Tuesday, Sept. 13, 2011 | In late 2009, Scott Fazekas became head of the city’s building division. In the 12 months after Fazekas was hired, his firm, Scott Fazekas & Associates, received the lion’s share of the city’s building plan review business, according to city records.
The records show that in nearly two years while Fazekas was Anaheim’s building division head, Fazekas’ firm went from receiving 8 percent of the city’s plan review business to more than 80 percent. All told, Scott Fazekas & Associates has billed the city for at least $18,954 since he took over the division.
Fazekas said he had no hand in the decision to send more plan review work to his own company and points to a clause in his contract with the city that bars him from being involved in outsourcing decisions.
“I wanted to make sure there wasn’t a perception of exactly what you’re talking about,” Fazekas said, referring to the writing of his contract. “We specified that I would have no involvement.”
The outsourcing decisions to which Fazekas is referring were made by staffers who worked under him. One of those staffers was Gerald Caraig, assistant building official from October 2010 until July. Caraig said he chose Fazekas’ firm only because it charged less than the other firms.
“If I have three consultants out there, one’s charging me a dollar, another one charges me 50 cents, I’m going to use the one that charges 50 cents, because that’s the best bang for my money,” Caraig said.
Yet a good-government expert said the arrangement in Anaheim at least creates the impression of a conflict of interest, especially given staffers working under a division head were outsourcing work to that division head.
“That doesn’t strike me as a healthy relationship,” said Tracy Westen, CEO of the Los Angeles-based Center for Governmental Studies. “If a person’s working for you, they may be under some explicit or implicit psychological pressure to send contracts your way.”
Fazekas and Caraig both said that the other firms were asked to lower their rates a few months ago. Other firms, however, began receiving work only since the city received requests from Voice of OC under the California Public Records Act for invoices and other documents relating to plan-check work.
Rusty Reed, president of Charles Abbott Associates, one of the other plan-check firms to which the city outsourced work, said his company began receiving plan-check work from the city three to four weeks ago.
Reed attributed the trickling workflow to his company as merely a sign of the times.
“We just didn’t think much of it, because we just assumed work was down everywhere,” Reed said.
The Trail of Bills
In the 12 months leading up to Fazekas’ hiring in September 2009, contract firms billed the city more than $60,000 for plan-check work, according to city invoices. Fazekas’ firm received $4,621 or 8 percent of the total.
According to invoices for nearly two years after Fazekas was hired by the city, the total amount billed plummeted as the recession took its toll on the building industry. But $18,954 — more than 80 percent of the total amount billed — went to Fazekas’ firm, the records show.
What remains unclear is why, if Scott Fazekas & Associates was the least expensive firm, it did not receive the majority of the work before Fazekas was named head of the building division, which is an arm of the planning department.
Fazekas and Caraig both said they did not know the answer.
City officials who might be able to explain unanswered questions about the situation — including City Manager Thomas Wood, Planning Director Sheri Vander Dussen, Mayor Tom Tait and Councilman Harry Sidhu — did not return phone calls seeking comment.
Despite the apparent conflict, Fazekas argues that he was not Caraig’s boss. Responsibilities were split between the two officials, Fazekas said, with Caraig having exclusive oversight of plan-check work in the division.
“There wasn’t a direct chain where he had to answer to me,” Fazekas said.
Caraig has the same explanation. “My direct report was not through Scott [Fazekas], it was to Sheri [Vander Dussen]. Scott and I were peers in that regard.”
But Fazekas also acknowledged that, as head of the division, he held the ultimate authority on issues such as code interpretation. He also said that he worked closely with the planning director and wielded influence on matters like division organization.
Clauses in Fazekas’ contract also point to a position of direct authority. One of Fazekas’ responsibilities was to “delegate appropriate duties to full-time city staff,” according to his contract.
Westen said the procedure in Anaheim shows how outsourcing city services can result in muddy oversight and a lack of accountability.
“Who oversees the adequacy or fulfillment of the contract?” Westen said. “Does the boss report to the assistant? That doesn’t sound healthy either.”
He added that “he [Caraig] could be the worlds’ greatest assistant and it never occurs to him to send work to his boss. But the natural public impression would be there is a conflict of interest.”