Conflict claimed in air quality audit

Wednesday, Jan. 24, 2001 | 11:10 a.m.

The head of a committee charged with finding a company to do an audit of a controversial pollution-control program says Air Quality Division employees misled him to promote a company with close ties to regional governments.

Jack Greco, chairman of the three-person ad hoc committee, said division employees pushed for the selection of Las Vegas-based Hobbs, Ong and Associates, a financial consulting firm. Greco said Tuesday that the company's officers and work history create a conflict of interest for the sweeping audit of the division's emissions-reduction credit program.

The committee has formally recommended Hobbs, Ong to do the audit, but Greco said Tuesday that he is withdrawing his endorsement.

Environmentalists also are criticizing the company's selection, arguing that the company isn't the independent voice that a state legislative subcommittee demanded when it ordered the audit last year.

The Clark County District Board of Health, the policy board that oversees the Air Quality Division, is scheduled to select the company to do the audit Thursday morning.

The division employees did not reveal that the company has close ties to Clark County government, which indirectly funds the Air Quality Division and the emissions program, Greco said.

Hobbs, Ong's principals include Guy Hobbs, a former chief financial officer for Clark County, and Katherine Ong, a former budget director. Dale Askew, Clark County manager, is the company's resident agent.

Greco said the firm's work for the Southern Nevada Home Builders Association creates an additional conflict of interest. The Air Quality Division enforces rules that can affect home builders.

Hobbs said, however, that he sees no conflict of interest because of the company's relationships with the county or the home builders.

"Past experience (with local governments) should be a positive, not a negative," Hobbs said.

No one has questioned the skill or reputation of the company, but Greco said division employees did not give his committee adequate time to evaluate several different bids for the auditing contract. If they had, Greco said, he would have favored another proposal.

Environmentalists are crying foul for another reason, saying Hobbs, Ong is in the process of doing another audit of the health district's Air Quality Division.

The emissions program has been a frequent target of criticism from environmental activists.

The program grants Las Vegas Valley companies the authority to buy, sell or trade the right to put pollution into the air in return for reducing pollution in other areas. For example, a company might reduce carbon monoxide pollution by 2,000 tons, then sell the right to put 1,000 tons of the same pollutant into the air to another company.

The program is an important tool in the Air Quality Division's arsenal to reduce pollution emissions, administrators argue. But environmentalists charge that the program allows companies to put pollution into the air with the sanction of the health district.

In October a state legislative subcommittee asked for a thorough analysis of the program. That subcommittee asked that a company with no history of work for the district do the audit.

Hobbs, Ong is now doing a cost analysis of bringing together the Air Quality Division and the air quality specialists working for the Clark County Comprehensive Planning Department.

Christine Robinson, Air Quality Division director, said the recommendation to hire the company for the emissions program audit meets the mandates of the legislative subcommittee, because the agency that hired Hobbs, Ong to do the present work wasn't the health district, but the Southern Nevada Regional Planning Coalition.

"Their scope of work for the cost analysis (of the proposed merger) is very nuts and bolts. There are no judgments involved," she said.

But the emissions program audit "is one of the most, if not the most, comprehensive scopes of work that I have ever seen," Robinson said.

"Every piece of information we had about the companies was presented to the subcommittee," she said. "I am obligated to bring that recommendation to the (health) board."

The health board will need to evaluate the conflict of interest charges, she said.

Robinson said she wants a strong, independent audit.

"If the board wishes to continue this program as it exists today, I will continue to request an extensive, comprehensive audit of this program," she said. "I want to resolve issues."

The program has had "problems of perception for many years," she said. "We don't need to add to that. I want to pick the best consultant based on the qualifications of the firm."

Robinson said she believes Hobbs, Ong is the most qualified.

Jessica Hodge, Las Vegas-area organizer with the Sierra Club, said the company doesn't appear to be the independent firm that legislators demanded.

"This audit could have significant impacts on a lot of industry in Las Vegas," Hodge said. "There seems to be obvious ties here to Clark County.

"I have a concern that they're not following what the committee asked them to do, to have the most comprehensive and objective audit that they can do," she said.

It is a concern shared by state Sen. Dina Titus, D-Las Vegas, a subcommittee member who asked that the company hired for the audit be independent and not have a history with the health district.

"It will make me look very carefully at the results (of the audit), and it's unfortunate because it will make some people very skeptical of the results," Titus said.

Hobbs said Tuesday that the work for the Regional Planning Coalition, which should wrap up within several weeks, and the possible work for the health district is very different in scope, and for different agencies.

Independence "is one of those things that is in the eye of beholder," he said.

Robinson said Hobbs, Ong is a strong candidate to do the audit because it is local and understands the issues affecting the program.

But the company also would be working with other companies from outside the valley to do the audit. Hobbs said the company's effort would include "a fairly deep team" of other companies for the analysis.

But Hodge, who said the Sierra Club will protest the recommendation at Thursday's meeting, said an outside company might be better.

"We need an independent audit, and we mean really independent," she said. "I don't know why there would be any advantage to have a local company."

A company with no direct ties to Las Vegas would be more objective, Hodge said.