Giving me fun things to post about that is! Wheeeee! Never thought I’d get to hang a “–gate� moniker on anything! I’m tickled; hope I’m the first to use it.

Ok, now that I’ve gotten past the silly back-patting, lets get on with some additional information and speculation about those mysterious bonuses. Early reports are often the least accurate, but some of the first blurbs yesterday indicated that the investigation actually started with a whistleblower report to the OIG’s office; in turn they came to F&A, who advised the mayor. I note that the information released by the mayor in his press conference (as much as has been broadcast or placed on websites to view) does not contradict this sequence of events, although clearly, some parties would like to leave the impression that the information flow went the other way; F&A called in OIG. From the speed of things, I think OIG got ready, then informed F&A and the Mayor’s office. Which is kind of interesting; I’m sure the Feds didn’t call up Skilling and tell him “hi, we’ll be by tomorrow to seize all the computers in your energy trading offices!” Maybe some of Chief Hurtt’s cameras could tell us if anyone dropped by the Pro-Tem’s office late that evening. Like at 3 a.m. or so.

Well, informing them was probably just to gather information from F&A’s payroll office.

Note that the most silent party in all this is the City Controller’s office—the ones who actually cut the checks. While I assume that the process is mostly automated, it says something about the lack of oversight and built-in safeguards that no alarm was raised when special checks started being cut for tens of thousands of dollars to employees. And Ms. Parker has yet to be heard from.

Why you wonder? Well, perhaps because, except for the size, it wasn’t all that unusual! I’ve been keeping my ears open and picking up tidbits here and there. One of the most interesting of these is that several years ago, there was a ‘sea change’ in how excess funds were handled around the end of the year. Like most bureaucratically-funded organizations, if a City department doesn’t spend its money, it’s assumed that it doesn’t need it, and future allocations may be reduced. So around the end of the fiscal year (June 30), departments are looking for ways to spend excess funds (should they have any) and council members’ offices were no exception. (edit: at the tail end of his show, right after I posted this, Baker suddenly speculated that maybe it was an end of the year thing, just before changing subjects to the cameras. I wonder if he’s reading this…)

In years past, the normal practice was often to call around to various departments to see if they needed anything in the member’s district. A computer at a library, medical supplies at the health department, equipment for a fire station, etc. If they did, the council member would see to it that a portion of their surplus got transferred to the appropriate department, with the understanding that it would be used for the stated purpose.

However, several years ago, that began to change. Instead, council members started handing out the excess to their employees as bonuses. They did this by manipulating the employee’s pay scale. First, the amount of the desired bonus would be determined. Then it would be calculated what the employee’s pay rate would have to be increased to (and for how long), in order to provide the bonus. Once that was done, paperwork would be submitted to increase the employee’s pay to the desired amount. This would require the signature of the council member, and all this paperwork would be routed through the Mayor Pro Tem’s office, of course, since it was in control of payroll. The increased pay would run for however many pay periods were necessary (only a few); and then new paperwork would be submitted to reduce the pay back to normal. According to what I’ve picked up, it became commonplace for yearly bonuses of several thousand dollars (per employee) to be disbursed by council members, operating through this manipulation of the employee pay system. And as I’ve said before, the former mayor paid bonuses to several high-ranking staff members during his tenure.

Mention of the budget brings another thought to light. If you have a budget, you have budget reports. And I had overlooked that these are produced every single month. The individual offices do not produce budget reports; they come directly from F&A. How much money is budgeted, what it’s budgeted for, how much of it has been spent so far, and how much of it is left. (And the “gross summary” reports I’ve had a chance to check so far do not show anything unusual. Veddy interestink, no?) The linked reports are for the whole city, and thus have far less detail than the reports for each individual office, and it is the detailed budget reports that they each recieve.

Carol Alvarado obviously never bothered to view the budget reports for the Pro Tem’s office or she would have caught the bonuses immediately. $130k had to leave a huge hole in her payroll budget. This is not a fact lost on Gordon Quan or Mark Goldberg, I would wager. And probably not Mayor White.

Forget what I said about this having the potential to get very ugly. It already is…

(I was going to let this post late this afternoon, but after listening to Chris Baker, I think it needs to go up now. Lordy, he’s an Alvarado partisan. The moment the one caller tried to point out she should have exercised oversight, he dragged her off to Enron-land.)

Update: Baker asked several questions based on this interview. Alvarado makes the same point; someone else had to be involved. She denies delegating signature authority. “No way in hell” she would give such bonuses, though she states she did give pay increases (that, by the way, the rest of us employees didn’t get).

And Baker’s definately in love with her. Thinking she’s a great person because she doesn’t leave the Astros games early? Softball questions about the split between the pro tem and council district offices? Well, he’s not a newsman, he’s a radio personality, so I’ll cut him some slack.

Echoing my comments above about how the bonuses were commonplace, Florence Watkins said in her interview:

“By the time this bird has finished singing, there’s going to be a lot of people (in trouble). They are going to look at a lot of people. We weren’t the only ones that got incentives,” Watkins said.

Also in the KTRK interview:

Officials said the investigation began after the city’s finance director received reports of payroll irregularities.

I still want to see a timeline, though.

Update 2: I had to flip channels, since I lack all the cool toys, so I only caught parts of KHOU and, I think KPRC’s stories; I missed KTRK’s. They also point out parts of the above; KHOU in particular made it sound like the bonuses were not done in a single paycheck, but were paid out over a lengthy period. In that case, I can see where the Controller’s office might not have caught it as totally obvious. Still, it seems to me an extra $1830 on one’s (normally) $2790 paycheck ought to be caught and questioned.*

Quan is openly sharpening his knife now; he talked about how he always called council members back to doublecheck the paperwork on any raises. Which makes sense–at that level you don’t want a potential ally to think you’re slighting them by stiffing their people on raises when it was just a dumb clerical error, or setting them up for trouble by tacking on additional money. It’s clear that he’s not interested in offering tacit cover to his collegue, because that ignores the point that, in this case, it would have involved Alvarado calling herself.

Additionally the bonus paperwork was supposed to go from the Pro Tem office, to Human Resources, to F&A Payroll, then to the controller’s office. So we now have another office to peer into.

*(figures are for salary and bonus of Rosita Hernandez, divided by 26 pay periods)