Jacksonville council auditor and ethics director clash over Kerri Stewart investigation - Florida Politics

Jacksonville council auditor and ethics director clash over Kerri Stewart investigation

Kerri Stewart, the chief of staff for Jacksonville Mayor Lenny Curry, spent much of 2016 under the cloud of an ethics investigation.

During a previous stint with the city, Stewart served as chief administrative officer for Mayor John Peyton. While serving in that role, a lobbying group – Infinity Global Solutions, known during the period in question as “Agency Approval and Development” – got a contract in 2007.

The agreement with what would eventually become the current IGS started as a purchase order in March, 2007 for $85,000, and over the years, expanded to a contract with amendments that grew to $953,000.

The deal was for consulting. It was a no-bid contract. And Stewart ended up working for IGS after leaving city employment, before coming back to the mayor’s office.

This raised questions for a private citizen, which spurred a report from the council auditor as part of what would become an ethics investigation.

Meanwhile, the ethics director, Carla Miller, cast some doubt as to the integrity of the council auditor process.

“I have been told that the Council Auditor’s report did not involve taking any statements from any of the interested parties,” Miller noted. “That is typically how they do it, though — paper audits. Whereas, the IG’s office takes sworn statements.”

As one might expect, Council Auditor Kirk Sherman defended his process, clarifying what he saw as misconceptions and misrepresentations in a December memo to council members.

“I feel a response is necessary, because some statements made by the ethics director and [Stewart’s] attorney were inaccurate and misleading. Ideally,” Sherman wrote, “the ethics director would have discussed the specifics of our audit with me to avoid issuing correspondence requiring my response.”

Sherman takes issue with a number of Ethics Director Carla Miller’s findings.

For starters, Sherman dinged Miller for not acknowledging that the original complaint came from a private citizen, rather than the council auditor’s office itself.

“Our audit report never alleged that any ethics code provisions were violated,” Sherman wrote.

In a conversation with FloridaPolitics.com Friday morning, Sherman said that he wished Miller had reached out to him before crafting a perfunctory memo that was “almost like two pages of notes in her file.”

“I would have had the courtesy of at least having copied me,” Sherman said, noting that the only reason he got a copy was because he was on the TRUE Commission email list.

Sherman also takes issue with Miller issuing sole “blame” to the procurement division for the ever-expanding consulting contract.

The contract and the amendments that led to ballooning costs, Sherman said, were authorized by the housing division, the mayor’s office, the general counsel’s office, and the finance office.

Sherman’s report provides documentation signed by Stewart, authorizing four $100,000 expenditure requests (the maximum allowed without legislation) on May 27, 2011. This date was after the election of Alvin Brown as mayor, with John Peyton closing out his term.

Wight Gregor, who was director of the Housing and Neighborhoods Department and who was also investigated in this matter, issued a memo in early June – with Peyton still mayor – to “increase the maximum indebtedness to the city by $400,000.”

What did the city get for that money?

Sherman told us he saw “nothing tangible delivered” in the “flawed … sole source” deal that ballooned almost tenfold from its original $85,000 scope in just a few years.

The projects in the Northwest Jacksonville district – which included community center renovations, bleachers for a park, building improvements at the Community Rehabilitation Center (which has its own interesting history), and renovation of a vacant medical building – were “not colossal projects,” said Sherman.

Whereas a big-ticket project such as the courthouse might merit investing several hundred thousand dollars into bringing in $5 to $10 million in grants, the work that IGS was doing wasn’t on that scale, Sherman said.

For the kind of investment the city made, “brick and mortar” or “drawing up plans” might be appropriate, but “$400,000 toward lobbying doesn’t make sense” – especially in context of these funds being for capital improvements.

Also concerning Sherman: the lack of transparency in the IGS reporting.

“I didn’t see any reports,” Sherman said.

IGS did provide timesheets in response to the investigation, and we reviewed them.

The going hourly rate from IGS: $110 an hour, which – month after month – seemed padded with extended meetings with city employees, staffers, and stakeholders to discuss what seemed to be big picture concerns.

On at least one project, IGS billed beyond the scope of the contract.

Multi-hour meetings with people like former Councilwoman Denise Lee and Paul Tutwiler, “research” of various components of the projects, and three-hour phone calls with employees of the Community Rehabilitation Center – all of these were billed at the $110 rate.

And even at that rate, IGS was able to pad its billing. The lobbying outfit assessed 85 percent of invoiced hours for “overhead and administration” and another 10 percent for “profit” – leaving aside the question as to how much “overhead” is involved in city hall meetings by lobbyists who are ensconced in the building.

Sherman notes that the city council and the mayor’s office, in 2016, approved an ordinance reimbursing the district account for “ineligible expenditures.”

The matter, at least in theory, is closed.

The news cycle on this story has come and gone. IGS is still lobbying the city of Jacksonville. Stewart is still serving as chief of staff.

However, there clearly is some room for improvement in communication between the office of the council auditor and the ethics director, as their disparate takes on what happened with these allocations and this process suggest.

For her part, Ethics Director Miller offered the following in an email responding to Sherman in December.

“Please read my  report to the Ethics Commission; I did not make any ‘findings.’ I just summarized the citizen Complaints and the letter from the attorney that I had received.

“The Ethics Commission did not have jurisdiction to make any findings as the statute of limitations had run. They dismissed the case for that reason and did not delve into the merits of the case.

“I stand by the recommendation in my report that the procurement processes noted in the audit, especially as to capital improvement projects, should be reviewed by the Office of the Inspector General for ‘better practices, safeguards and procedures’.”

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