Durkan Administration Asks State to Expand Scope of Audit Into City Council Contract

By Erica C. Barnett

On Monday, the director of the city’s Department of Finance and Administrative Services, Calvin Goings, and the city’s Finance Director, Glen Lee, signed a letter to the State Auditor’s Office (SAO) asking the auditor to expand the scope of its ongoing audit of the contract between the city’s legislative department and the Freedom Project, which served as the “fiscal agent” for a $3 million project to study participatory budgeting and alternatives to policing.

However, PubliCola’s reporting indicates that the letter was written not by Goings and Lee but by Mayor Jenny Durkan’s office—and that Goings and Lee were less than thrilled to sign their names to such a blatantly political series of requests and leading questions.

The letter asks the auditor to look into three new issues: Whether the city auditor should be removed from Seattle’s legislative branch, where (according to the letter) it doesn’t have “adequate independence”; whether it was appropriate for the city council to award a “high-dollar contract … without competition to a non-profit,” the Freedom Project; and whether “laws of the state expressly authorize direct earmarked appropriations for specific entities, and if so, in what circumstances.”

The finance department does not typically get involved in political debates between the legislative and executive branches. In her seven years at the city, council president Lorena González said, “I’ve never seen a letter of this nature to an outside agency.”

In multiple instances, the letter suggests openly that the city council may have broken city and state law by granting the contract in the way it did.

Specifically, the letter suggests that by granting a no-bid contract, the council may have violated the City Charter, and that appropriating funds to a specific entity (in this case, King County Equity Now, via the pass-through contract with the Freedom Project) may have violated prohibitions on earmarks in city law, the charter, and state law.

The first point is a bit ironic, given the mayor’s history of granting noncompetitive contracts, including one to a personal friend who is married to Durkan’s then-deputy mayor.

On the second point, the letter takes a conspiratorial turn, suggesting that the council scrubbed the public record to hide evidence of misdeeds.

“[T]he original legislative documents (since revised and removed from the web), public statements by Councilmember and other records demonstrate that the $3 million dollar appropriation was for the benefit and intended to go to a specific entity,” the letter says.

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“Again, the Executive has not been directly involved in the award of [our] implementation of the contract, as it was wholly in Council’s purview. However, Council has regularly appropriated funding for a specific contractor or provider, and in this case the contract is structured as a pass-through for an entity that was not qualified for the non-profit exemption,” the letter concludes.

“It would be helpful to know whether this type of ‘pass-through’ contracting is a proper use of the non-profit exemption and whether the Executive can award contracts based on ‘earmarks’ by Council or whether doing so would run afoul of the Charter, state law or generally accepted best practices.”

City council president Lorena González told PubliCola that she does not believe the state auditor’s mandate and jurisdiction extends to the city charter or municipal code. “We are certainly aware of several contracts in which the mayor’s office has engaged in no-bid contract practices,” she added, “and it’s interesting to me that FAS didn’t highlight those as additional potential issues.”

A spokeswoman for FAS directed all of PubliCola’s questions to the mayor’s office, which did not respond to several emails seeking responses to questions on Tuesday.

The letter is highly unusual in both its tone and content: The finance department, which oversees many city contracts as well as city facilities, HR, and many other internal aspects of city government, does not typically get involved in political debates between the legislative and executive branches. In her seven years at the city, González said, “I’ve never seen a letter of this nature to an outside agency.”

A spokeswoman for FAS directed all of PubliCola’s questions to the mayor’s office, which did not respond to several emails seeking responses to questions on Tuesday.

González, who is running for mayor (Durkan will not seek reelection), called the letter a “distraction” from the issues Durkan could be addressing in the final months of her term. “I’m just confused about why the Durkan administration is spending time, energy, and resources on this letter… instead of on the real problems facing the city in the remainder of her term,” González said. “This audit was already happening, and it’s going to go through its natural course, and I don’t understand how this letter helps advance our city.”

SAO spokeswoman Kathleen Cooper said the office would treat the letter from the city like any other tip or whistleblower complaint. “We consider everything that comes our way, and if there is an issue of large enough significance … that we think it should be considered in our auditing work, even though we hadn’t included it before now, then we would consider it,” Cooper said.

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