in Houston, Texas

Houston inspector general probing Councilman Stephen Costello's engineering work for city; firm inked $1.7m contract two months before Costello elected

Wednesday, Mar 23, 2011, 11:47AM CST
By Steve Miller
Houston City Hall

Houston City Council member Stephen Costello and his engineering firm's ongoing contract with the city are under investigation by the city’s Inspector General’s office, records obtained by Texas Watchdog show.

 

Costello Inc. signed a $1.7 million contract to fix water lines in the Memorial Plaza, Shadywood and Regency Square areas of the city in October 2009. He was elected to council in December of that year.

 

Costello, chairman of the city’s Flooding and Drainage Committee, did not return a call, but a representative of the councilman defended the contract, which Costello disclosed on a conflict-of-interest filing last February.

 

(Editor's note: See update to the story by clicking here.)

 

"He had said that if he won, he would not go after city contract work, and he has not done so," said Kathryn McNiel, a consultant to Costello. When he won the bid, Costello had no idea that he would win, McNiel added.

Stephen CostelloCOSTELLO

But opponents of a long-term, $8 billion city drainage project known as Renew Houston, which will be paid for with new fees on property owners, question Costello's close ties to the engineering and construction trades.

“We had seen enough information throughout this process of Renew Houston over the months that raised questions about Costello’s role,” Dave Welch, executive director of the Houston Area Pastor Council, said. “His support for Prop 1 financially and the overlay between his professional work, and we wondered if he had any current active contracts with the city. It turns out that he does.

 

"And we aren’t sure that he should be able to have a stake in setting our taxes when it could benefit him.”

 

It's not clear whether Costello's contract just creates the appearance of a conflict or constitutes a violation of ethics rules.

 

A passage in city law speaks strongly to the issue of council members getting city business: City Council members shall not "be pecuniarily interested, directly or indirectly, in any contract let by the city, or in any work done by the city, or in any matter wherein the rights or liabilities of the City of Houston are or may be involved."

 

However, a mayor's office spokeswoman said she "believed" the investigation had been completed and found no wrongdoing, but the office could offer no further documentation of that at press time. A phone call to the city attorney's office was not returned.

The investigation stems from public comments during one of a series of community meetings this year about the implementation of Renew Houston, which was approved by the voters in November. The meetings were attended by Mayor Annise Parker, who, along with Costello and a large portion of the city's engineering firms, advocated the plan.

Parker was met with a series of questions concerning the tax implications of the measure, and about Costello’s engineering contract. The mayor confirmed the investigation in an email to Welch. Shown the email, the mayor's office confirmed its legitimacy to Texas Watchdog.

Welch's group and others have said that churches and local schools should be exempted from the drainage fees, just like they are from certain taxes, and state legislation has been proposed to carve out an exception for those groups. The mayor has said she believes everyone should pay.

 

Shortly after his election, Costello became an advocate for Renew Houston, which appeared as Proposition 1 on the ballot. He was joined in his support by a number of local engineers who had collectively made more than $12 million from the city in the previous five years for their work on city projects.

 

Costello loaned $80,000 of his own money to the Renew Houston effort, and Costello Inc. donated another $11,889, according to election records.

 

The plan will levy a tax on residents and businesses to fix infrastructure in the city, including water lines and streets. City council members have not yet decided the exact fee rate, but during the runup to the referendum backers said it would cost the average homeowner about $5 a month.

The city in December announced a new inspector general, Robert Doguim, who came armed with a revised ethics policy at the behest of City Attorney David Feldman. Parker issued an executive order on March 1 outlining the responsibilities of the inspector general’s office.

***

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


Keep up with all the latest news from Texas Watchdog. Fan our page on Facebook, follow us on Twitter and Scribd, and fan us on YouTube. Join our network on de.licio.us, and put our RSS feeds in your newsreader. We're also on MySpaceDiggFriendFeed, NewsVine and tumblr.


Photo of Houston City Hall by flickr user J Jackson Photography, used via a Creative Commons license.

Comments
Be the first to post a comment.
Video
KTRK: On Big Screens for Billionaires, Comptroller Susan Combs Silent
Related Blogs and Media
KPRC ND Deborah Collura leaves for WCNC Charlotte Deborah Collura leaves KPRC and Post-Newsweek news gigs for general manager role at WCNC Charlotte Deborah Collura From the old...
Update:2 months 3 weeks
Mike McGuff
Perry and Dewhurst: signs of the times Rick Perry went all out against Ted Cruz for David Dewhurst in 2012 when Dewhurst was seeking higher office. A mere two years later, Perry...
Update:2 months 3 weeks
Rick Perry vs The World
Signs Herald Kirby Dr. Funeral Bars’ Impending Doom Renderings and reports of a giant mixed-use development that would swallow up the entire block on the west side of Kirby Dr. between...
Update:2 months 3 weeks
Swamplot
Potential civil liability for failing to comply with Prison Rape Elimination Act Check out written testimony to the Texas House County Affairs Committee from Texas Criminal Justice Coalition policy attorney Elizabeth...
Update:2 months 3 weeks
Grits for Breakfast
Daily Demolition Report: Altoona Switch Swamplot’s Daily Demolition Report lists buildings that received City of Houston demolition permits the previous weekday. Dig deep into...
Update:2 months 3 weeks
Swamplot
The Rice Hotel’s New Owners; Making Munger St. Sparkle Post Properties Sells Historic Rice Hotel Building to Trammell Crow-Related Entity; Greystar Will Manage Apartments [Prime Property] FMC...
Update:2 months 3 weeks
Swamplot
Sex offender registration shouldn't include 'kidnapping' in child custody disputes At the Austin Statesman, Chuck Lindell reports ("Texan with no sex crime history protests 'sex offender' label," May 3) that two members of...
Update:2 months 3 weeks
Grits for Breakfast
T-Squared: Our Spring Membership Drive Today is the first day of our spring membership drive. It may seem indistinguishable from...
Update:2 months 3 weeks
Texas Tribune
Fort Bend ISD Board Trustee Albright Questioned In Campaign Sign Theft Yvonne Larsen A Fort Bend Independent School District Board Trustee was questioned by City of Meadows Place police early Saturday morning...
Update:2 months 3 weeks
Big Jolly Politics
Mark McCaig: Sid Miller’s Lies Caught on Tape Throughout his campaign for Agriculture Commissioner, former State Representative turned lobbyist Sid Miller has not constrained himself to...
Update:2 months 3 weeks
Big Jolly Politics
Tweets
Karen Townsend | 1 year 11 months
"Patrick F. Kennedy is a career foreign service officer" - http://t.co/GOrCe0IS
Peter Corbett ✈ | 1 year 11 months
I'm at McCarran International Airport (LAS) w/ @almacy http://t.co/KvmId07i
KERA Public Media | 1 year 11 months
TONIGHT at 7pm on KERA TV: Presidential Debate: Learn more at PBS NewsHour. http://t.co/Z9kYdun8
PBS MediaShift | 1 year 11 months
Tech Snafus Make Bill O'Reilly/Jon Stewart 'Rumble' More of a Stumble http://t.co/4OfeBlrG (@kegill | @pbsmediashift) #rumble2012
Will Sullivan | 1 year 11 months
Great addition, been burned too much by bad subs. "Google Play Announces Free Trials For In-App Subscription Services" http://t.co/TOLgRVak
TxDOT | 1 year 11 months
I-35W/North Tarrant Express #constantcontact http://t.co/QDzrQumu
keyetv | 1 year 11 months
Serial shotgun robbers suspects arrested. http://t.co/ka8T4U9B
Karen Townsend | 1 year 11 months
Aren't State Dept career people suppose to be non-partisan? Not the political appointees, the career people. #Libya
© 2014 TEXAS WATCHDOG and USELABS. All Rights Reserved. Terms of Use and Privacy Statement