2017 Report for Houston Community College PREPARED BY DOLCEFINO CONSULTING WAYNE DOLCEFINO, PRESIDENT DOLCEFINO.COM HOUSTON, TEXAS On July 7, 2017 the U.S. Attorney for the Southern District of Texas unsealed a bribery indictment and subsequent guilty plea by Houston Community College Trustee Chris Oliver. In his plea, Oliver admitted he sold influence at the Houston Community College system for money over a period of several years, at least dating back to 2010. See Exhibit 1. Oliver’s ethical challenges were no secret to Dolcefino Consulting. In June of 2013, firm President Wayne Dolcefino had recorded video and audio of HCC Contractor Pete Medford of Fort Bend Mechanical detailing his monthly payments of approximately $9,000 to Oliver. See Exhibit 2. There was public disclosure of the recording at the time, and later the entire tape was played in the federal court lawsuit Ramirez vs. HISD. The tape was entered into evidence during the pendency of the lawsuit. There was extensive news coverage. Available evidence suggests counsel for both parties found out about the tape sometime during July 2013 when a motion was filed by attorneys for Ramirez. The exhibits identify audio tapes and a transcript of key parts of the conversation. The Houston Independent School District and other defendants were represented by legal counsel, and the names of the attorneys are significant because they represent the core of legal advisors to the district. They include Arturo Michel and Johnson Hopkins of the law firm of Thompson and Horton. dolcefino.com Page 1 Lawrence Marshall, the Houston Independent School District Trustee eventually found liable for public corruption in the racketeering case, was represented separately. The civil docket for the case identified Marshall’s legal counsel as Jarvis Hollingsworth, Melissa Mihalick and Richard Whiteley, all of Bracewell LLP (formerly Bracewell & Giuliani LLP), and Richard Morris and Paul Lamp of Rogers, Morris and Glover. See Exhibit 3. Both Mr. Hollingsworth and Ms. Mihalick have also provided extensive legal counsel to the Houston Community College Board of Trustees. On the firm’s website, Mr. Hollingsworth, the General Counsel for HCC, reports he “advises members of the Board and administration of HCC on procurement related legal matters.” See Exhibit 4. If Mr. Oliver truly had the ability to steer contracts, then a relationship with someone in procurement would have been essential. As the lawyer for Mr. Marshall in the HISD case, Mr. Hollingsworth should be forced to explain what information he had that alleged specific acts of corruption by a member of the Houston Community College Board. Since HCC has not provided us notes of executive session minutes of the Houston Community College Board of Trustees, Dolcefino Consulting has no independent way to evaluate a key question: Was this information provided to the Houston Community College Board of Trustees? If it was not provided, did Bracewell and Giuliani, Thompson and Horton, or Rogers, Morris and Grover violate any ethical responsibility? This was not information gained in confidence from another client. Dolcefino Consulting believes it is simply not credible that law firms heavily involved in the Houston Independent School District corruption case did not have potentially incrimination information about Oliver years ago. And this isn’t the only questionable thing Oliver has done. For example, on June 16, 2016, while discussing a potential vendor contract relating to a bond-release program Chris Oliver was seen talking with employees of Colon Law Firm and Haynes & Boone, both of whom would be potential vendors for the refinancing of $110 million dollars in bonds. Any discussion with potential vendors would be a violation of the blackout period imposed on Board members prior to votes on vendor contracts. See exhibit 23. dolcefino.com Page 2 Later that same night Oliver jotted down a note asking to reconsider various votes on various issues concerning those bonds at issue. With the votes of Zeph Capo and Eva Loredo the issue was put on the agenda for a later board meeting, and Andrews Kurth, who had been selected to deal with the bonds, was replaced with Bracewell LLP. On July 13, 2017 the Houston Community College Board of Trustees voted to formally censure Oliver, stripping him of all committee assignments. This action simply does not go far enough, and explains in part why the public is skeptical of the Houston Community College System. See Exhibit 5. At the time, Oliver was the Chairperson of the HCC Audit Committee. This action came four years after allegations of possible kickbacks may have first become available to key legal advisors of the Houston Community College. Since July 13, 2017, the Houston Community College Board has not moved to formally seek the legal removal of this corrupt elected official. That is a failure of moral leadership. The voters of District XI deserve the immediate opportunity for a new representative on the Houston Community College Board. The board should vote to immediately request that the Harris County Attorney Vince Ryan begin those proceedings to remove Oliver from public office. Three days after Oliver’s indictment was unsealed, HCC Chancellor Cesar Maldonado announced the Oliver corruption scandal would lead to an internal review of policies and procedures at the Houston Community College. See Exhibit 6. The process that has unfolded since then may be the best evidence of why the Houston Community College has lost the moral high ground with taxpayers. Under the current system, the Chancellor has the authority to spend up to $75,000, using law firms that are pre-approved, before having to come to the Board of Trustees to even disclose the engagement or expenditures. Remember, The Houston Community College Administration already employees Ashley Smith as a full time General Counsel. The College System Counsel is already provided with a budget of $1,039,693. See Exhibit 7. dolcefino.com Page 3 Dolcefino Consulting believes this pre-approval process to engage additional outside law firms has already wasted hundreds of thousands of tax-payer dollars just in the last few months alone and has exposed the “swamp of conflicts of interests” plaguing the credibility of this institution. We believe the Chancellor should have to come to the Board of Trustees before initiating any internal investigations which require the hiring of outside counsel, and release any findings that have been unearthed after each legal engagement is completed. Dolcefino Consulting recommends that pre-approval policy be revised to limit these outside pre-approved expenditures to emergency legal issues only. As the Chris Oliver indictment shows, this pre-approval process leads to a massive amounts of wasted taxpayer money. Chancellor Maldonado’s memorandum on October 31, 2017 provides an internal timeline of events following the disclosure of the guilty plea which help illustrate how this waste has occurred. Here are some of the important dates from the Chancellor’s timeline: See Exhibit 6. ▪ July 7, 2017: Court unseals Oliver’s indictment and guilty plea ▪ July 10, 2017: Preliminary discussions between Chancellor Maldonado and Locke & Martinez begin ▪ July 13, 2017: Locke & Martinez report to the Board of Trustees ▪ July 18, 2017: An engagement letter is executed between Chancellor and Locke & Martinez ▪ September 7, 2017: Locke withdraws citing a conflict of interest ▪ September 18, 2017: Board of Trustees declines an increase in Martinez’s budget ▪ September 20, 2017: Without first reporting to Trustees Chancellor signs another engagement letter with Larry Finder. ▪ September 22, 2017: Finder presents to Board of Trustees. There is no vote to approve the Finder engagement by the Board of Trustees. ▪ October 19, 2017: Finder-Sutton budget of $750,000 dollars is rejected ▪ October 27, 2017: Without Board Approval, Chancellor signs another engagement letter Arturo Michel of Thompson and Horton. The firm is on the pre-approved list. ▪ November 16, 2017: The HCC Board of Trustees approves an engagement with Larry Finder for a specific review into the relationship between Chris Oliver and Jackquline Swindle, the Director of Building Operations for the Houston Community College. The budget is $160,000 dollars. dolcefino.com Page 4 Gene Locke and Vidal Martinez The first attorneys engaged through this flawed pre-approval process should have raised substantial red flags. The HCC Chancellor must have known these important engagements to allegedly restore public trust would be scrutinized for any obvious conflicts of interest, and his own relationship with Martinez creates one of the largest. It is the view of Dolcefino Consulting that no firm which has performed significant work for the Houston Community College in the past, or has provided legal advice on procurement or personnel practices in the past, cannot be expected to fully identify the obvious failures of the system without fearing they will lose additional business down the road or expose the firm to liability for failed processes they created in the first place. The engagement letter with Gene Locke of Andrews-Kurth LLP was executed on July 18, 2017. As part of our review, Dolcefino Consulting requested previous payments to Andrews Kurth LLP. Documents released by the Houston Community College identify $720,513 dollars in payments to the law firm since January 1, 2010. See Exhibit 8. Based on a review of the invoices, Locke began working on the Procurement and Compliance review on August 1. 2017. According to invoices prepared by Gene Locke their firm then engaged another firm, Pathway Forensics LLC, to provide additional professional services, specifically a forensic review. In just 24 days between August 1 and August 25, 2017, Andrews and Kurth racked up $36,799.50 in legal fees. There was additional $65,071.25 in fees for the services of Pathway Forensics LLC. In less than a month, the total for the services of Locke and Pathway Forensics was $102,032.07. Pathway Forensics declined to discuss their work product with Dolcefino Consulting. With limited cooperation by HCC, we do not know if the Chancellor approved this additional engagement, but we know the Board of Trustees did not take any formal action to approve the hiring of either firm in advance of these significant expenditures. Dolcefino Consulting believes the elected officials responsible for the operation of HCC should have the responsibility of approving this type of investigation prior to the expenditure of public funds, not the Chancellor who serves at the pleasure of the Board of Trustees. It is legitimate to question the scope of work. According to his invoices, Locke was engaged in “Procurement and Compliance Review”. In the month he worked on the project he presented at two trustee meetings had a myriad of telephone conferences, spent a few dolcefino.com Page 5 hours in “consideration of Disclosure Questions to Outside Counsel”, reviewed court documents regarding Oliver, and interviewed some unidentified members of HCC’s staff. By September 25, 2017 Locke had invoiced HCC a total of $131,658.07. Locke had withdrawn from the investigation on September 7, 2017 citing a conflict of interest with the main target of the investigation, Chris Oliver. Why didn’t Locke fully research possible conflicts before accepting the engagement? See Exhibit 9. Dolcefino Consulting was denied the opportunity to review the work Locke performed, even though the work product is not made confidential under law. The Houston Community College wants the Texas Attorney General to keep the work product a secret. This lack of transparency is a recurring theme and represents a significant failure of public disclosure. We argue these documents should be made public immediately, so that taxpayers can evaluate what they actually received for the money already expended. We also believe the General Counsel of HCC should launch a formal review of the legitimacy of the invoices. Locke had an ethical obligation to thoroughly review his relationships before accepting this engagement. Taxpayers have a legitimate right to seek a refund of the legal fees expended because of this failure. Taxpayers also have a right to see the work product. Vidal Martinez Vidal Martinez had a significant relationship with the Chancellor and should have never been chosen for a review that could potentially impact the Chancellors office. On November 2, 2017 the Texas Monitor capsulized some of the obvious ethical conflicts. Martinez had entertained HCC Board Members and their spouses, and had held lavish fundraisers. See Exhibit 10. According to the invoices provided by HCC, Vidal Martinez of Martinez Partners LLP has also previously represented HCC at least twice before. Once on an issue in 2014 regarding “Five Woods” and a second time in 2015 regarding the State Auditor. The pre-approval process ignited complaints about the legal fees submitted by Martinez in 2015. During our review of e-mails the HCC administration was willing to produce, we identified e-mails from HCC Board Member Zeph Capo following a blistering editorial from the Houston Chronicle entitled “Friends with Benefits. Personal relationships at HCC muddy the results of a corruption investigation.” dolcefino.com Page 6 Capo asked his fellow trustees a question we have: “When will we be done with this crap from the past.” He followed this up a few minutes later with another angry email, stating that if the transparency situation didn’t improve, HCC should search for a new Chancellor as well as a new Board of Trustees. See Exhibit 11. Capo’s email was not without reason. According to the Chronicle article, Martinez had been paid $200,000 dollars without board approval. That is why we note information obtained from legal bills under the Texas Public Information Act. According to a memo created by Chancellor Maldonado, Martinez executed his performance agreement with the Houston Community College Chancellor on July 18, 2017 regarding the Oliver Investigation. Oliver’s guilty plea was made public on July 7, 2017. A review of his invoices indicates that on that same day the Martinez firm, hired by the Chancellor without Board consent, began conducting work on the project. Martinez charged $525.00 for an hour review of media articles and a telephone conference with a person whose identity is redacted from the public records. On July 12, 2017, the firm conducted research into the status of HCC Board Members as public officials. Why in the world is that not the purview of the elected Board of Trustees? The Chancellor works at the pleasure of the Board of Trustees. The Chancellor should play no role in auditing the elections of his bosses. Period. This is evidence of a process that creates dysfunction with the Board of Trustees and breeds a negative public reputation. By July 9, 2017 both Martinez and Locke from Andrews and Kurth were already billing for work on the Oliver investigation. It is hard to believe these engagements were carefully considered in just hours. Since the corruption involved a Trustee, it is the responsibility of the Board of Trustees to handle this investigation, in part because it would logically include a review of communications between the Chancellor’s office and Trustee Oliver. According to his invoices, Martinez was performing a Personnel Review for the HCC Administration relative to the Chris Oliver indictment. Martinez submitted two invoices for his investigation. The July invoice amounts to $39,366.25, the August invoice amounts to $38,240.64, for a total of $77,606.89 over the span of just two months. dolcefino.com Page 7 Together, Locke & Martinez managed to spend $209,264.96 on behalf of HCC over the span of just two months. The Houston Community College Board of Trustees should have already ordered the release of their work product. Instead, the law firm of Rogers, Morris and Glover has been hired by the administration to fight the release of these records. We know of no formal request to the Houston Community College Board of Trustees to spend resources this way. Dolcefino Consulting vigorously objects to the refusal of the Houston Community College to cooperate with our review. Taxpayers of Harris County are funding these investigations, not public servants. The voters are the ultimate bosses. Taxpayers are the ultimate bosses. They have a right to see what benefits they received from an investigation that has approached a quarter of a million dollars in just two months. No public report has been issued by either firm. Arturo Michel The Houston Community College System does not learn from public criticism. After the Chancellor engaged two firms with obvious conflicts of interest, the Houston Community College System repeated the flawed logic. Arturo Michel of Thompson & Horton LLP was engaged by the Chancellor. The engagement letter was signed on October 27, 2017. Let us first remind the Houston Community College Board that Michel represented the Houston Independent School District in the civil lawsuit where allegations against Chris Oliver first surfaced. Records obtained by Dolcefino Consulting once again identify prior legal representation by Michel and his firm Thompson and Horton of the Houston Community College. Payments to Thompson & Horton total $978,863.67 since January 1, 2010. We believe this long-standing prior lucrative engagement disqualifies Michel from conducting an independent investigation that should include a review of communications between Oliver and the Chancellor, and between Oliver and other Trustees. This investigation further requires a review of e-mail communications, phone records and political campaign records to see whether the Chancellor participated in specific Trustee elections. dolcefino.com Page 8 The relationship between the Chancellor and the Trustees is not one of equality. That is because the Chancellor is hired and engaged by the Board of Trustees. This move to make the Chancellor a member of the team of elected officials is popular in Texas. It is also flawed and dilutes responsibility of the elected members of the Board of Trustees. Michel claims no conflicts of interest in his hiring, specifically stating, “I do not have ethical or legal conflicts.” Michel does acknowledge his law firm has made contributions to a Political Action Committee that participates in the election of public trustees. In his letter Michel writes, “Certain individuals believe that campaign contributions create a perception of a conflict. The law addresses this issue by requiring public disclosure of campaign contributions.” See exhibit 13. With all due respect Mr. Michel, the law doesn’t address the perception issue, it just makes potentially elected officials report the contributions. It is simply not credible to claim the public does not believe in large numbers that people give campaign money for influence. They do, especially in these local races. In addition, there is a significant perception among critics that elected trustees often trade votes, a way to protect trustees who might be forced to abstain from votes or leave the room in advance of a vote. This bartering may make for a collegial atmosphere, but it is not in the public interest. Houston government has become famous as a playground for “pay to play” politics. It is not confined to the Houston Community College, but the Institution’s reputation is tarnished by the appearance. Dolcefino Consulting strongly rejects the notion that campaign contributions from vendors or lobbyists, create an illegitimate perception of possible conflicts of interest. Taxpayers are not stupid. The reality is many voters believe campaign contributions create conflicts of interest. The Houston Community College Board of Trustees has an obligation to eliminate the perception of conflicts. The repeated failure to recognize conflicts of interest in these legal engagements is a primary reason for the questionable reputation the institution has earned in the wake of the latest ethics scandal. We believe there are additional reasons for concern. dolcefino.com Page 9 Mr. Michel was Chairman of an Advisory Committee tasked with review procurement practices at HCC just a few years ago. Michel is conflicted out of further review. A subsequent search of Arturo Michel’s public litigation in Harris County turns up ten civil cases since 2013. Of those ten cases, three have involved representation of the Tejano Center for Community Concerns. According to public records, the company operates The Raul Yzaguirre Schools for Success. The Superintendent of this Charter school is HCC Trustee Dr. Adriana Tamez. Shouldn’t that information have been included in the disclosure? Does Dr. Tamez have some responsibility to disclose if Michel doesn’t? These are the questions the HCC Board should have identified. Dr. Tamez should have recused herself from any discussion of Michel. See exhibit 14. At this time, we have sought but have not received invoices already submitted by Mr. Michel. We expect the Houston Community College to maintain its flawed practice of withholding these vital public records from disclosure. There is no legal requirement these documents be concealed. They may be redacted, but are not required to be under state law. Michel should face the standard as other attorneys involved in this investigation. Their final report must be made public. This is a way to exhibit transparency. Larry Finder Larry Finder of Baker McKenzie is a former U.S. Attorney has now also been engaged by the Houston Community College to investigate whether Oliver had compromised the Director of Building Operations Jackquline Swindle. The proposed budget for the investigation is another $160,000. Without comment on the cost of this proposed investigation, at least the HCC Board of Trustees initiated this investigation and not the Administration. This pre-approval power of the Chancellor is a sordid process. The fights over the choice of outside counsel to conduct corruption investigations, even if ultimately necessary in this case, cannot begin with the Administration. It must begin with the HCC Board of Trustees. Changing legal counsel every few weeks is not fiduciarily responsible. dolcefino.com Page 10 From our limited review, more than a one quarter of a million dollars has already been spent in post indictment investigations of Oliver by the Houston Community College System. The public deserves to know what has been found so far with their hard-earned money. The failure of the Houston Community College system to understand the importance of that reality is a core failure, another reason for continuing controversy. What have taxpayers received so far? Where are the answers? Strasburger & Price LLP During our review of HCC legal fees, we took a closer look at the payments to the law firm Strasburger & Price LLP. The law firm appears to be HCC’s go-to intellectual property firm. They handle everything from researching the availability of internet domain names to marketing campaigns for HCC. We believe one issue in particular, helps us illustrate just one of the issues with the pre-approval list and the prudent use of public funds. During the summer of 2016, South Texas College of Law sought to change its name to Houston College of Law. This resulted in a short legal dispute between South Texas and the University of Houston. The Houston Community College System was not a party to the litigation, nor did we see any official records of the HCC Board of Trustees where the Chancellor even brought up trademark concerns. However, Dolcefino Consulting discovered documents showing the Houston Community College System spent nearly $200,000 dollars for legal work to review trademarks of the institution. A fact that raises a couple of questions: Who was complaining about the trademarks of the Houston Community College? Who was threatening litigation? These should have been questions raised by the elected Board of Trustees if they had agreed to the legal work in advance. Instead, the HCC administration pursued trademark issues without the knowledge of the Board of Trustees. In February 2017, Strasburger & Price started researching a “Coexistence Trademark Agreement with U of H” and in March they began filing paperwork to oppose the University of Houston’s trademark for “HOUSTON.” Between February and August these dolcefino.com Page 11 two projects alone have cost Houston Community College $99,936.33. HCC provided no evidence the Board of Trustees approved this legal effort in advance. According to records provided by the Houston Community College under the Texas Public Information Act, as of November 1, 2017, there have been no communications between Houston Community College and the University of Houston which would indicate that the trademark and copyright issue has even emerged, or would emerge as a legal issue between the schools. In June of 2017, Strasburger & Price began work on a variety of trademark issues related to the Coleman College for Health Sciences. Again, this legal work was executed without Board pre-approval. By splitting this work into separate cases, the Chancellor avoided having to go to the Board of Trustees for approval of the legal fees exceeding $75,000 dollars. They are pre-approved. We repeat our position. This spending without prior Board knowledge and authorization creates the potential for criticism. It is easily remedied. We have analyzed the dysfunctional process HCC has already used to pursue an investigation of Chris Oliver, personnel and procurement practices. Do you know what further raises legitimate suspicions? At the same the Houston Community College Board of Trustees is using Larry Finder to investigate the procurement department, the Administration of HCC is fighting the public release of e-mail communications between Oliver and Swindle. See Exhibit 15. The HCC Board of Trustees could save a lot of taxpayer money if they simply released all of Swindle’s communications with Oliver. Maybe the communications are boring, or embarrassing. However, both Swindle and Oliver are both public officials, either elected by voters or paid by taxpayers. If they stand the test of public scrutiny, why not release them? Dolcefino Consulting has a simple message. There should be no individual communications by phone or e-mail between an individual member of the HCC Board of Trustees and any Officials or Employees involved in procurement matters, contracts, proposals or the selection of vendors. dolcefino.com Page 12 The Chancellor should be the person responsible for getting those answers from his departments to the HCC Board of Trustees, and any direct communications should be made in a public session of the HCC Board of Trustees. Trustees should never communicate information about a potential vendor directly to these employees, but simply refer them to the Administration. Taxpayers clearly see the conflicts-of-interest plaguing HCC. We have well established law firms which have benefited substantially from Houston Community College legal fees, or law firms which have made sizeable political contributions to selected members of the Houston Community College Board. They should all be disqualified from conducting internal corruption investigations. In many cases, these law firms are responsible for crafting many of the policies and procedures they are now supposed to scrutinize. Do we really believe these firms will criticize the HCC general Counsel’s office, or the elected officials they financially supported, or officials they previously represented as an attorney? The choices of these outside firms selected to restore public trust, have contributed to the great public distrust. Dolcefino Consulting was retained by Dave Wilson, an independently elected member of the Houston Community College Board of Trustee in late July of 2017. We were directed to investigate and provide the Houston Community College Board of Trustees a helpful roadmap to ethics reform, financial prudence and transparency in the wake of the Oliver case. Based on our initial reviews and ongoing media reports it is clear the Houston Community College has a reputation for scandal and secrecy that will lead to growing public opposition to ballots that seek additional funds. dolcefino.com Page 13 CREATION OF HOUSTON COMMUNITY COLLEGE It is important to understand the history of the Houston Community College in order to analyze a root failure to improve the ethical standing of the institution. • May 1971 – public referendum created HCC under the governance of HISD. Classes were held in Houston Independent School District Buildings • 1984 – HISD Board of Trustees allotted a portion of its property tax levies to HCC for facilities, equipment, and operating expenses. • 1986 – Houston voters allocated separate tax levy to HCC for additional funding. • 1987 – TX State Legislature granted HCC authority to establish its own Board of Trustees through SB 726 during the 70th Regular Session, authored by John Whitmire and Sponsored by Paul Colbert. • March 9, 1989 – HISD officially transferred control of the college to HCC Board of Trustees. We attempted to recover the campaign records of that 1986 public vote and identify the political action Committee that contributed, if any, to the vote. Neither the county clerk or the Houston Community College has retained those records. Our interest was identifying whether firms and individuals who contributed to the creation of the Houston Community College are benefiting from contracts. In the thirty years since the Board of Trustees were established, the Houston Community College has suffered through serious questions about the legitimacy of real estate transactions. See Exhibit 2. Hours before our engagement was publicly announced, Wayne Dolcefino, President of Dolcefino Consulting, called Jarvis Hollingsworth, Board Counsel for the HCC Trustees to notify him of the investigation. Mr. Dolcefino also notified Mr. Hollingsworth that he expected HCC to fully comply with requests so that his company could provide a substantive report which could help the Houston Community College system eventually improve their public reputation. This phone call was predicated by Mr. Dolcefino’s personal experience. While working as a journalist at KTRK ABC-13 Television, it was his view that HCC engaged in dolcefino.com Page 14 wholesale obstruction of public records from the 13 Undercover unit and other news organizations. This lack of transparency provides a key basis for the public distrust which has developed over the years. Despite this phone call, the Houston Community College then chose to delay release of public records, consistent with their reputation, trying to hide from public disclosure key documents required for any ethical review. Dolcefino Consulting was retained by an independently elected public official. We think the public deserves cooperation in this review. The wholesale effort to delay production is proof the Houston Community College simply does not get it. In the first phase of this review, Dolcefino Consulting reviewed previous media reporting on HCC and thousands of public records, including Campaign Finance reports, email communications, specific invoices, and contracts for legal services. For the first few weeks of our engagement, employees of the Houston Community College Open Records Group even refused to return our phone calls, or answer e-mail communications to facilitate cooperation and expedite the release of pertinent public records. That is unacceptable, but not surprising. Dolcefino Consulting was forced to threaten legal action, and possible criminal complaint before documents began to materialize in any meaningful way. See Exhibit 16. On September 14, 2017 Dolcefino Consulting’s frustration with HCC had reached a boiling point. In an e-mail sent to HCC Open Records Division, Mr. Dolcefino states, “This is ridiculous. I haven’t gotten a single record requested since I was retained by Mr. Wilson as an elected member of HCC… Please share with Mr. Jarvis Hollingsworth that my message was quite clear. Do not press it.” Neither HCC or Mr. Hollingsworth responded to this message. See Exhibit 17. Texas Public Information Act includes one paragraph that should be a guiding principle for all public agencies, including the Houston Community College. It states, “The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know.” The expenditure of public funds to fight this investigation or to block legitimate requests for information and the public right to know is not only wasteful, it is fuel for those who complain about secrecy at the institution. The Houston Community College already has administrative personnel responsible for providing documents under the Texas Public Information Act. dolcefino.com Page 15 Instead of doing their jobs, the Houston Community College retained the outside law firm of Rogers, Morris and Glover to communicate with our firm. This is an unnecessary public expense. The Houston Community College General Counsel has the expertise to identify confidential records. None of the records we have requested are confidential under state or federal law. Every document HCC seeks to withhold they have the authority to release in the public interest. Any legal claim otherwise is only obstruction. As of this report, the Houston Community College is withholding an unknown number of documents. Some of those documents may shed light on the ethical issues HCC is willing to spend up to $1 million dollars investigating. This is a public accounting of the unnecessary obstruction by the Houston Community College administration. See exhibit 18. The hiring of an outside law firm in this case is symptomatic of the growing public relations problems for Texas educational institutions who routinely use outside law firms to fight release of records to the very people who pay for the operation of the institution. Since January 1, 2010, Rogers, Morris and Glover have been paid more than one million dollars ($1, 932,863.00) by the Houston Community College System. Thompson and Horton often engage in these public records fights on behalf of educational clients. According to records for the same period of time, that firm has been paid nearly one million dollars ($978,863.00) for outside legal work. Dolcefino Consulting has not analyzed the legal bills in detail to see how much public money has been spent fighting the release of public information from a public institution. As this money is spent, we urge the Houston Community College System to remember the individual tax bills received by public that are being used not to educate kids for the future, but keeping the public in the dark about the way their money is being spent. As stated previously, another facet of our investigation was issues regarding the campaign finances of the various Board of Trustee members. It becomes very evident that the Board of Trustees receives a majority of their funding from a very small group of people, most of whom have contracts with Houston Community College. Houston Business Education Coalition PAC We analyzed all nine current trustees and their political contributions from 2013 through the most recent reporting period. In that analysis, it became obvious that the Houston Business Education Coalition PAC often funds a disturbingly large portion of the campaign finances for various trustees. That is not illegal, but it provides an interesting dolcefino.com Page 16 roadmap to the financial relationships raising the concern of an increasing number of HCC critics. HBEC PAC began making campaign contributions in Houston in 2009. The top ten contributors make up more than half, ($157,000) of the nearly $300,000 that HBEC PAC has taken in since their formation. Since 2013, the PAC has contributed $193,000 dollars in campaign funds around the city of Houston, but more than half of the money has been focused on elections for Trustees of the Houston Community College, specifically $103,000 of these expenditures have been to the benefit of current HCC Trustees. The top ten contributors, in order, are: 1. Lawrence Kellner, President of Emerald Creek Group, a real estate company. $42,500.00 2. Welcome Wilson, Chairman of Welcome Group, LLC, a real estate development company. $25,000.00 3. Richard Weekley, Owner of Weekley Properties, a real estate company. $16,000.00 4. Charles Duncan, an investor. $13,000.00 5. Don Woo, President of The Affordable Housing Group. $12,500.00 6. Jonathan Day, former Partner at Andrews Kurth, a significant beneficiary of HCC legal business. Day is currently of Day PLLC. $12,000.00 7. Douglas Foshee, an investor. $10,000.00 8. Karun Sreerama, the former director of Public Works. Sreerama was Forced to step down over paying bribes to Christopher Oliver, $10,000.00 9. Richard Schechter, a lawyer. $8,500.00 10.Lori Vetters, President of Houston Technology Center, $7,500.00 dolcefino.com Page 17 Houston Community College Trustees During this same period the current Houston Community College Trustees have taken in a collective $342,214 in through 557 individual contributions to the Trustees by various members of the community. We believe that by analyzing the overall contributions that come from any source, it becomes obvious who funds the Board of Trustees. The Trustees can be split into three tiers, the first consist of Board members who have received large amounts of contributions. The second consists of Trustees who have received a smaller (but still notable) amount of money in their campaigns. The third tier consists of largely self-funded Trustees. 1) The first level consists of contributions to Dr. Adriana Tamez, amounting to $122,331.80 over 210 contributions, and Zeph Capo has taken in $97,830 over 191 contributions. 2) The second level consists of Eva Loredo, who has taken in $39,081 over 60 contributions, and Neeta Sane has taken in $39,086 over 50 contributions. 3) The final level is made up of the trustees who receive very little in terms of contributions. These include namely Dr. Carolyn Evans-Shabazz (21 contributions for $9,060), Dave Wilson (1 total contribution for $1,000), Christopher Oliver (5 contributions for $10,225), Robert Glaser (11 contributions for $16,400) and Dr. John Hansen (8 contributions for $7,200). We all understand right of individuals and companies to financially contribute to political campaigns in the public interest. Let’s be blunt. It is difficult to avoid the reality that in our community, firms who contribute to politicians seem to find their way onto the vendor list of government institutions in the Houston Area. Dolcefino says, “I was born at night, but not last night. Maybe it’s all just a coincidence. The public believes there is a connection. The Houston Community College ignores the perception at their own reputation peril.” Nearly one out of three dollars raised by current trustees since 2013 come directly from the HBEC PAC. The public would have to review the contributions to the Political Action Committee to understand the full import of the potential conflict. Dr. Adriana Tamez has relied most heavily on the PAC for a large share of her financial support. Tamez raised $45,250 from the HBEC PAC. Three of these donations being $10,000 or larger. This translates to 37% of her total $122,331.80 coming directly from the HBEC PAC. It should be noted there appears to be financial discrepancies in the dolcefino.com Page 18 Tamez campaign filings. HBEC PAC filings with the Texas Ethics Commission show the PAC made a $1,000 contribution to Tamez in support of her campaign on October 22, 2015. This contribution is not reflected in the Tamez disclosure covering September 25, 2015 to October 24, 2015. Tamez, however, is not the only person who the PAC has given large sums of money to. Eva Loredo has recorded $39,081 in donations. More than half of that has come from the HBEC PAC. Zeph Capo, likewise, has received $21,000 from HBEC PAC, including one donation for $15,000. This accounts for 20% of his overall contributions. Robert Glaser received $16,400 contributions, $10,000 came over two donations from the PAC, or 61% of his donations. Also receiving contributions from HBEC PAC were Neeta Sane ($3,500, or 8%), Carolyn Evans-Shabazz ($1,500, or 16%) and John Hansen ($1,500, or 21%). Our client Dave Wilson has not been supported. Dual Contributors The next aspect of the HBEC PAC contributions to consider is the people and entities who make contributions to both the PAC and individual candidates. There are ten contributors who fit this group. These contributions add a further $24,975 to the overall contributions to the Trustees. This brings the total financial support to 38 percent of all funds. ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Andrews & Kurth Texas PAC ($8,500) Bracewell & Giuliani Committee ($8,725) Gasper Mir ($1,000) Graciela Saenz ($800) James Jamail, owner of Jamail Construction ($750) Janet Clark ($100) Jonathan Day ($250) Richard Schechter ($35) Richard Weekley ($2,500) Welcome Wilson The relationship between campaign contributions and contracts do explain the appearance of “pay to play” politics. Since 2015, Patrick Pollan has personally donated $9,100 dollars in political contributions to the campaigns of current Houston Community College. Trustee Adriana Tamez is the largest beneficiary of these contributions. Since dolcefino.com Page 19 2015, Pollan Hausman Real Estate Services, LLC. has been awarded contracts from the Houston Community College totaling $702,649. During our review, we have received allegations that some of these financial benefactors met with members of the Houston Community College Board to lobby for support of the extension of the Chancellor’s contract. This should be publicly disclosed. The Houston Community College Board of Trustees should immediately implement a registration system to identify those who seek to lobby the trustees or the administration. The City of Houston system is horribly enforced, but at least it exists and provides a guidepost to who is trying to influence these public officials as a lobbyist. Anyone who seeks to influence a decision should have to register and declare their direct or indirect support of members of the HCC Board of Trustees. As part of our review, Dolcefino Consulting sought the business phone records of members of the board of Trustees and the Director of Building Operations. Phone calls or text messages have become a primary source of communication between public officials at meetings, and between public officials and vendors, and the Texas Attorney General has more than once ruled that telephone communications concerning the public’s business are public records. Dolcefino Consulting requested phone records of Jackquline Swindle to determine if there are identifiable communications with Chris Oliver. We also requested Oliver phone records. He refused to provide them, a violation of the Texas Public Information Act, but clearly not his biggest problem right now as he is facing sentencing for bribery early next year. We attempted to verify phone numbers using available investigative methods. Using known phone numbers of Oliver available we note a 19-minute phone call made from Oliver’s cell phone to Swindle on June 1, 2016. HCC has yet to produce all the phone records requested. Dolcefino Consulting has had to threaten criminal complaints to the Harris County District Attorney’s Office to begin to secure phone records from trustees. On October 17, 2017, Dolcefino Consulting wrote that “all phone records must be provided by the close of business October 20, 2017 by 5:00 pm or Dolcefino Consulting will follow the direction of the statute to file a formal complaint with the Harris County District Attorney’s Office.” See Exhibit 19. We still have not received phone records from Chris Oliver. dolcefino.com Page 20 In the early days of our engagement we reviewed the contents of client Dave Wilsons web page on Houston Community College issues located at http://www.davewilsonhcc.com. As part of that review we noted the serious allegations made against Dr. Tamez. We must make it clear that we intentionally avoid any political disagreements between the parties. We focus only on an important question to voters. Does Adriana Tamez truly live in the district she claims to represent? There is more at stake than a review of our blurry election law issues. Dolcefino Consulting believes the public is entitled to a representative of their neighborhood. Tamez signed a sworn statement verifying her residency qualifications to run for office on July 27, 2015 under penalty of perjury. In the affidavit, Tamez listed her residence as 4436 Jefferson, Houston, Texas. She represents in the affidavit she has lived in District 3 for 17 years. See Exhibit 20. Wilson’s website had claimed Tamez lived at 3333 Allen Parkway. It is not located in District 3. He based his allegations on video surveillance. We do not know who conducted this surveillance. As part of our review, we examined public records and engaged in our own independent surveillance of Tamez to attempt to corroborate or disprove these allegations. The following are portions of the sworn affidavit created by Kelsey Galbraith, a licensed attorney working for Dolcefino Consulting. 1. On July 27, 2015, Tamez filed an “Application for a Place on November 3, 2015 General Election Ballot.” This document is a sworn statement, and signed by a notary public. In this document, Tamez lists her home address as 4436 Jefferson, Houston, Texas 77023. In this document, Tamez also states that she has lived within the geographical confines of Houston Community College District III (“HCC District III”) for 17 years. 2. During the course of our investigation into Tamez, Dolcefino Consulting found no less than four public records that appear to directly contradict Tamez’s assertion that she has lived in HCC District III for 17 years 3. On July 15, 2011, Tamez and Dr. Tommy Brock (“Brock”), applied for a marriage license with the Harris County Clerk. Tamez and Brock both listed their home addresses as “3333 Allen Parkway, Unit 1501, Houston, Texas, 77019.” (“the Allen Parkway location.”) 4. According to information provided by LexisNexis, on December 1, 2012, Tamez registered a 2002 Lexus 300, listing the address associated with the dolcefino.com Page 21 registration as the Allen Parkway location and registered the vehicle in her name. 5. On June 23, 2013, the Houston Center for Literacy filed a Periodic Report with the Office of the Secretary of State and provided the names and addresses of all members of the Board of Directors. Tamez is listed on this document as a member of the Board of Directors and on Houston Literacy Center’s website as an honorary board member. The June 23, 2013 filing with the Office of the Secretary of State lists Tamez’s address as the Allen Parkway location. 6. According to information provided by LexisNexis, on January 20, 2014, Tamez registered a 2002 Lexus 300, listing the address associated with the registration as the Allen Parkway location and registered the vehicle in her name. 7. According to information provided by LexisNexis, utilities were connected in Tamez’s name at the Allen Parkway location, on September 3, 2010 and recorded on February 12, 2014. 8. On three separate occasions, Dolcefino Consulting conducted video surveillance of Tamez at the 3333 Allen Parkway, Houston Texas 77019 address. The year, make, model and license plate of Tamez’s vehicle was provided to Dolcefino Consulting and verified by Larry Kirk, another employee of Dolcefino Consulting, Wayne Dolcefino, owner and principal of Dolcefino Consulting, and myself on the afternoon of October 12, 2017 in the Houston Community College Parking garage located across from Houston Community College’s 3100 Main Street, Houston, Texas 77004 location. 9. On October 12, 2017 Larry Kirk and I conducted video surveillance on the Allen Parkway location. Tamez attended a Houston Community College Board of Trustees meeting from 3:00 PM to approximately 7:30 PM. At approximately 8:00 PM, Tamez’s 2018 Mercedes Benz GLE350 SUV, still bearing the paper license plate, set to expire on October 18, 2017, turned right off of Allen Parkway, into the entrance of the Allen Parkway location and valet parked. Larry Kirk and I monitored the entrance and driveway of the Allen Parkway location until approximately 10:00PM and Tamez’s vehicle did not leave the location during that period of time. 10.On October 19, 2017, I conducted video surveillance on the Allen Parkway location, again. Tamez was attending a Houston Community College Board of Trustees meeting from 4:00 PM until approximately 6:30 PM. At approximately 7:35 PM, Tamez’s 2018 Mercedes Benz GLE350 SUV, still dolcefino.com Page 22 bearing the paper license plate, turned in to the entrance of the Allen Parkway location and valet parked. After the valet drove the vehicle in to the parking garage, I ended my video surveillance and left the location. 11.On October 20, 2017, I conducted video surveillance on the Allen Parkway location, for a third time. At approximately 7:34 AM, Tamez’s 2018 Mercedes Benz GLE350 SUV, still bearing the paper license plate, drove out of the driveway leading at Allen Parkway location and turned right on to Allen Parkway. I then ended my video surveillance and left the location. 12.The unit at 3333 Allen Parkway, Houston, TX 77019 was purchased by Dr. Tommy Brock on January 26, 2006. This location is within the confines of Houston Community College District VIII. 13.Tamez signed a document on July 27, 2015 stating that she has lived in HCC District III for 17 years prior to the filing of the document. The evidence found is clearly contradictory and evidences that Tamez has lived at the Allen Parkway location, not within HCC District III, at some point within the last 17 years. Tamez’s actions could constitute a violation of Texas Penal Code Section 37.02 and may constitute a violation of Texas Penal Code Section 37.03. The fact that Tamez seems to continue to reside at the Allen Parkway location is further evidence that Tamez may have made a false statement when she swore she had resided within HCC District III for the previous 17 years. Dolcefino Consulting attempted to contact the Harris County Attorney. If Ms. Tamez swore to false documents she should be removed from office. Out of respect for the voters of District 3, Tamez should step down if her representations are false. In any case, she should publicly address this issue, and whether falsification of this type of issue is disqualifying or should be reviewed by the Harris County District Attorney. The Harris County Community College has rightfully earned a reputation for distrust. Chris Oliver was a symptom of a swamp of conflicts of interests that exist within the HCC. Since January 1, 2010 the Houston Community College System has spent more than $15 million dollars paying outside law firms on a myriad of issues. Of the 27 separate law firms, Bracewell LLP has received the highest fees $5,366,410 dollars. We have requested, but not yet received invoices directly relating to Jarvis Hollingsworth. See Exhibit 21. Some of those same firms are then retained as legal counsel on bond sales. Some of these legal fees appear to have been spent on internal battles between the Administration and the Board of Trustees. That is a symptomatic of a dysfunction that has seriously damaged the institution. The administration works for the Trustees. Period. dolcefino.com Page 23 We also include a chart of all vendors who have been paid more than $100,000 from the Houston Community College System in the last four years for public review. We note Law Firms are high on the list. It is also important to note payments of over $7,521,524 dollars to Miles Insurance Agency since 2014. The agency is run by State Senator Boris Miles. See Exhibit 22. We make no comment on the quality of the insurance Mr. Miles brokers, but we note choosing vendors that are also public officials create the kind of fodder the institution does not need. It is a legitimate public question. Is the firm hired because of the political influence Mr. Miles can provide? We also note that construction companies are the beneficiaries of the biggest payments. Tellepsen Builders was paid more than $100 million dollars ($105,709,927) by taxpayers since 2015. The Houston Community College is prepared to spend $1 million dollars on various law firms for the post Oliver review. Dolcefino Consulting has incurred just over $50,000 in billable time and expenses for this project. We believe this report, although embarrassing for the HCC system, is a blunt reminder of the deficiencies that breed public distrust. The Houston Community College doesn’t have to spend a ton of taxpayer money to identify their problems or the solutions. Wayne Dolcefino, President of Dolcefino Consulting signed up to speak to the Board of Trustees about the difficulty in obtained public records from the HCC Administration. Prior to the beginning of our engagement, Mr. Dolcefino had personally called Jarvis Hollingsworth, General Counsel of the HCC Board, to tell him of our engagement and to warn that we would not tolerate the games HCC often plays with stalling the release of public records. Hours prior to my public presentation to the HCC Board of Trustees, Hollingsworth called to inquire if I would make the presentation to an Executive session of the Trustees instead. I made the presentation as requested. The Trustees were silent. They took no action. Later Mr. Hollingsworth advised me he was trying to prevent embarrassment for the HCC Board of Trustees in a public session. I have known Mr. Hollingsworth for many years and he is a smart attorney. However, he should not be paid as public relations officer or a gatekeeper to the Board of Trustees. Remember that advice. According to the National Center for Education Statistics, the average expenses for a full-time student from the Houston area attending the Houston Community College is $14,432 dollars a year. That figure rises to $16,160 for in-state students. The student population of the Houston Community College is 57,032. We calculate the cost of $15 million in outside legal fees simply. 148 students could attend the Houston Community dolcefino.com Page 24 College every year absolutely free, including living expenses, for the money spent on outside legal firms. dolcefino.com Page 25 Recommendations 1) We recommend a thorough review of the need for 27 separate law firms. 2) We believe the importance of lobby registration would identify any individual representing the company to lobby HCC trustees. 3) We hereby recommend ending or severely limiting the capacity of the Chancellor to hire outside law firms, even if it means increasing the budget of the General Counsel. Any law firm hired to conduct independent investigations into possible criminal wrongdoing should be the sole responsibility of the Board of Trustees, and should not include any law firm with previous legal work for the administration or Board. 4) The need for two separate Counsels, one representing the board and one General Counsel, should be reviewed. We know it is a popular decision by educational institutions to have two separate legal counsels, but we believe it is unnecessary. Taxpayers are paying HCC Board Counsel up to $550 dollars per hour for legal advice. Houston Community College should institute an Inspector General to take complaints and create a hotline number for people to report possible inappropriate behavior. 5) There should be no communication between individual members of the Board of Trustees and any employee of the Procurement Department regarding contracts proposals or vendor payments. Those should be directed to the Chancellor outside of an executive or public session of the Board of Trustees. 6) The Houston Community College should err on the side of disclosure when it comes to public records, saving legal fights and the accompanying expenses to matters that are confidential under state law or represent important advice from legal counsel that protects the institution and the people who pay the freight. 7) The Board of Trustees should immediately move to seek the removal of Chris Oliver from the Board. An empty seat is akin to taxation without representation. 8) The Board of Trustees should immediately move to review the substantial evidence that Dr. Adriana Tamez does not truly live within the District she represents. The removal of Dr. Tamez from the Board is appropriate. dolcefino.com Page 26