Ethics Review Commission finds Frank Rodriguez in violation of city ethics rules

Justice has been a long time coming in the case concerning Frank Rodriguez’s continued ties to Latino Healthcare Forum, a nonprofit he founded while serving as a senior policy adviser to Mayor Steve Adler.

After the Ethics Review Commission chose not to accept a settlement agreement presented by both parties last month, commissioners heard the case at their June 12 meeting. After five hours of arguments and testimony, the commissioners found that Rodriguez had violated city ethics rules and failed to appropriately disclose his financials. The commission voted 6-1 to find Rodriguez in violation of city ethics rules with Commissioner Robin Lerner voting against the motion.

The original complaint against Rodriguez was filed by the city auditor’s office on Aug. 3, 2018, after the Austin American-Statesman reported on emails it obtained under the Texas Public Information Act showing that Rodriguez tipped off his wife, Linda Smith, about upcoming contracts the Latino Healthcare Forum could benefit from.

Mayor Adler was the first witness at the Ethics Review Commission hearing. He testified that he was fully aware Rodriguez had previously worked for the Latino Healthcare Forum and that his wife continued to work there while he was serving as a senior policy adviser to the mayor. However, while Adler said that Rodriguez served on behalf of the city as a liaison to the Latino community and worked to sign up families for the Affordable Care Act, “I didn’t know he was receiving payments from the forum.”

Both Lesley Varghese, Adler’s current chief of staff, and John-Michael Cortez, Adler’s former chief of staff, similarly testified that they were unaware of any consultancy payments Rodriguez received from the Latino Healthcare Forum while he was employed by the city.

Ross Fischer, outside counsel for the Office of the City Auditor from Weaver, pointed out that for the period of time Rodriguez was advising the mayor, LHCF and Foundation Communities were the only two nonprofits to receive city contracts for ACA enrollment. Foundation Communities received $100,000 and enrolled 5,911 people in 2016, while LHCF received $200,000 and enrolled 168 people.

The city allows secondary employment as long as it is “not expected to impair independence in judgment or performance of city duties.” Likewise, secondary employment cannot have a substantial interest. A substantial interest is defined as having more than a $5,000 stake in any entity from which payment is received.

Rodriguez acknowledged that he had been paid by the Latino Healthcare Forum during his employment with the mayor’s office but that those payments were for the investments he made in the nonprofit when he started it. He explained that his contract “was written specifically to let everybody know about investments I had made in the organization previously.”

Fred Lewis, the attorney for the defendant, pointed out that in addition to the payments being made for work and investment made prior to his work with the city, both Rodriguez and his wife were paid from money that did not come directly from the two city contracts that were awarded to the nonprofit. Lewis confirmed with the LHCF accountant that the money paid for Rodriguez’s consultancy fees was not attached to city contracts.

Although Fischer commended the work that the LHCF was doing, he said it did not matter exactly which contract the money Rodriguez received for his consultancy work came from but simply that he was paid by a nonprofit profiting from city coffers. “What’s relevant is that your money came from LHCF. That’s what relevant under the ordinance,” he said.

Commissioner Lerner said that as someone who had held high- and low-level positions in public service and now owns a nonprofit (Texas International Education Consortium), it is the responsibility of every public servant to be conscientious of potential ethics violations in their actions. She called Rodriguez’s approach to receiving simultaneous payments from the nonprofit he founded that was receiving city contracts and the city of Austin “reckless.” “When the forum benefited you benefited, and it’s inextricably linked,” she said.

Lerner pointed out that just by holding a high-level position in the mayor’s office, Rodriguez was in a position to pass along “insider information.”

Travis Casner, outside counsel for the city auditor’s office from Weaver, argued that this information could be considered advocacy, which Rodriguez took part in when he lobbied the mayor to renew contracts with LHCF. The partnership between the city and LHCF lasted for the tenure of Rodriguez’s position with the city. Rodriguez stepped down in October 2017, citing health reasons.

Lewis said that Rodriguez has had no impact on contract decisions from his position and called the allegations “much to do about nada.”

Mayor Adler bolstered this argument when he testified that Rodriguez “did not advocate for vendors” but “provided advocacy on certain policies and certain issues.”

After a discussion over whether the violation was intentional or not, the commission settled on a letter of admonition saying that while Rodriguez was in violation, it was not intentional.

“As Austin grows we need to be very conscious of corruption not taking root here,” said Commissioner Raafia Lari.

Photo by John Flynn.

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