his department but that he wanted it in case he needed it in the fight with MnDOT.
Fisher, Tinklenberg and the 'Big Fix'
On Feb. 15, 2001, Fisher visited Tinklenberg in his office to discuss contracting issues. It was just the two of them, Fisher later told his staff in an e-mail. Fisher said Tinklenberg asked whether certain MnDOT officials could sign consulting contracts without going through Administration, "to move some things that are 'hot' currently."
At about the same time, Fisher, a technology buff who had been vice president of and general counsel to a telecommunications firm, was pushing a bill to establish a fund that would pay for statewide computer integration and related activities. He wanted MnDOT to contribute a fifth of the revenue it receives from leasing unused space on radio towers along highways.
Fisher sent Allin a handwritten note saying Administration should consider advancing MnDOT's contracts when "both the Governor and Legislature are pressing hard for MnDOT to move speedily with road/bridge work. This pertains specifically and solely to the $500 million appropriated in the 2000-2001 session."
Allin said he interpreted that as a directive "to go easier on MnDOT."
Fisher said he wasn't suggesting a free ride. "I wanted to make sure we removed doubt about Admin being a roadblock," he said. "It did not say treat them differently in terms of compromising principles."
In April, records show, Fisher agreed to fast-track MnDOT's consulting contracts and to give two MnDOT employees authority to sign most of them on his behalf.
Tinklenberg agreed to give 20 percent of the tower lease money to Fisher's fledgling technology fund and to help him with other technology projects when possible, the records show.
Finally, the two commissioners agreed to "assure that no agency representative criticizes the other agency to any non-agency party."
In an interview, Fisher said the fact that the issues were listed in the same document does not mean one was traded for the other.
"I can tell you . . . there is no context or connection," he said. "They are just a collection of issues."
A watchdog gets fired, but later is reinstated
Fisher fired Allin after the Star Tribune reported last March that Allin and his staff had written memos strongly critical of MnDOT contracting practices. Allin got a lawyer and was quickly reinstated as director of the contract-oversight division, although he was stripped of the title of assistant commissioner. He said he was barred from speaking publicly about his department without approval.
Seven of his colleagues complained in a September letter to a Star Tribune reporter that Allin had been sidelined. "We wish more elected and appointed officials showed his commitment to the state's best interest," they wrote.
Administration eventually allowed Allin to speak with a reporter, with a superior present. He said he hopes to have his authority reinstated under the administration of Gov. Tim Pawlenty, who took office this month. (Early this month, Allin dropped possible legal claims against the state in exchange for $150,000 and a statement from Fisher to his colleagues describing him as a valued public servant.)
Tinklenberg resigned in October without contributing to Fisher's fund.
In an undated memo to himself, Fisher concluded that Administration was not an obstacle to MnDOT's contracts but that the agency wouldn't be happy unless it was autonomous, which has largely been accomplished.
Fisher's "delegations of authority" permitting MnDOT to sign most of its own consulting contracts expired with his term on Jan. 6. Fisher's replacement, Brian Lamb, recently reinstated them to keep things running smoothly, Allin said. But he added that Lamb wanted assurances that he could reconsider.
Said Allin: "I think this department should take a tougher position with respect to MnDOT. When I was terminated, I was told one reason was for not following the policy of appeasement of MnDOT.
"And I can understand the pressures to move DOT's agenda, which I think is important, but I think there has to be public accountability for MnDOT contracts, and we've let that go . . . through the delegations and through the eagerness to make MnDOT happy at any cost."
Lamb said in a recent interview that he didn't have enough information to say what he will do. But philosophically, and especially in light of the projected budget shortfall, Lamb said he was open to letting other agencies pick up some of Administration's tasks, such as supervising contract procedures.
Any such moves would require "a fair amount of care and attention," he said, adding that he would have to feel comfortable that "the state and the taxpayers are held in . . . the forefront of any decisions."
Lt. Gov. Carol Molnau, who has been named to serve a dual role by leading MnDOT, said she expects that Administration will oversee her department's contracts through random audits, a process Fisher started.
"So our job then is to make sure that every contract is done appropriately," Molnau said, "because we have no idea which contracts they'll be looking at."
Star Tribune (Minneapolis, MN) January 20, 2003, Monday, Metro Edition
INSIDE MnDOT; Watchdogs or nitpickers? Two agencies fight it out; The Transportation and Administration departments have a history of feuding over the final say on outside contracts.
Dan Browning; Pat Doyle; Staff Writers
Second of three parts
On the bookcase next to Gerald Joyce's desk is a cat-litter scoop labeled "In Case of MnDOT."
Joyce is a contract regulator for the state Department of Administration. For more than a decade, he has reviewed efforts by the Minnesota Department of Transportation to hire consultants and expand contracts without seeking competitive bids. His patience ran out long ago.
"The dollar sign at MnDOT means 'only,' " he said. "It's only 20 million. Or it's only 10 million."
The Administration Department has final responsibility for most contracts between state departments and industry. Many MnDOT engineers view the Administration watchdogs as rule-bound nitpickers who don't understand the real-world measures needed to get roads, bridges and rail lines built.
In turn, Joyce and his colleagues have accused MnDOT of using improper tactics to evade their authority. But as the quarrel heated up during the Ventura administration, their commissioner gave much of that authority away.
By 2001, the strain of a $675 million light-rail project and a special $459 million road and bridge program pushed the departments to the breaking point. So David Fisher, then administration commissioner, and Elwyn Tinklenberg, then transportation commissioner, worked out their own solution to expedite contracts, which Fisher referred to in a document as the Big Fix.
Among other things, two MnDOT employees were given authority to bypass Administration regulators on most contracts, and a fast-track review process was begun.
At about the same time as those issues were being worked out, Tinklenberg agreed to contribute part of the money MnDOT collects from leasing space on radio towers along state highways to a new technology enterprise fund administered by Fisher.
Meanwhile, both agreed that their staffs wouldn't publicly criticize each other.
Tinklenberg, who stepped down in October, has declined recent requests to comment. Fisher, whose term ended in early January, flatly denied any connection between his decision to yield on contract issues and MnDOT's promised payments to the technology fund.
But Betsy Hayes, a lawyer in the Administration Department, said she worries that people might think there was an agreement to relax oversight in exchange for a promise of future funding.
"I think that it would be improper for us to try to get into the minds of what the two commissioners were contemplating, exactly," Hayes said recently. "But certainly one of the things that we try to do, or I try to do when I'm advising people, is to not create an appearance of improprieties. And I think that is a concern here with me."
Light-rail project was a source of tension
The Hiawatha Avenue light-rail transit project (LRT), a centerpiece of former Gov. Jesse Ventura's election campaign, was already barreling down the tracks when Tinklenberg became commissioner in January 1999. To fulfill the promises of his boss, he would need to get the line built, fast.
Within months of his appointment, he and his deputies were angling for less oversight.
In June 1999, Margo LaBau, Tinklenberg's chief of staff, wrote of the concern in an e-mail to Doug Weiszhaar, a prospective deputy commissioner. "We need some broader authority in letting contracts for professional services," she said, "especially as it relates to LRT and commuter rail."
Over at Administration, Fisher already had demanded to be notified in writing anytime one of his staff members was planning to reject a request from the legislative or executive branches. The department, he observed, had a reputation for being an impediment.
To Fisher's chagrin, it became known in his department as his "Just (don't) say no" policy.
In a recent interview, he explained: "Rather than have things just stop dead in their tracks and then . . . well up in the governor's office or the commissioner's office in a complaint, let's address it up front. Let's work with these guys and see if something can be done."
Nonetheless, Kent Allin, an assistant administration commissioner who oversaw the department's contract regulators, warned Fisher of possible trouble on the $3.2 million contract for preliminary design work on light rail. The Minneapolis engineering firm BRW Inc. (now owned by URS Corp. of San Francisco) had the contract; the New York firm Parsons Brinckerhoff Quade & Douglas was a subcontractor.
MnDOT wanted Administration to approve two large amendments that would change the nature of the original contract with BRW and increase its cost ceiling by nearly 75 percent. Such dramatic changes generally require competitive proposals to ensure that taxpayers get the best deal.
But Fisher told his staff that he wanted to get the contract "on the ground ASAP." Noting that Tinklenberg had personally asked him to approve the amendments, he ordered it done.
In an e-mail to his staff, Allin described the situation as a mess: "Supplement #1 is for $900K.
The work has been largely completed without the amendment ever being executed. That's a clear violation of state law and something we try hard to avoid."
Allin told his staff that "given the massive water already over the dam," they would need to document the facts leading up to the situation so the department could justify signing the amendment.
Administration also agreed to expedite the second amendment, worth $1.5 million, though it considered the work beyond the scope of the original contract.
Ask the watchdogs why it's important to have an independent review of MnDOT's contracting procedures, and they point to a time in 1999 when they stopped the department from sidestepping a pending competitive bidding process to give a $32 million light-rail management contract directly to Parsons Brinckerhoff.
The agency initially advertised for proposals, but before the responses were due, MnDOT officials privately had asked Parsons Brinckerhoff to submit a proposal for what what was initially estimated to be a $20 million job.
Allin said that Fisher already had given his tentative approval, but that his staff raised red flags.
"This is a $20,000,000, highly visible project that is very susceptible to law suits," regulators wrote. "The advertising process should be followed!"
Fisher ultimately sided with his staff and told MnDOT to seek bids. But MnDOT said it needed a transit expert right away to help meet a funding deadline. Fisher said that's why he agreed to let MnDOT add a third amendment to the BRW contract, for $1.1 million, allowing an employee of subcontractor Parsons Brinckerhoff to serve as interim project manager while bids were sought.
Parsons Brinckerhoff bid on the project and won, sparking allegations of a conflict of interest.
Federal authorities said the process appeared tainted, and they ordered the state to redo it.
MnDOT scaled back the job, which was won by O'Brien Kreitzberg (now owned by URS) with a bid of $15.4 million. Parsons Brinckerhoff didn't submit a new bid.
The battle goes to the Legislature
Despite Fisher's accommodations, MnDOT concluded that his regulators had become too much of an irritant.
"I don't know who the problem here is but it is shaping up to look like Admin is going to give us a problem on everything with LRT," LaBau e-mailed a colleague. Another MnDOT manager wrote, "We cannot meet aggressive schedules if we continue to encounter this kind of delay on a relatively easy straight forward contract."
Bruce Biser, assistant director of management operations for MnDOT, said in an interview that his agency's engineers look at state contracting laws and Administration's oversight as nettlesome paperwork, while the watchdogs at Administration "see themselves as . . . the altruistic steward of the taxpayers."
"If our engineer guys had their way," Biser said, "Admin would be out of our hair forever, legislatively."
In late 2000, with the next legislative session on the horizon, MnDOT pressed for greater autonomy. The agency supported proposals that would let it select consultants without competitive bidding on contracts worth as much as $50,000 (lifting a $5,000 limit) and would loosen other requirements on contracts worth as much as $100,000.
Joyce joined Heather Pickett, an attorney who had worked at MnDOT for four years before she joined Administration, in opposing the proposals. In a memo to their bosses, they said that if the ideas were approved, the same contractors would be chosen over and over.
"We have seen this in practice, so it's not just a theory," they said. "The small contractor will be lost in the shuffle."
They said the biggest losers would be firms owned by minority members and women. Two 1999 audits of MnDOT's contracts had found underrepresentation of such firms. The problem was worst with respect to contracts below $75,000, for which agency personnel have greater discretion in choosing a contractor. The audit found what it called "active discrimination rather than passive discrimination" on those contracts.
Joyce and Pickett also argued that selecting contractors without competition can lead to higher prices. They noted that Joyce had once saved the state $70,000 by forcing his own department to drop a no-bid approach.
"We think DOT has forgotten the value of a dollar," Pickett wrote. "Ultimately, DOT has given us no reason to trust that it will use the new levels wisely and fairly."
But the Associated General Contractors, a trade group, pushed a bill to wrest the department free from Administration scrutiny, insisting it would speed the contracting process. State Sen. Mark Ourada, a Republican from Buffalo who works for a paving contractor, agreed to spearhead the legislation. It passed, but other legislation later reinstated Administration's authority over MnDOT.
With their relationship fraying, Administration and MnDOT began making lists of their gripes.
MnDOT said Administration rejected too many no-bid contracts, demanded too many explanations for amending contracts and wasn't willing to allow reasonable risks on high-priority projects. MnDOT accused regulators of making arbitrary and inconsistent decisions on matters they didn't understand.
In response, Allin asked Pickett for a list of MnDOT problems. She produced 23 pages of them that were later condensed to two pages and dubbed "DOT Horror Stories."
Pickett calculated that in 2000, MnDOT sought to hire 41 percent of its consultants without requiring them to bid for the work. "Requests must be carefully reviewed because the approval of the request may cause political backlash or a lawsuit," she said.
Allin, in a recent interview, said that he never circulated the list outside of his department but that he wanted it in case he needed it in the fight with MnDOT.
Fisher, Tinklenberg and the 'Big Fix'
On Feb. 15, 2001, Fisher visited Tinklenberg in his office to discuss contracting issues. It was just the two of them, Fisher later told his staff in an e-mail. Fisher said Tinklenberg asked whether certain MnDOT officials could sign consulting contracts without going through Administration, "to move some things that are 'hot' currently."
At about the same time, Fisher, a technology buff who had been vice president of and general counsel to a telecommunications firm, was pushing a bill to establish a fund that would pay for statewide computer integration and related activities. He wanted MnDOT to contribute a fifth of the revenue it receives from leasing unused space on radio towers along highways.
Fisher sent Allin a handwritten note saying Administration should consider advancing MnDOT's contracts when "both the Governor and Legislature are pressing hard for MnDOT to move speedily with road/bridge work. This pertains specifically and solely to the $500 million appropriated in the 2000-2001 session."
Allin said he interpreted that as a directive "to go easier on MnDOT."
Fisher said he wasn't suggesting a free ride. "I wanted to make sure we removed doubt about Admin being a roadblock," he said. "It did not say treat them differently in terms of compromising principles."
In April, records show, Fisher agreed to fast-track MnDOT's consulting contracts and to give two MnDOT employees authority to sign most of them on his behalf.
Tinklenberg agreed to give 20 percent of the tower lease money to Fisher's fledgling technology fund and to help him with other technology projects when possible, the records show.
Finally, the two commissioners agreed to "assure that no agency representative criticizes the other agency to any non-agency party."
In an interview, Fisher said the fact that the issues were listed in the same document does not mean one was traded for the other.
"I can tell you . . . there is no context or connection," he said. "They are just a collection of issues."
A watchdog gets fired, but later is reinstated
Fisher fired Allin after the Star Tribune reported last March that Allin and his staff had written memos strongly critical of MnDOT contracting practices. Allin got a lawyer and was quickly reinstated as director of the contract-oversight division, although he was stripped of the title of assistant commissioner. He said he was barred from speaking publicly about his department without approval.
Seven of his colleagues complained in a September letter to a Star Tribune reporter that Allin had been sidelined. "We wish more elected and appointed officials showed his commitment to the state's best interest," they wrote.
Administration eventually allowed Allin to speak with a reporter, with a superior present. He said he hopes to have his authority reinstated under the administration of Gov. Tim Pawlenty, who took office this month. (Early this month, Allin dropped possible legal claims against the state in exchange for $150,000 and a statement from Fisher to his colleagues describing him as a valued public servant.)
Tinklenberg resigned in October without contributing to Fisher's fund.
In an undated memo to himself, Fisher concluded that Administration was not an obstacle to MnDOT's contracts but that the agency wouldn't be happy unless it was autonomous, which has largely been accomplished.
Fisher's "delegations of authority" permitting MnDOT to sign most of its own consulting contracts expired with his term on Jan. 6. Fisher's replacement, Brian Lamb, recently reinstated them to keep things running smoothly, Allin said. But he added that Lamb wanted assurances that he could reconsider.
Said Allin: "I think this department should take a tougher position with respect to MnDOT. When I was terminated, I was told one reason was for not following the policy of appeasement of MnDOT.
"And I can understand the pressures to move DOT's agenda, which I think is important, but I think there has to be public accountability for MnDOT contracts, and we've let that go . . . through the delegations and through the eagerness to make MnDOT happy at any cost."
Lamb said in a recent interview that he didn't have enough information to say what he will do. But philosophically, and especially in light of the projected budget shortfall, Lamb said he was open to letting other agencies pick up some of Administration's tasks, such as supervising contract procedures.
Any such moves would require "a fair amount of care and attention," he said, adding that he would have to feel comfortable that "the state and the taxpayers are held in . . . the forefront of any decisions."
Lt. Gov. Carol Molnau, who has been named to serve a dual role by leading MnDOT, said she expects that Administration will oversee her department's contracts through random audits, a process Fisher started.
"So our job then is to make sure that every contract is done appropriately," Molnau said, "because we have no idea which contracts they'll be looking at."
Friday, December 28, 2007
Olson LTE in the SC Times
Bob Olson, candidate for Congress in the 6th CD, was mentioned in a LTE in the SC Times today. Discussing Bachmann's recent no vote on the energy bill, a Clearwater resident said the following.
The Tinklenberg website still makes no mention of "the issues", three weeks after their campaign manager announced it was supposed to be "updated"...A news report in the Sunday St. Cloud Times quoted our congressional leaders on their opinions about the recent congressional session.
I found it interesting that Rep. Michele Bachmann claims that "Republicans kept a steady hand and we held together with the president" when she did exactly the opposite on the energy bill.
While not as good as it could have been, the energy bill signed by President Bush does mandate increased fuel efficiency standards and more use of biofuels.
Claiming that it is a "recipe for recession" and that there's "not one watt of new energy produced in this bill," Bachmann voted against it. Thankfully, she was in the minority, but it certainly makes one question her understanding of the energy situation in this country.
There is a candidate for the 6th District who has made it a priority to study alternative energy and its possibilities. He's businessman Bob Olson, and, according to his Web site, he wrote to Bachmann to share some very basic information with her before her vote.
However, she doesn't seem to want to look at new possibilities and would rather continue our dependence on foreign oil. It seems that bringing good jobs to this area while weaning us off foreign oil would be something folks in the 6th District would be interested in.
Bob Olson knows how to bring that possibility into a reality. Is Michele Bachmann really in tune with the people of her district?
From the archives: Inside MnDOT January 2003
Bob Olson Challenger, Elwyn Tinklenberg is prominently featured in this 2003 Startribune series titled, "Inside MnDOT". Since Tinklenberg is running on his Transportation record, a full disclosure and discussion of said record is appropriate.
Star Tribune (Minneapolis, MN)
January 19, 2003, Sunday, Metro Edition
INSIDE MnDOT; MnDOT swerves around the law; Agency flouted rules on consultants
Dan Browning; Pat Doyle; Staff Writers
When the Minnesota Department of Transportation lost a $17-an-hour employee, it quickly hired her as a $100-an-hour consultant and gave her a string of contracts, despite repeated warnings from regulators that others should have been considered for the work.
When MnDOT was in a hurry to clean up a site that was to become a maintenance yard for the state's first light-rail line, it put an engineering firm to work without having a binding contract or money in place admittedly violating state law.
Under pressure to build roads and rail, MnDOT increasingly has turned to outside consultants, paying them nearly $60 million last year. Laws and regulations exist to ensure that consulting contracts are reached fairly and competitively and that tax dollars are spent prudently. But the Star Tribune has found that MnDOT the third-biggest spender among state agencies, has played by its own rules.
A review of tens of thousands of government e-mails, memos and other documents shows that MnDOT often has avoided competition when awarding consulting contracts, has doubled or even tripled payments without bids and has broken laws by putting consultants to work before deals were approved or even funded.
Behind the scenes, state regulators have criticized such practices for years, describing the agency as a bully running roughshod over efforts to ensure fair contracting. Auditors, too, have criticized the way MnDOT handles consultants.
Even so, Elwyn Tinklenberg, who led MnDOT for nearly four years before resigning in October, has called the agency's procedures "reasonable and appropriate." During a radio appearance in August, he praised the agency's 5,300 employees, "who are working like crazy to do the best job they can with limited resources to protect the mobility of Minnesota."
But as a new administration settles in, the agency will probably face tougher scrutiny. Gov. Tim Pawlenty said the newspaper's findings raise questions about whether agency officials have been too close to some consultants, and he called some of MnDOT's spending decisions outrageous.
Pawlenty named Lt. Gov. Carol Molnau to double as the agency's new commissioner. As a legislator, Molnau accused MnDOT of misrepresenting costs for the Hiawatha Avenue light-rail line and resisting scrutiny. During last year's campaign, she promised "major reforms."
In a recent interview, she said that employees already are suggesting improvements. "Our goal is accountability," she said. "So when we have contract issues, they will be done according to the standards."
Unlike typical construction work or purchases, consulting jobs need not go to the lowest bidder, agencies may consider a variety of subjective factors. But last week, the legislative auditor reported that six state agencies it surveyed, including MnDOT, broke laws or ignored sound management practices when hiring consultants.
The Department of Administration has the authority to approve or reject most state contracts. Regulators there have said that MnDOT gives them the most trouble; many of their complaints are evident in internal documents.
According to the Minnesota Department of Finance, the state spent $2.2 billion on professional or technical consultants from 1996 through late 2002, an average of about $303 million a year. MnDOT was the biggest spender, accounting for 16 percent of the total.
Some of that money has gone to large companies. Some has gone to individuals. In both situations, regulators have questioned whether it was distributed fairly or in ways that produce a good value for taxpayers.
One contract leads to another
One of those cases involved Carolyn Bacon.
MnDOT managers liked Bacon, who worked for them as an employee-development specialist in the early 1990s. About five months after leaving that $17.25-an-hour job in 1993, she returned part time as a $100-an-hour consultant, running meetings, planning retreats and reorganizing staff. She has received contracts worth $266,270, MnDOT records show.
Minnesota law forbids the hiring of consultants for jobs exceeding $5,000 if state employees are available. In addition, even small contracts are supposed to go through an informal bidding process. Heather Pickett, a contract watchdog for the Minnesota Department of Administration, questioned Bacon's contracts in 2000.
"It appears that Mn/DOT is giving a great deal of this type of work just to Ms. Bacon, especially when there are other people, as well as state employees, who could perform this work. Fair and open competition is the goal when selecting contractors," she wrote in a memo to the agency.
Pickett, a lawyer and former MnDOT employee herself, wrote that in the future, MnDOT would need to explain why it chose Bacon and whether competitors were sought.
Soon after, a $66,100 contract of Bacon's was due to expire. The agency wanted her to continue working so she could help in a staff reorganization. Pickett said she told the department to seek proposals from competitors.
MnDOT did. But meanwhile, it hired Bacon on a separate, no-bid, $5,000 contract to lead a retreat for managers who were planning the reorganization. Four days after the retreat ended, the department chose Bacon for a new contract worth $67,000.
The Administration Department, acting on a tip from a MnDOT source, looked into the contract. It found that:
- Weeks before the proposal was put out for bids, a MnDOT employee already had described the project in her notes as "Carolyn's Contract."
- The advertisement seeking proposals was too "sketchy" for competitors to understand, according to Pickett. She told MnDOT to fix it, but officials disregarded her directive.
- Three consultants submitted proposals. One was tossed for being 11 minutes late. Bacon's proposal, the only one without a time stamp, was accepted.
- The committee that selected Bacon included Richard Stehr, the senior engineer whose division first recruited her as a consultant, and two of his subordinates.
Auditors, regulators and even a former MnDOT manager have criticized such arrangements as a threat to the appearance of impartiality.
Administration Department regulators concluded that MnDOT had "preselected this contractor" even though it went through a competitive process. But they didn't recommend further investigation.
Kent Allin, then an assistant administration commissioner who oversaw state contracting, said there were frequent discussions in his department about the tension between contract regulators and MnDOT. "I'm trying to pick my words carefully," he said. "We were encouraged [not to] air the dirty laundry publicly or with the Legislature."
MnDOT denies committing any improprieties. Nancy Pfeiler, the staff member who described the project as "Carolyn's Contract," said she viewed it as a continuation of Bacon's work with the department.
Bacon said she didn't know why her proposal wasn't time-stamped. She defended her selection, saying she had worked for MnDOT for a long time and was familiar with the reorganization efforts. Stehr agreed: "I mean, she knew what we liked."
Competition is key, and often is avoided.
One type of arrangement criticized by both regulators and auditors is the single-source contract, in which an agency seeks to hire a contractor without competitive bids.
The law allows no-bid contracts if state employees cannot do the jobs and the selected firms are the only ones reasonably available for the work.
But Administration regulators have complained that MnDOT frequently has sought permission to handpick its consultants as much as 41 percent of the time in 2000 often with insufficient reasons.
Gerald Joyce, an Administration regulator, wrote in an internal memo that MnDOT often claimed it lacked time to advertise for competitors. But there often appeared to be enough time, he lamented, "for MnDOT to mishandle the contract and create a situation where work must begin or dire consequences will result, thus negating Admin's authority in enforcing a statute that was enacted for a very good reason, to ensure a fair contracting process that when properly utilized benefits all parties."
On several occasions, regulators said, MnDOT evaded or even broke the law by hiring contractors without competition and putting them to work without approval.
Sometimes MnDOT tries to justify its selections on grounds that it has worked with the companies before and they are familiar with the work, factors that might save money. But regulators say that those alone aren't sufficient reasons.
Even if a company originally competes for a job, the cost of a contract can grow as the agreement is amended, without competition, to add work.
The Star Tribune analyzed two MnDOT databases with nearly 2,100 consulting contracts. The analysis found 150 cases in which the value of amendments equaled or exceeded the amounts of the original contracts. Some involved relatively small deals, such as a $2,590 engineering contract that increased by $11,410. Others were much larger, such as a $750,000 materials testing contract that increased by $2.1 million.
One example involves Short Elliott Hendrickson Inc. (SEH) of St. Paul. In 1998, the department signed a three-year, $750,000 contract with SEH for road-design services. Two years into the contract, it tagged on an amendment for $750,000, citing the heavy workload.
It was among eight SEH contracts with supplements exceeding 60 percent of their original value. Taken together, the original contracts were worth $3.6 million, and the supplements added $3.3 million.
Generally speaking, state law allows agencies to amend contracts to order unexpected, related work or to deal with emergencies that involve public health and safety. MnDOT officials say they expand contracts out of necessity, generally to deal with unexpected problems or to avoid costly construction delays.
But regulators and auditors have noted that the practice can be used to skirt competitive-bidding requirements. They also say that supplements can be a sign that firms are allowed to bid low to win contracts and compensate with no-bid amendments.
Of the 2,100 contracts, nearly half had been amended. The original value of the contracts that were amended totaled $731 million; the amendments themselves totaled $422 million.
MnDOT officials said their databases were designed to track contracts, not to be used for analysis. They said they could not vouch for "the accuracy, reliability, suitability or completeness" of their data and warned that any conclusions drawn from them could be misleading or false.
However, the newspaper fixed many of the problems by clearing up inconsistencies in company names and using hard copies of contracts to fill in blanks. Spot checks afterward found relatively few errors.
A practice that can shut out competitors
Administration watchdogs say that when MnDOT chooses one contractor too often, others can't gain the experience to compete effectively.
Ed Knoyle, a software engineer from Bozeman, Mont., began telecommuting as a consultant for the agency in 1975. His contracts since 1996 have totaled $517,755. Some were awarded without competition.
When MnDOT wanted approvals for no-bid contracts with Knoyle, it typically said he had so much institutional knowledge and technical expertise that he had no peer.
MnDOT also sometimes awarded contracts for amounts just under the threshold that would have required competitive bids. It later amended the contracts, pushing total costs far above the threshold.
Joyce suggested that MnDOT may have been dodging the law in one such case involving Knoyle. In a February 1999 memo, he wrote that a Knoyle contract had started at $24,000, "conveniently below" the $25,000 bidding threshold, but that through amendments, it had nearly tripled in cost and had exceeded the original scope.
He approved the amendment that sparked his comments but said he wanted assurance, for his file, "that the original intent of this contract was never to be this large and all-encompassing. It appears that there may be even more amendments anticipated; if that's the case, I would recommend a new contract or some explanation of why no MnDOT employees can now perform these services."
Later that year, Pickett raised more questions about MnDOT's use of Knoyle. Citing a contract that had grown from $60,000 to $95,000, she said, "This is not an appropriate amendment. The new work is unrelated to the original contract and should have been a separate contract."
In summer 2001, MnDOT found a detour around some of the regulators' challenges. According to an internal memo, managers reviewed contracting rules and found that if they used a special type of contract and kept the amount under $20,000, the agency could hire Knoyle directly without competition. MnDOT officials approved a $10,000 contract for Knoyle to work on a mainframe computer and a separate $15,000 contract for him to work on a database.
Determining when a contract amendment is truly required can be difficult, said Gabriel Bodoczy, a former MnDOT official who oversaw consulting contracts for a decade before retiring in 1999. But he said that too many amendments are driven by consultants and not by the agency's needs.
Knoyle suggested that MnDOT extend one of his contracts a year ago, saying he had run out of work with two-thirds of the money remaining. An agency representative wrote back, asking whether he was looking for something to do.
Knoyle responded: "My time is less committed now. . . . Everybody just looks at each other and wonders who is supposed to be doing what. . . . What this means is that I will have more time available than I have recently, so yes, I am looking for projects if you have some in mind."
MnDOT extended the contract through June of this year.
Knoyle said his string of contracts stems from his ability to find a niche within MnDOT. He said that he follows the money, shifting to new projects as priorities change, but that MnDOT's employee turnover helps, too.
"A lot of times, I'm coming in and educating MnDOT employees how we got to where we are today, because I've been here 20 years and they've been here, you know, six months," he said. "I don't think we intended it to work out that way. It's just kind of how it turned out."
Why break the law? Speed plays a role
In its efforts to accelerate projects, MnDOT insists that it must sometimes violate statutes that prohibit contractors from starting work before money is set aside or before a contract is signed.
"It takes too damned long to get a project developed and on the ground," Tinklenberg said in an interview last spring.
The Star Tribune found dozens of examples in which the agency acknowledged breaking the law by starting work before contracts were signed or money was set aside.
In addition, Pickett complained in an internal document that MnDOT often steps around the rules when it decides it wants a particular consultant. The agency frequently asks for approval of no-bid contracts long after the work has begun, she said, even though "working without the benefit of a contract creates liability for the state."
In 1999, the agency wanted to hire Barr Engineering of Edina to draft a cleanup plan for part of the light-rail corridor. One reason it gave was that the company could produce a "scientifically and politically acceptable product the first time."
The Administration Department initially rejected MnDOT's request for a $125,000 contract, saying the agency had failed to meet criteria for avoiding competitive bidding. MnDOT eventually got permission to negotiate a contract with Barr after explaining that cleanup funds from a settlement with a previous owner were about to expire. The agency then put Barr to work without a binding contract and without dedicated money. MnDOT later acknowledged that it broke the law in doing so.
Barr did not finish the job in time to capture the cleanup funds. A MnDOT official later downplayed the failure, explaining to Administration regulators that the most important reason for moving so quickly was to avoid delays in light-rail construction.
Pickett ultimately signed the contract after much of the work was completed.
In a recent interview she said she was under intense pressure from MnDOT and was mindful that light rail was a priority for David Fisher, the administration commissioner at that time. "He directly said he was in favor of light rail and he wants to help wherever he can to get this thing on the tracks," she said. ". . . You can't fight every battle. You can only push so hard."
MnDOT says it takes risks that are legitimate
Starting work without final approvals can create liability for the state, say auditors and the state attorney general's office. Tinklenberg has said the agency weighs that against the threat of incurring financial penalties for delays or compromising public safety.
In an internal memo that itemized its quarrels with Administration watchdogs, MnDOT said it does not make it common practice to violate contracting laws. "However we realize that there are high priority projects for which we must take the risk and start work to meet delivery deadlines. . . . When long established supplier relationships are in place, we trust consultants to start projects for us."
Ron Gipp, MnDOT's chief auditor, called that "extraordinarily risky" for the state in a review of MnDOT's building contracts that was conducted jointly with Administration. Without a contract between the state and its consultant, the audit says, "neither party is bound to fulfilling any contractual obligation." And if disputes surface, "an increased risk of litigation may result."
MnDOT considered the risk low. It said in one internal document that if the number of violations is rising, "it may indicate that laws and policies need to change", not contracting practices.
Not everyone at MnDOT thinks it has come to that.
Bruce Biser, assistant director of management operations, said the agency hasn't tried hard enough to live within the law. "We just blow it off, and that's not my style," he said. "We need to put emphasis on dotting our I's, crossing our T's, in a timely fashion."
He added that if the regular contracting process jeopardizes the department's basic mission, then changes in the law should be considered. "But you've got to give it your best effort, and we haven't done that," he said.
Pawlenty said his administration will review the contracting rules and procedures to see whether they make sense, "because one of the things we're going to do at MnDOT is . . . ask them to try to deliver projects more effectively, more efficiently and quicker. . . . Once we're convinced that the rules are appropriate, we've got to follow them."
An aborted project in Arden Hills illustrates the risk of taking shortcuts. MnDOT was planning to help redevelop the abandoned Army Ammunition Plant there, working with the city, the National Guard and Ramsey County.
Two years ago, a MnDOT project manager broke the law by telling Short Elliott Hendrickson to start design work on the project even though the $60,000 contract wasn't signed. The firm finished the job, but the city pulled out of the arrangement.
Here's how MnDOT explained the situation in a memo to Administration:
"In a nut shell, Mn/DOT was going to participate in this project, the vendor started work and as the contract progressed, partners changed their minds on participation. Mn/DOT backed out of the project and now we have this contract to cover the work that was done that we agreed to fund, prior to our backing out. Messy."
E-mail:
"MnDOT chooses to portray its 'business decisions' as reasons for doing things differently than the law requires, and claims sole authority for making those business decisions. Unfortunately, that is not how the law is written. We do not serve the public good by acting as MnDOT's shill in a game to play quick and loose with the law so that MnDOT can have its way. I missed somewhere the constitutional or statutory connection between 'what MnDOT wants' and the public good."
Paul Stembler, a contract watchdog for the Minnesota Department of Administration, to his colleagues in 1999.
Memo:
"It appears that Mn/DOT is giving a great deal of this type of work just to Ms. Bacon, especially when there are other people, as well as state employees, who could perform this work."
Heather Pickett, a contract watchdog for the state Department of Administration, to MnDOT in 2001.
E-mail:
"My time is less committed now. ... What this means
is that I will have more time available than I have recently, so yes, I am looking for projects if you have some in mind."
Ed Knoyle, a longtime consultant, writing to MnDOT in 2002.
A former MnDOT official said that consultants, not agency staff members, too often drive the contract process.
.
ABOUT MnDOT
Established: In its current form, 1976. Versions of the department date to 1905.
Purpose: "To develop and implement policies, plans and programs for highways, railroads, commercial waterways, aeronautics, public transit and motor carriers."
Scope: In terms of miles, Minnesota's state highway system is the 19th-largest in the United States.
Budget: $4.6 billion for 2002 and 2003. The gas tax, motor-vehicle registration fees and federal aid provide most of its revenue. The construction and maintenance of roads and bridges account for most of its spending.
Employees: About 5,300.
Leadership: Gov. Pawlenty has selected Lt. Gov. Carol Molnau to double as as transportation commissioner.
MnDOT is state' leading user of consultants
Consultants who provide what the government calls professional and technical services are a growing force. According to the Minnesota Department of Finance, they have received $2.2 billion in state money since 1996, an average of $303 million a year. Among state agencies, the Minnesota Department of Transportation spends the most on such consultants. The top 10:
.
Average annual spending on
consultants in millions, Percent
Agency 1996-2002 of total
Transportation $49.6 26.4%
Investment Board 38.1 12.6
State colleges/
universities 34.3 11.3
Human services 33.7 11.1
Corrections 19.9 6.6
Administration 13.3 4.4
Pollution Control 12.3 4.1
Children, Families
and Learning 8.7 2.9
Health 7.9 2.6
Revenue 7.6 2.5
Dollar amounts not
adjusted for inflation
Agency's use of consultants has doubled
All state agencies
In millions of dollars
(See microfilm for chart.)
MnDOT
In millions of dollars
(See microfilm for chart.)
Source: Department of Finance
.
Playing favorites
After Allen Paulson retired from MnDOT in 1994, he won a string of consulting contracts.
A MnDOT official wanted to extend one of them in 1997 but was told it would require a competitive process. He responded, "I only want to hire Al Paulson," and told a subordinate to make sure the office that solicited proposals understood that.
One agency employee took offense. "Is this incriminating or what?" she wrote in a note on the file.
Paulson won the competition. He said in an interview that he was unaware of the memos.
"I suppose it looks a little bit like a smoking gun," he said. "But I suppose you could also say, well, that's good management to hire the most qualified person . . . and let's not play games and invite a lot of unqualified people to submit applications."
He said his MnDOT experience gives him an edge. "I'd like to think that I'm more efficient than anybody they could get, and perhaps they think that, too," he said.
Legal issues at core of conflicts
The Minnesota Department of Transportation has fought frequently with contract regulators over these three aspects of state law.
No-bid contracts: Except in emergencies, agencies must seek competition for most contracts unless "there is clearly and legitimately only a single source for the goods and services and the commissioner determines that the price has been fairly and reasonably established." (Minnesota statute 16C.10)
Jumping the gun: No payments may lawfully be made to a contractor unless the money has been "encumbered," or reserved. Minnesota law says, "An employee authorizing or making the payment, or taking part in it, and a person receiving any part of the payment, are jointly and severally liable to the state for the amount paid or received." An employee who knowingly violates this law may be fired. (16A.15)
Working without a contract: A contract is not valid and the state is not bound by it unless it has been signed by the company, the department entering the contract, the Department of Administration and the attorney general's office. (16C.05)
E-mail:
"Mn/DOT chose to put me in a situation where I can choose to violate the law, or stop work that has already begun. This is not a choice I can make for you."
_ Paul Stembler, a contract regulator, to his boss in 2001. He was being asked to sign a contract for work that began without approval.
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INSIDE MnDOT
THE AUDIT TRAIL
Over the years, reviews of the contracting practices of the Minnesota Department of Transportation have identified consistent themes: ethical issues and a lack of competition and oversight.
.
1994
A joint review by MnDOT and the Federal Highway Administration found that:
- Some employees involved in selecting consultants and administering contracts sought or gained work with consultants for themselves, relatives and friends. Other employees believed that former colleagues who went to work for consultants used their connections to MnDOT to gain access and lobby for their firms.
- Consultants were used instead of staff members without a clear explanation for the decisions.
- Contract modifications were seldom rejected and were authorized without documentation of whether they were "clearly cost beneficial _ not payment for inefficiencies, overruns or unnecessary work." This was particularly true for modifications "responding to political or public requests."
1998
A MnDOT and Administration Department audit of the MnDOT's building construction program found that:
- Some contractors were given permission to proceed with work beyond the scope of their original contracts before agreements on the new work were formalized.
- More than half of the contracts reviewed lacked sufficient insurance coverage to protect the state in the event of a loss.
2000
An audit prompted by the Hiawatha light-rail project and commissioned by the Federal Transit Administration found that:
- Work went beyond the terms of existing contracts and was authorized before contracts were finalized, and there were ongoing problems with contractors who were failing to comply with federal prevailing wage requirements.
2001
A review commissioned by the Department of Administration and MnDOT following federal criticism of the light-rail management contract found that:
- Several MnDOT employees said it was "not uncommon" for work on consulting and construction projects to begin before they were fully approved, and that in some cases "backsheet adjustments" were made to contractors for their early work. "The issue has been a recurring one," the report noted.
- At least four consultants "appeared to benefit regularly from sole-source consideration."
2002
An internal MnDOT audit on the use of federal money found that:
- On two projects the agency used "backsheet adjustments" to pay for supplemental work that had been started before contracts were in place. The audit noted that audits for fiscal years 1998 through 2000 had found the same.
On a radio program last summer, Elwyn Tinklenberg, then MnDOT's leader, criticized the Star Tribune's investigation of the agency, saying that "it's all about issues that have already been covered in previous audits. And the audit reports continue to come back: MnDOT had not done anything wrong in its contracting. And as a matter of fact, its contracting procedures are reasonable and appropriate."
PUT THAT PERSON ON THE PAYROLL
Some consultants have become so familiar with MnDOT that concerns were raised about whether they might be construed as agency personnel.
One is Darlene Gorrill. MnDOT records show that since 1997 she has patched together mostly small technical writing contracts worth at least $219,000. That prompted the state Administration Department to warn that if the Internal Revenue Service looked into the matter, it might conclude she was an employee.
Other consultants were employees, which is against the law. For six years in the 1990s, the agency contracted with five of its employees to kill beavers in northwestern Minnesota. A MnDOT accounting technician wanted a reason to end the arrangement. Replied an Administration Department regulator: "Violation of state law and conflict of interest are as good [of] places to start as any."
MnDOT then stopped the practice.
HIRE HIM, OR HIRE NO ONE
In 1998, outgoing MnDOT Commissioner James Denn decided he needed former Democratic U.S. Rep. Tim Penny to coordinate a group of freight shippers advising the agency on policy and investment decisions. Penny was affiliated with the public-relations firm Himle Horner Inc., which got the no-bid, two-year, $32,000 contract. It called for Penny to organize eight meetings.
Apparently, Penny was more important than the job itself. MnDOT wrote in the contract that if it couldn't get him, the contract would be terminated. MnDOT later renewed the contract, saying it wanted Penny in part because he was a "political insider."
NO APPROVAL? START ANYWAY
Audits and contract watchdogs have faulted MnDOT for telling consultants to begin work before all the pieces were in place.
For example, in July 2001, former MnDOT employee Billie Branden got a $53,500 deal to administer drug tests. The agency told her to start before the contract was approved and without setting aside money to cover it.
Its reason? "Funds were not available because of [the] legislature's indecision."
ABOUT THIS SERIES
Star Tribune reporters reviewed hundreds of individual contracts and thousands of government documents, including e-mails, memos and other correspondence, provided under the Minnesota Data Practices Act. They also analyzed two Department of Transportation databases documenting more than 2,000 consulting contracts and interviewed dozens of officials from various state offices and the Legislature, as well as private contractors, lobbyists and others.
Star Tribune (Minneapolis, MN)
January 19, 2003, Sunday, Metro Edition
INSIDE MnDOT; MnDOT swerves around the law; Agency flouted rules on consultants
Dan Browning; Pat Doyle; Staff Writers
When the Minnesota Department of Transportation lost a $17-an-hour employee, it quickly hired her as a $100-an-hour consultant and gave her a string of contracts, despite repeated warnings from regulators that others should have been considered for the work.
When MnDOT was in a hurry to clean up a site that was to become a maintenance yard for the state's first light-rail line, it put an engineering firm to work without having a binding contract or money in place admittedly violating state law.
Under pressure to build roads and rail, MnDOT increasingly has turned to outside consultants, paying them nearly $60 million last year. Laws and regulations exist to ensure that consulting contracts are reached fairly and competitively and that tax dollars are spent prudently. But the Star Tribune has found that MnDOT the third-biggest spender among state agencies, has played by its own rules.
A review of tens of thousands of government e-mails, memos and other documents shows that MnDOT often has avoided competition when awarding consulting contracts, has doubled or even tripled payments without bids and has broken laws by putting consultants to work before deals were approved or even funded.
Behind the scenes, state regulators have criticized such practices for years, describing the agency as a bully running roughshod over efforts to ensure fair contracting. Auditors, too, have criticized the way MnDOT handles consultants.
Even so, Elwyn Tinklenberg, who led MnDOT for nearly four years before resigning in October, has called the agency's procedures "reasonable and appropriate." During a radio appearance in August, he praised the agency's 5,300 employees, "who are working like crazy to do the best job they can with limited resources to protect the mobility of Minnesota."
But as a new administration settles in, the agency will probably face tougher scrutiny. Gov. Tim Pawlenty said the newspaper's findings raise questions about whether agency officials have been too close to some consultants, and he called some of MnDOT's spending decisions outrageous.
Pawlenty named Lt. Gov. Carol Molnau to double as the agency's new commissioner. As a legislator, Molnau accused MnDOT of misrepresenting costs for the Hiawatha Avenue light-rail line and resisting scrutiny. During last year's campaign, she promised "major reforms."
In a recent interview, she said that employees already are suggesting improvements. "Our goal is accountability," she said. "So when we have contract issues, they will be done according to the standards."
Unlike typical construction work or purchases, consulting jobs need not go to the lowest bidder, agencies may consider a variety of subjective factors. But last week, the legislative auditor reported that six state agencies it surveyed, including MnDOT, broke laws or ignored sound management practices when hiring consultants.
The Department of Administration has the authority to approve or reject most state contracts. Regulators there have said that MnDOT gives them the most trouble; many of their complaints are evident in internal documents.
According to the Minnesota Department of Finance, the state spent $2.2 billion on professional or technical consultants from 1996 through late 2002, an average of about $303 million a year. MnDOT was the biggest spender, accounting for 16 percent of the total.
Some of that money has gone to large companies. Some has gone to individuals. In both situations, regulators have questioned whether it was distributed fairly or in ways that produce a good value for taxpayers.
One contract leads to another
One of those cases involved Carolyn Bacon.
MnDOT managers liked Bacon, who worked for them as an employee-development specialist in the early 1990s. About five months after leaving that $17.25-an-hour job in 1993, she returned part time as a $100-an-hour consultant, running meetings, planning retreats and reorganizing staff. She has received contracts worth $266,270, MnDOT records show.
Minnesota law forbids the hiring of consultants for jobs exceeding $5,000 if state employees are available. In addition, even small contracts are supposed to go through an informal bidding process. Heather Pickett, a contract watchdog for the Minnesota Department of Administration, questioned Bacon's contracts in 2000.
"It appears that Mn/DOT is giving a great deal of this type of work just to Ms. Bacon, especially when there are other people, as well as state employees, who could perform this work. Fair and open competition is the goal when selecting contractors," she wrote in a memo to the agency.
Pickett, a lawyer and former MnDOT employee herself, wrote that in the future, MnDOT would need to explain why it chose Bacon and whether competitors were sought.
Soon after, a $66,100 contract of Bacon's was due to expire. The agency wanted her to continue working so she could help in a staff reorganization. Pickett said she told the department to seek proposals from competitors.
MnDOT did. But meanwhile, it hired Bacon on a separate, no-bid, $5,000 contract to lead a retreat for managers who were planning the reorganization. Four days after the retreat ended, the department chose Bacon for a new contract worth $67,000.
The Administration Department, acting on a tip from a MnDOT source, looked into the contract. It found that:
- Weeks before the proposal was put out for bids, a MnDOT employee already had described the project in her notes as "Carolyn's Contract."
- The advertisement seeking proposals was too "sketchy" for competitors to understand, according to Pickett. She told MnDOT to fix it, but officials disregarded her directive.
- Three consultants submitted proposals. One was tossed for being 11 minutes late. Bacon's proposal, the only one without a time stamp, was accepted.
- The committee that selected Bacon included Richard Stehr, the senior engineer whose division first recruited her as a consultant, and two of his subordinates.
Auditors, regulators and even a former MnDOT manager have criticized such arrangements as a threat to the appearance of impartiality.
Administration Department regulators concluded that MnDOT had "preselected this contractor" even though it went through a competitive process. But they didn't recommend further investigation.
Kent Allin, then an assistant administration commissioner who oversaw state contracting, said there were frequent discussions in his department about the tension between contract regulators and MnDOT. "I'm trying to pick my words carefully," he said. "We were encouraged [not to] air the dirty laundry publicly or with the Legislature."
MnDOT denies committing any improprieties. Nancy Pfeiler, the staff member who described the project as "Carolyn's Contract," said she viewed it as a continuation of Bacon's work with the department.
Bacon said she didn't know why her proposal wasn't time-stamped. She defended her selection, saying she had worked for MnDOT for a long time and was familiar with the reorganization efforts. Stehr agreed: "I mean, she knew what we liked."
Competition is key, and often is avoided.
One type of arrangement criticized by both regulators and auditors is the single-source contract, in which an agency seeks to hire a contractor without competitive bids.
The law allows no-bid contracts if state employees cannot do the jobs and the selected firms are the only ones reasonably available for the work.
But Administration regulators have complained that MnDOT frequently has sought permission to handpick its consultants as much as 41 percent of the time in 2000 often with insufficient reasons.
Gerald Joyce, an Administration regulator, wrote in an internal memo that MnDOT often claimed it lacked time to advertise for competitors. But there often appeared to be enough time, he lamented, "for MnDOT to mishandle the contract and create a situation where work must begin or dire consequences will result, thus negating Admin's authority in enforcing a statute that was enacted for a very good reason, to ensure a fair contracting process that when properly utilized benefits all parties."
On several occasions, regulators said, MnDOT evaded or even broke the law by hiring contractors without competition and putting them to work without approval.
Sometimes MnDOT tries to justify its selections on grounds that it has worked with the companies before and they are familiar with the work, factors that might save money. But regulators say that those alone aren't sufficient reasons.
Even if a company originally competes for a job, the cost of a contract can grow as the agreement is amended, without competition, to add work.
The Star Tribune analyzed two MnDOT databases with nearly 2,100 consulting contracts. The analysis found 150 cases in which the value of amendments equaled or exceeded the amounts of the original contracts. Some involved relatively small deals, such as a $2,590 engineering contract that increased by $11,410. Others were much larger, such as a $750,000 materials testing contract that increased by $2.1 million.
One example involves Short Elliott Hendrickson Inc. (SEH) of St. Paul. In 1998, the department signed a three-year, $750,000 contract with SEH for road-design services. Two years into the contract, it tagged on an amendment for $750,000, citing the heavy workload.
It was among eight SEH contracts with supplements exceeding 60 percent of their original value. Taken together, the original contracts were worth $3.6 million, and the supplements added $3.3 million.
Generally speaking, state law allows agencies to amend contracts to order unexpected, related work or to deal with emergencies that involve public health and safety. MnDOT officials say they expand contracts out of necessity, generally to deal with unexpected problems or to avoid costly construction delays.
But regulators and auditors have noted that the practice can be used to skirt competitive-bidding requirements. They also say that supplements can be a sign that firms are allowed to bid low to win contracts and compensate with no-bid amendments.
Of the 2,100 contracts, nearly half had been amended. The original value of the contracts that were amended totaled $731 million; the amendments themselves totaled $422 million.
MnDOT officials said their databases were designed to track contracts, not to be used for analysis. They said they could not vouch for "the accuracy, reliability, suitability or completeness" of their data and warned that any conclusions drawn from them could be misleading or false.
However, the newspaper fixed many of the problems by clearing up inconsistencies in company names and using hard copies of contracts to fill in blanks. Spot checks afterward found relatively few errors.
A practice that can shut out competitors
Administration watchdogs say that when MnDOT chooses one contractor too often, others can't gain the experience to compete effectively.
Ed Knoyle, a software engineer from Bozeman, Mont., began telecommuting as a consultant for the agency in 1975. His contracts since 1996 have totaled $517,755. Some were awarded without competition.
When MnDOT wanted approvals for no-bid contracts with Knoyle, it typically said he had so much institutional knowledge and technical expertise that he had no peer.
MnDOT also sometimes awarded contracts for amounts just under the threshold that would have required competitive bids. It later amended the contracts, pushing total costs far above the threshold.
Joyce suggested that MnDOT may have been dodging the law in one such case involving Knoyle. In a February 1999 memo, he wrote that a Knoyle contract had started at $24,000, "conveniently below" the $25,000 bidding threshold, but that through amendments, it had nearly tripled in cost and had exceeded the original scope.
He approved the amendment that sparked his comments but said he wanted assurance, for his file, "that the original intent of this contract was never to be this large and all-encompassing. It appears that there may be even more amendments anticipated; if that's the case, I would recommend a new contract or some explanation of why no MnDOT employees can now perform these services."
Later that year, Pickett raised more questions about MnDOT's use of Knoyle. Citing a contract that had grown from $60,000 to $95,000, she said, "This is not an appropriate amendment. The new work is unrelated to the original contract and should have been a separate contract."
In summer 2001, MnDOT found a detour around some of the regulators' challenges. According to an internal memo, managers reviewed contracting rules and found that if they used a special type of contract and kept the amount under $20,000, the agency could hire Knoyle directly without competition. MnDOT officials approved a $10,000 contract for Knoyle to work on a mainframe computer and a separate $15,000 contract for him to work on a database.
Determining when a contract amendment is truly required can be difficult, said Gabriel Bodoczy, a former MnDOT official who oversaw consulting contracts for a decade before retiring in 1999. But he said that too many amendments are driven by consultants and not by the agency's needs.
Knoyle suggested that MnDOT extend one of his contracts a year ago, saying he had run out of work with two-thirds of the money remaining. An agency representative wrote back, asking whether he was looking for something to do.
Knoyle responded: "My time is less committed now. . . . Everybody just looks at each other and wonders who is supposed to be doing what. . . . What this means is that I will have more time available than I have recently, so yes, I am looking for projects if you have some in mind."
MnDOT extended the contract through June of this year.
Knoyle said his string of contracts stems from his ability to find a niche within MnDOT. He said that he follows the money, shifting to new projects as priorities change, but that MnDOT's employee turnover helps, too.
"A lot of times, I'm coming in and educating MnDOT employees how we got to where we are today, because I've been here 20 years and they've been here, you know, six months," he said. "I don't think we intended it to work out that way. It's just kind of how it turned out."
Why break the law? Speed plays a role
In its efforts to accelerate projects, MnDOT insists that it must sometimes violate statutes that prohibit contractors from starting work before money is set aside or before a contract is signed.
"It takes too damned long to get a project developed and on the ground," Tinklenberg said in an interview last spring.
The Star Tribune found dozens of examples in which the agency acknowledged breaking the law by starting work before contracts were signed or money was set aside.
In addition, Pickett complained in an internal document that MnDOT often steps around the rules when it decides it wants a particular consultant. The agency frequently asks for approval of no-bid contracts long after the work has begun, she said, even though "working without the benefit of a contract creates liability for the state."
In 1999, the agency wanted to hire Barr Engineering of Edina to draft a cleanup plan for part of the light-rail corridor. One reason it gave was that the company could produce a "scientifically and politically acceptable product the first time."
The Administration Department initially rejected MnDOT's request for a $125,000 contract, saying the agency had failed to meet criteria for avoiding competitive bidding. MnDOT eventually got permission to negotiate a contract with Barr after explaining that cleanup funds from a settlement with a previous owner were about to expire. The agency then put Barr to work without a binding contract and without dedicated money. MnDOT later acknowledged that it broke the law in doing so.
Barr did not finish the job in time to capture the cleanup funds. A MnDOT official later downplayed the failure, explaining to Administration regulators that the most important reason for moving so quickly was to avoid delays in light-rail construction.
Pickett ultimately signed the contract after much of the work was completed.
In a recent interview she said she was under intense pressure from MnDOT and was mindful that light rail was a priority for David Fisher, the administration commissioner at that time. "He directly said he was in favor of light rail and he wants to help wherever he can to get this thing on the tracks," she said. ". . . You can't fight every battle. You can only push so hard."
MnDOT says it takes risks that are legitimate
Starting work without final approvals can create liability for the state, say auditors and the state attorney general's office. Tinklenberg has said the agency weighs that against the threat of incurring financial penalties for delays or compromising public safety.
In an internal memo that itemized its quarrels with Administration watchdogs, MnDOT said it does not make it common practice to violate contracting laws. "However we realize that there are high priority projects for which we must take the risk and start work to meet delivery deadlines. . . . When long established supplier relationships are in place, we trust consultants to start projects for us."
Ron Gipp, MnDOT's chief auditor, called that "extraordinarily risky" for the state in a review of MnDOT's building contracts that was conducted jointly with Administration. Without a contract between the state and its consultant, the audit says, "neither party is bound to fulfilling any contractual obligation." And if disputes surface, "an increased risk of litigation may result."
MnDOT considered the risk low. It said in one internal document that if the number of violations is rising, "it may indicate that laws and policies need to change", not contracting practices.
Not everyone at MnDOT thinks it has come to that.
Bruce Biser, assistant director of management operations, said the agency hasn't tried hard enough to live within the law. "We just blow it off, and that's not my style," he said. "We need to put emphasis on dotting our I's, crossing our T's, in a timely fashion."
He added that if the regular contracting process jeopardizes the department's basic mission, then changes in the law should be considered. "But you've got to give it your best effort, and we haven't done that," he said.
Pawlenty said his administration will review the contracting rules and procedures to see whether they make sense, "because one of the things we're going to do at MnDOT is . . . ask them to try to deliver projects more effectively, more efficiently and quicker. . . . Once we're convinced that the rules are appropriate, we've got to follow them."
An aborted project in Arden Hills illustrates the risk of taking shortcuts. MnDOT was planning to help redevelop the abandoned Army Ammunition Plant there, working with the city, the National Guard and Ramsey County.
Two years ago, a MnDOT project manager broke the law by telling Short Elliott Hendrickson to start design work on the project even though the $60,000 contract wasn't signed. The firm finished the job, but the city pulled out of the arrangement.
Here's how MnDOT explained the situation in a memo to Administration:
"In a nut shell, Mn/DOT was going to participate in this project, the vendor started work and as the contract progressed, partners changed their minds on participation. Mn/DOT backed out of the project and now we have this contract to cover the work that was done that we agreed to fund, prior to our backing out. Messy."
E-mail:
"MnDOT chooses to portray its 'business decisions' as reasons for doing things differently than the law requires, and claims sole authority for making those business decisions. Unfortunately, that is not how the law is written. We do not serve the public good by acting as MnDOT's shill in a game to play quick and loose with the law so that MnDOT can have its way. I missed somewhere the constitutional or statutory connection between 'what MnDOT wants' and the public good."
Paul Stembler, a contract watchdog for the Minnesota Department of Administration, to his colleagues in 1999.
Memo:
"It appears that Mn/DOT is giving a great deal of this type of work just to Ms. Bacon, especially when there are other people, as well as state employees, who could perform this work."
Heather Pickett, a contract watchdog for the state Department of Administration, to MnDOT in 2001.
E-mail:
"My time is less committed now. ... What this means
is that I will have more time available than I have recently, so yes, I am looking for projects if you have some in mind."
Ed Knoyle, a longtime consultant, writing to MnDOT in 2002.
A former MnDOT official said that consultants, not agency staff members, too often drive the contract process.
.
ABOUT MnDOT
Established: In its current form, 1976. Versions of the department date to 1905.
Purpose: "To develop and implement policies, plans and programs for highways, railroads, commercial waterways, aeronautics, public transit and motor carriers."
Scope: In terms of miles, Minnesota's state highway system is the 19th-largest in the United States.
Budget: $4.6 billion for 2002 and 2003. The gas tax, motor-vehicle registration fees and federal aid provide most of its revenue. The construction and maintenance of roads and bridges account for most of its spending.
Employees: About 5,300.
Leadership: Gov. Pawlenty has selected Lt. Gov. Carol Molnau to double as as transportation commissioner.
MnDOT is state' leading user of consultants
Consultants who provide what the government calls professional and technical services are a growing force. According to the Minnesota Department of Finance, they have received $2.2 billion in state money since 1996, an average of $303 million a year. Among state agencies, the Minnesota Department of Transportation spends the most on such consultants. The top 10:
.
Average annual spending on
consultants in millions, Percent
Agency 1996-2002 of total
Transportation $49.6 26.4%
Investment Board 38.1 12.6
State colleges/
universities 34.3 11.3
Human services 33.7 11.1
Corrections 19.9 6.6
Administration 13.3 4.4
Pollution Control 12.3 4.1
Children, Families
and Learning 8.7 2.9
Health 7.9 2.6
Revenue 7.6 2.5
Dollar amounts not
adjusted for inflation
Agency's use of consultants has doubled
All state agencies
In millions of dollars
(See microfilm for chart.)
MnDOT
In millions of dollars
(See microfilm for chart.)
Source: Department of Finance
.
Playing favorites
After Allen Paulson retired from MnDOT in 1994, he won a string of consulting contracts.
A MnDOT official wanted to extend one of them in 1997 but was told it would require a competitive process. He responded, "I only want to hire Al Paulson," and told a subordinate to make sure the office that solicited proposals understood that.
One agency employee took offense. "Is this incriminating or what?" she wrote in a note on the file.
Paulson won the competition. He said in an interview that he was unaware of the memos.
"I suppose it looks a little bit like a smoking gun," he said. "But I suppose you could also say, well, that's good management to hire the most qualified person . . . and let's not play games and invite a lot of unqualified people to submit applications."
He said his MnDOT experience gives him an edge. "I'd like to think that I'm more efficient than anybody they could get, and perhaps they think that, too," he said.
Legal issues at core of conflicts
The Minnesota Department of Transportation has fought frequently with contract regulators over these three aspects of state law.
No-bid contracts: Except in emergencies, agencies must seek competition for most contracts unless "there is clearly and legitimately only a single source for the goods and services and the commissioner determines that the price has been fairly and reasonably established." (Minnesota statute 16C.10)
Jumping the gun: No payments may lawfully be made to a contractor unless the money has been "encumbered," or reserved. Minnesota law says, "An employee authorizing or making the payment, or taking part in it, and a person receiving any part of the payment, are jointly and severally liable to the state for the amount paid or received." An employee who knowingly violates this law may be fired. (16A.15)
Working without a contract: A contract is not valid and the state is not bound by it unless it has been signed by the company, the department entering the contract, the Department of Administration and the attorney general's office. (16C.05)
E-mail:
"Mn/DOT chose to put me in a situation where I can choose to violate the law, or stop work that has already begun. This is not a choice I can make for you."
_ Paul Stembler, a contract regulator, to his boss in 2001. He was being asked to sign a contract for work that began without approval.
.
INSIDE MnDOT
THE AUDIT TRAIL
Over the years, reviews of the contracting practices of the Minnesota Department of Transportation have identified consistent themes: ethical issues and a lack of competition and oversight.
.
1994
A joint review by MnDOT and the Federal Highway Administration found that:
- Some employees involved in selecting consultants and administering contracts sought or gained work with consultants for themselves, relatives and friends. Other employees believed that former colleagues who went to work for consultants used their connections to MnDOT to gain access and lobby for their firms.
- Consultants were used instead of staff members without a clear explanation for the decisions.
- Contract modifications were seldom rejected and were authorized without documentation of whether they were "clearly cost beneficial _ not payment for inefficiencies, overruns or unnecessary work." This was particularly true for modifications "responding to political or public requests."
1998
A MnDOT and Administration Department audit of the MnDOT's building construction program found that:
- Some contractors were given permission to proceed with work beyond the scope of their original contracts before agreements on the new work were formalized.
- More than half of the contracts reviewed lacked sufficient insurance coverage to protect the state in the event of a loss.
2000
An audit prompted by the Hiawatha light-rail project and commissioned by the Federal Transit Administration found that:
- Work went beyond the terms of existing contracts and was authorized before contracts were finalized, and there were ongoing problems with contractors who were failing to comply with federal prevailing wage requirements.
2001
A review commissioned by the Department of Administration and MnDOT following federal criticism of the light-rail management contract found that:
- Several MnDOT employees said it was "not uncommon" for work on consulting and construction projects to begin before they were fully approved, and that in some cases "backsheet adjustments" were made to contractors for their early work. "The issue has been a recurring one," the report noted.
- At least four consultants "appeared to benefit regularly from sole-source consideration."
2002
An internal MnDOT audit on the use of federal money found that:
- On two projects the agency used "backsheet adjustments" to pay for supplemental work that had been started before contracts were in place. The audit noted that audits for fiscal years 1998 through 2000 had found the same.
On a radio program last summer, Elwyn Tinklenberg, then MnDOT's leader, criticized the Star Tribune's investigation of the agency, saying that "it's all about issues that have already been covered in previous audits. And the audit reports continue to come back: MnDOT had not done anything wrong in its contracting. And as a matter of fact, its contracting procedures are reasonable and appropriate."
PUT THAT PERSON ON THE PAYROLL
Some consultants have become so familiar with MnDOT that concerns were raised about whether they might be construed as agency personnel.
One is Darlene Gorrill. MnDOT records show that since 1997 she has patched together mostly small technical writing contracts worth at least $219,000. That prompted the state Administration Department to warn that if the Internal Revenue Service looked into the matter, it might conclude she was an employee.
Other consultants were employees, which is against the law. For six years in the 1990s, the agency contracted with five of its employees to kill beavers in northwestern Minnesota. A MnDOT accounting technician wanted a reason to end the arrangement. Replied an Administration Department regulator: "Violation of state law and conflict of interest are as good [of] places to start as any."
MnDOT then stopped the practice.
HIRE HIM, OR HIRE NO ONE
In 1998, outgoing MnDOT Commissioner James Denn decided he needed former Democratic U.S. Rep. Tim Penny to coordinate a group of freight shippers advising the agency on policy and investment decisions. Penny was affiliated with the public-relations firm Himle Horner Inc., which got the no-bid, two-year, $32,000 contract. It called for Penny to organize eight meetings.
Apparently, Penny was more important than the job itself. MnDOT wrote in the contract that if it couldn't get him, the contract would be terminated. MnDOT later renewed the contract, saying it wanted Penny in part because he was a "political insider."
NO APPROVAL? START ANYWAY
Audits and contract watchdogs have faulted MnDOT for telling consultants to begin work before all the pieces were in place.
For example, in July 2001, former MnDOT employee Billie Branden got a $53,500 deal to administer drug tests. The agency told her to start before the contract was approved and without setting aside money to cover it.
Its reason? "Funds were not available because of [the] legislature's indecision."
ABOUT THIS SERIES
Star Tribune reporters reviewed hundreds of individual contracts and thousands of government documents, including e-mails, memos and other correspondence, provided under the Minnesota Data Practices Act. They also analyzed two Department of Transportation databases documenting more than 2,000 consulting contracts and interviewed dozens of officials from various state offices and the Legislature, as well as private contractors, lobbyists and others.
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