Let's review those deals

Earlier this week, Commissioners Court voted to review all the real estate deals they made with a couple of guys who are now caught up in a federal bribery investigation.

The Commissioners Court voted Tuesday to review all of Harris County's lease-purchase contracts for building space, including three linked to indicted developers Andrew Schatte and Michael Surface.

The county's management services office, overseen by director Dick Raycraft, will look at whether the county should exercise an option on the deals with Schatte and Surface to buy the buildings rather than continue leasing them.

County Judge Ed Emmett said the deals with Schatte and Surface's development company, Keystone Group, raise the question of whether the developers submitted winning bids because they learned of the county's needs from employees before bids were sought.

Keystone and the county reached deals on a two-part complex on Murworth Drive near Reliant Park and an annex on Old Spanish Trail.

Emmett said he assumed the FBI has made the county's lease-purchase deals part of its probe of Keystone Group.

[...]

The county will review the lease-purchase contracts even though several county officials, including Emmett, have said the agreements appear to be good deals for the county.

Emmett said the county must look at whether the deals were fair and ethical.

"Everybody should have ample access to the process," he said.

Some background on the probe and the players involved is here and here. Sure seems like this is a no-brainer to do, but is it enough?

Court members on Tuesday initially were to decide whether the county would review the $36 million Murworth Drive deals.

But Commissioner Sylvia Garcia said she wanted all lease-option deals examined because the county should not cherry-pick the ones to be scrutinized.

"Let's look at all the lease purchases in any of our departments, in any of our entities," she said.

Of the leases with Keystone, Emmett said, "Most of these deals go back 10 years. Just on the face of it, there is nothing that indicates that they go out of market boundaries."

But how do you know till you look? And given the potential for embarrassment (not to mention conflict of interest) for the county, perhaps we need an outsider to look at this. David Mincberg thinks so. Here's his press release on the subject:

On Thursday, David Mincberg called for an immediate, independent, outside investigation of all Harris County's real estate deals over the last decade. With more revelations involving former County employee Michael Surface and his business partner Andrew Schatte coming out every day there is a need for an outside analysis of every deal the County made over the last decade.

"The County must change the way it does business. The leadership of Harris County can no longer sweep these problems under the rug by calling for internal investigations. Sweetheart, no-bid contracts, special interest backroom deals must end. Harris County needs an independent investigation to clean up our County."

According to the Chronicle, since 1997, Harris County officials have approved at least eight projects, worth more than $60 million, involving Surface and Schatte. Surface and Schatte were part of an elite group of insiders who participated in most of the county's real estate deals over the last decade.

"Harris County taxpayers deserve a judge who takes his job seriously. I'm not a career politician. I'm a successful businessman who knows how to run things honestly and efficiently. At a time when Harris County government is facing political scandals, indictments, ethics violations, and resignations in disgrace, the last thing we should be doing is looking to those who created the problems to now investigate their own mess."

In case you're curious, this would mean that the November election season is officially underway. I think this is a perfectly reasonable thing to call for, and I look forward to Judge Emmett's response.

Posted by Charles Kuffner on March 20, 2008 to Local politics