Houston airport nonprofit forced to reimburse taxpayers

Story Highlight

	Nonprofit arm of the Houston Airport System forced to reimburse taxpayers
	Audit of the nonprofit going on now

The nonprofit arm of the Houston Airport System has been forced to reimburse the city between $10,000 and $15,000 the nonprofit spent trying to drum up business in other countries -- bills that were initially paid out of public coffers.

The repaid funds were originally spent under an agreement between the airport system, which is part of the Houston city government, and the nonprofit HAS Development Corp., through which the airport system builds and runs airports in other countries including Ecuador and Costa Rica. The agreement allowed Houston airport workers to spend time working on the foreign projects, provided the city was reimbursed for 180 percent of the the labor cost.

But work done by the nonprofit for "business development" was not part of that reimbursement policy under airport system director Richard Vacar, who left his post in May.

“So it becomes a policy question,” said Hank Coleman, general counsel for the nonprofit, often called HASDC. “Should the contract between (the airport system and) the HASDC cover business development? Rick’s view was that since HAS got the 80 percent multiple on the other billing, it justified authorizing people to do some business development.”

But when Vacar left, Coleman said, media reports, including those from Texas Watchdog, questioned the business development policy, and both former Mayor Bill White and interim HAS director Eric Potts saw what they perceived as a problem. As White dug in to get some answers, the HASDC initially refused to turn its records over to the city before relenting.

Coleman said the issue is also one of politics, and that both White and Potts, while probably doing the right thing, also have other motives. Potts, for instance, "would like to be the director of HAS," Coleman said.

“They are answering it politically," he added. “So they have gone back and are trying to find every hour that was ever spent benefitting HASDC that wasn’t charged. Turns out it should have been charged…”

Reached by phone Monday evening, Potts declined to speak to Texas Watchdog.

Audit focused on 'accurate reimbursement'

An audit of the reimbursements from HASDC began in October when Mayor Annise Parker was still city controller. KHOU-TV reported on it last month.

“The audit has started, and we will let the auditors do their work,” said Janice Evans, a Parker spokeswoman. “It is not a top-to-bottom review, but it is all about accurate reimbursement.”

The current oversight work is being done by the audit department of the city controller’s office. The findings will be reported April 5, said Chris Brown, spokesman for new City Controller Ronald Green.

He added that the scrutiny of the HAS-HASDC relationship was prompted by media coverage, including that of Texas Watchdog.

"And going forward, these kinds of issues will be streamlined so that they don't happen again," Brown said.

Parker, as city controller, was a critic of the arrangement between the HAS and the HASDC, which was spotlighted in a series of stories by Texas Watchdog.

In a July 27 letter, Parker told then-mayor White that her staff was working to determine whether HASDC should be considered a “component unit” of the city, subject to inclusion and review for the city’s annual financial report. Parker later declared that the nonprofit was not a component unit but vowed to “monitor” the relationship between the city and HASDC.

Coleman said, "The HASDC position is, you find something, and we'll pay it. What has been sent to us has been paid within 72 hours."

Contact Steve Miller at steve@texaswatchdog.org or 832-303-9420.

Photo on home page of a Lufhansa jet taking off from Bush Intercontinental Airport provided by the Houston Airport System.

Photo of a plane by flickr user emrank, used via a Creative Commons license.



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Zaid Corrales Thursday, 01/21/2010 - 11:54AM It is great, at USA,exist justice, and most important honesty; we lost principles in Ecuador. Can you accept a new airport project with an innitial budget of TWO HUNDRED MILLION DOLLARS actually is above SEVEN HUNDRED MILLION, and initial proposal terms of time, "magically" changes from 25 years to 35 years of agreement, 10 years extra of net incomes above 100 million yearly?? they build its new airport without license of FAA or another international authority; neither with enviromental license of Ecuador Government. Really I am happy about TEXAS and USA people because nobody is obove law. Congratulations and try to help us to discover this huge scam.

Zaid Thursday, 01/21/2010 - 11:54AM Again congratulations!!!