in Houston, Texas

The controversial nonprofit offshoot of the Houston Airport System has released its financial records to City Controller Annise Parker after a protracted standoff in which the nonprofit claimed it was not subject to open records requests.

At the same time, Mayor Bill White's office says a top lieutenant -- Chief Administrative Officer Anthony Hall -- is no longer heading an internal review of the offshoot, citing a "conflict of interest."

These moves come in the wake of a series of Texas Watchdog articles questioning the transparency of the airport system and looking at a spiderweb of for-profit, off-shore spinoffs created by that nonprofit.

The nonprofit in question -- the HAS Development Corp. --  is a tax-exempt entity formed in 2001 with the OK of the City Council and then-Mayor Lee P. Brown. It has been under scrutiny by the mayor’s office since May, when airport system head Richard Vacar abruptly resigned.



The HASDC’s annual financial reports, which had initially been denied to the mayor’s office, the city controller and at least one City Council member, were released Monday to Parker's office. Three reports were sent by e-mail from HASDC attorney Hank Coleman, and one more was delivered by an agent of the corporation, an office spokeswoman said.

Open government advocates, such as Peggy Venable, head of the Texas branch of Americans for Prosperity, said they were happy at the release of the records.

"Like any other quasi-governmental agency, it should be subject to open records laws," she said. Venable added that there is a line when cities do business with private companies; a private company's entire records are not subject to transparency, but any work done on behalf of a public entity should be.

HASDC was created to manage and advise airports in other countries using the expertise of both its own employees and employees from the Houston Airport System. White has criticized the arrangement, at one point stating that he was concerned about a "revolving door” between the airport system and HASDC.

The spinoff, sometimes citing its ties to the Houston Airport System, has also created a web of companies both in the U.S. and abroad. Its refusal to give up records has created a scenario in which it is unclear what kinds of public resources, if any, have flowed into the nonprofit.

Added to this confusion are differing accounts of just who has what records and who is doing what kind of investigating of HASDC and its ties to the city.

Review being handled by third party

In a letter accompanying the release of the financial documents to Parker this week, Coleman notes that the records “were provided to the Mayor three weeks ago on June 26.”



But as late as last week the mayor’s spokesman Patrick Trahan told Texas Watchdog, in response to requests for HASDC financial records, that the mayor’s office did not have the documents.

On Wednesday, he explained that the records likely went directly through his office to a third party that is reviewing the HASDC financial records for the city.

The mayor initially said in May that the review would be conducted by Hall. A group of business experts is now conducting the review, according to the mayor's office.

“For Mr. Hall to do this would be a conflict of interest,” Trahan said. “Anthony is not doing the review.”

Texas Watchdog has additional questions into the mayor's office concerning what the conflict might be and who, specifically, is conducting the internal review.

Hall is the official who signed off on a trip by Vacar to Libya earlier this year, using a $10,000 business class ticket.

HASDC had rebuffed several requests for information, maintaining that it is an independent corporation and not subject to the same open records requirements of a public body.

Texas Watchdog filed several open records requests for financial and structural information since Vacar’s departure.

In a letter to the Texas attorney general denying Watchdog’s records request, HASDC asserts that it has entered into confidential business agreements in its work managing and developing airports in Ecuador. Complying with the request, it maintains, would violate those agreements.

This week, though, HASDC turned over audited financial statements for years 2004-2005, 2006, 2006-2007 and 2008.

The documents were released following several Texas Watchdog articles highlighting the HASDC's resistance to make its finances public and the mayor and controller's offices frustration.

Growing assets

The reports show a company with slowly growing current assets, moving from $421,199 in 2004 to $1.7 million in 2007. The holding interests by the HASDC are also shown; with Corporacion Quiport, it holds 25 percent, in ADC & HAS Management, it holds a little more than half interest. Both firms have close ties to HASDC.

It also shows that Corporacion Quiport, which manages Mariscal Sucre airport in Quito and operates the construction of Quito's new international airport, has total assets of $385 million in 2007, and ADC & HAS had assets of $1.2 million.

The city’s investigation of the structure of the HASDC is scheduled to be complete by the end of the summer.

Contact Steve Miller at stevemiller@texaswatchdog.org or 713-980-9777.


This investigative report by Texas Watchdog is licensed under a Creative Commons Attribution 3.0 United States License

Photo of Monopoly game pieces by flickr user mtsofan, used via a Creative Commons license.

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