Panel: Mayor’s aid’s cut of nonprofit’s city contracts violated ethics rules

A former aide to Mayor Steve Adler violated four sections of city code by quietly taking payments from a nonprofit receiving city contracts, the Austin Ethics Review Commission declared Wednesday night.

The commission's vote came a year and a half after an American-Statesman investigation into conflicts of interest between the aide, Frank Rodriguez, and the nonprofit, Latino HealthCare Forum, which he founded. Statesman stories prompted the city to undertake an external investigation, which found that after Rodriguez joined Adler's staff, he continued to write himself checks from the nonprofit -- including payments designated as percentages of city contracts.

Records show Rodriguez received $17,235 in 2015 and $19,875 in 2016 in consulting payments from Latino HealthCare Forum. He resigned from Adler's office in 2017.

Adler and his recent chiefs of staff testified to the commission that they had no idea Rodriguez was taking payments from the group, though they knew that his wife worked there. Rodriguez said the payments were for past work and denied he had any influence over who was awarded city contracts.

PREVIOUS: Report: Mayor's aide received cut of nonprofit's contracts with city

Rodriguez's job with the city involved serving as a liaison to community groups including Latino HealthCare Forum, which helped enroll low-income people in Obamacare. Investigators presented emails showing Rodriguez raising concerns to Adler about the forum receiving "disparate treatment" compared to a competitor and helping edit documents related to the group's city contracts.

Ross Fischer, an attorney city auditors hired to lead the independent investigation, said Rodriguez used his position on Adler's staff to secure contract extensions for Latino HealthCare Forum. The group was financially dependent on city contracts and in danger of losing them because another organization was able to enroll more people with less funding, Fischer said.

Those "were all reasons the Forum needed a friend inside City Hall," he said.

Attorney Fred Lewis, who was representing Rodriguez, called the allegations "a lot of smoke" and "much ado about nothing." Many of the payments fell outside the commission's statute of limitations.

Ultimately, the commission voted 6-1, with three members absent, to find that Rodriguez violated portions of city code barring city employees from transacting business with entities where they have a substantial interest and requiring disclosure of conflicts, among others. They agreed unanimously to issue Rodriguez a letter of admonition -- more serious than a notice of violation, but less serious than a letter of reprimand -- indicating that the violations were minor or unintentional.

Adler told the commission he didn't know anything about the payments and couldn't speak to whether they violated the law.

"I don't know whether Frank received money associated with any city contract, but the advocacy he was doing in my office involved assuring children and families were insured," Adler told the commission. If he'd known about the payments, he said he "probably would have asked questions."

Adler declined to comment further on Rodriguez's actions before the commission had issued a determination and did not immediately return a text message after they did so late Wednesday night.

BACKGROUND: Adler aide's nonprofit benefited from lax oversight on city contracts

Adler Chief of Staff Lesley Varghese called the original Statesman stories, which ran in October 2017, "bad optics." She met with Rodriguez then about potential conflicts of interest involving the nonprofit, but didn't realize he himself had still been on its payroll.

Investigators said Rodriguez deleted "key emails" that the Statesman had obtained through a public information request before the independent investigation.

Lewis argued that Rodriguez's emails that appeared to advocate on behalf of Latino HealthCare Forum really just "relayed his notes" about how the organization felt. One email specifically said "I'm staying out of this" with regards to a dispute between the group and a competitor.

But investigators argued that the emails showed Rodriguez was deeply involved in the process on every side.

When Rodriguez testified to the commission, he asked investigators to close a PowerPoint presentation of their claims that was projected on a screen behind him. He said he never believed he'd done anything wrong and said Adler's office should have had better ethics training.

"It's kind of an emotional thing for someone to suggest I was selling myself for $17,000 in consulting fees," he said.

Commissioners praised some of Rodriguez's work, but questioned why he didn't disclose the payments.

"Codes of ethics are about any impropriety or appearance of impropriety," Commissioner Tray Gober said. "When you sat down and instantly asked for documents to be taken down, because of what it looked like behind you -- you understand what the appearance of impropriety is."

Despite the letter of admonition coming to him, Rodriguez was not upset by the proceeding's outcome.

"It was a fair decision," he said afterwards. "They said it was unintentional."

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