Chuck Haralson and Ken Smith were inducted into the Arkansas Tourism Hall of Fame during the 43rd annual Governor’s Conference on Tourism
Another controversy is brewing over whether expenditures were properly authorized by a city agency.
A series of e-mails obtained by the Arkansas Times through the Freedom of Information Act reveals a long-running row between members of the Little Rock Airport Commission over money paid to firms whose contracts with Little Rock National Airport had run out — payments that may have been made without reapproval or knowledge of the full commission.
In an e-mail dated Jan. 20, Commissioner Carl Johnson told airport executive director Deborah Schwartz that he was “gravely concerned” about payments made between 2004 to 2006 to the airport financial consulting firm Unison-Maximus, even though the airport’s contract with the firm had expired. According to the e-mail, the three-year total for the payments made to Unison-Maximus in 2004, 2005 and 2006 was $83,507. Johnson said Schwartz is allowed to approve payments up to $10,000 to vendors. For expenditures over $10,000, she is required to seek the approval of the Airport commission.
Johnson wrote Schwartz that the airport had no contract and the commission hadn’t approved any new assignments, to the best of his knowledge. “If this is correct and with your emphatic and strong statement to me and the public that you had ‘zero authority [in authorizing payments over $10,000],’ then why did you authorize these payments?”
Schwartz wrote back that she had done only that which she has been authorized to do, with the full knowledge of the chairman of the commission. “I advised the chair in each of those years that we did not have a current contract with Unison-Maximus,” Schwartz wrote. “Most recently, I was instructed by former chair, Gene Fortson, not to issue an RFQ [Request for Qualifications, which precedes the opening of bids for a new contract] for financial services until after the conclusion of the most recent bond issue, and that is what I’m doing.”
Current Airport Commission chairman Larry Lichty also responded to Johnson:
“Since you have invoked my name on more than one occasion in your continuing inquisition of Deborah, let me offer my opinion of your issue,” Lichty wrote. Lichty added that the only time he recalled making a statement about continuing payments to contractors beyond the expiration of their contracts was in response to a question posed by Johnson at the previous week’s meeting, and said that he believed his response affirmed Schwartz’s answer that payments over $10,000 required commission approval. Lichty said that for “practical reasons” the airport continued payments for certain services on a month-to-month basis without the approval of the commission, “pending the issuance of an RFQ.”
“Two other examples in addition to Unison-Maximus,” Lichty wrote, “are Stephens Inc., who we continued paying until conclusion of our recent bond issue for financial services, and L. Cotton Thomas, who we have paid for accounting services, both of which are under current RFQ’s.”
Johnson said that he first started looking into the issue after the recent financial controversy at the Little Rock Convention and Visitors Bureau came to light. It turned on expenses in excess of amounts allowable without commission approval. Johnson said that since discovering the apparent no-contract payments to airport vendors, he has attempted for more than a month to get more information. He has been left, he said, feeling as if he’s getting “the runaround.”
Johnson said he requested a list of all checks to vendors in 2006, cross-referenced with a list of all firms currently under contract with the airport. Instead, Johnson said, he was provided with a two-inch-thick list showing only payments to vendors. Even with the list he was provided, Johnson said he has been able to find additional instances of large payments made without commission approval.
“Why is it so difficult for me as a commissioner to get this information?” Johnson said. “If it’s an honest mistake, then share with me the information and just say ‘It’s an oversight and let’s move on.’ ”
While Johnson said the problem doesn’t rise to the level of requiring an independent investigation like the one instituted by Mayor Mark Stodola at the LRCVB, he said that the Airport Commission should conduct its own probe. While vouching for the quality of services provided by firms like Unison-Maximus, Johnson said that payments made without commission approval amount to no-bid contracts.
“The problem is that the staff is not following the procedures and the policies,” he said. “It makes the commission look bad when something like this happens, but you’re relying on staff to keep everything following policy.”
Schwartz said that she is currently compiling a report for the Airport Commission that will answer the questions posed by Johnson and other commissioners. She said the report should be completed by March 12.
Lichty said that Schwartz is “working feverishly” to compile the information requested by commissioners and the press. On the issue of payments made to Unison-Maximus, Lichty said that while the contract with the firm has indeed expired, the commission voted to extend the firm’s services through the January 2007 completion of the latest bond issue.
“I know that we as a commission have been very stringent when it comes to following all the appropriate guidelines on financial accounting and purchase policies,” Lichty said. “Hardly a commission meeting goes by when we don’t stress that.”
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