Potential conflict over BART manager’s ties
A manager at BART failed to disclose ties to a construction management firm awarded a $40 million contract that the manager helped broker, the agency’s inspector general found.
In a report released Friday, BART Inspector General Harriet Richardson urged the agency’s management to seek outside counsel on whether BART should void the remainder of the contract in light of the potential conflict of interest.
According to Richardson, neither the manager nor the firm disclosed that the former used to be employed by the latter, and that the manager’s spouse and sibling still work at the firm. The lack of disclosure could force BART to void $27 million remaining in the contract and forego paying the firm $5.4 million in unpaid invoices for previous work.
“The BART manager’s relationships create a potential financial interest in the contract, which is against the law,” Richardson said in a statement.
Neither the manager nor the construction firm was identified in the inspector general report, though a Los Angeles Times report identified the latter as San Francisco engineering firm PGH Wong, which helped oversee BART’s expansion to north San Jose.
The agency issued a stop-work order in February after it was first made aware of a potential conflict, the Times reported. The BART manager in question was the “agreement manager” for the contract awarded to PGH Wong in 2020, but did not disclose that the manager’s spouse worked at the firm or that part of the spouse’s annual compensation benefits from the firm’s contracts with BART, according to the report.
The potential conflict of interest is partly the result of a “lack of clear guidance and training for employees regarding conflict-of-interest disclosures,” Richardson said.
BART’s management agreed to implement most of the report’s recommendations that included requiring training employees better and permanently reassigning work related to contracts with PGH Wong to another manager. Management resisted the request to use outside counsel.
“After an exhaustive review of the situation, management believes all agreements, work plans and invoicing with this firm are fair and reasonable,” BART management said in its response. “Management is of the opinion that no financial interest was realized by the employee or the firm.”
While the spouse has been removed from working on BART-related projects, the report urged BART to seek outside legal advice and proactively void the PGH Wong contract. “The penalties for not voiding the contract could be even more punitive for the firm and BART if it is later confirmed that a violation of (state law) did indeed occur,” the report said.