FBI asked to probe consulting deal

Adrienne Packer

Tuesday, Feb. 19, 2002 | 10:52 a.m.

A Las Vegas Housing Authority board member said Monday he has submitted a formal complaint to the FBI over a contract involving Clark County Commissioner Dario Herrera.

Board member Dewain Steadman said bureau officials told him they will review whether housing authority Executive Director Frederick Brown violated the Hatch Act when he agreed to pay Herrera $3,500 a month to provide consulting work.

The federal Hatch Act prohibits executives of some public agencies from engaging in partisan politics while in office.

At issue is the political relationship between Herrera and Brown.

Brown was a member of Herrera's campaign exploratory committee before Herrera, a Democrat, announced his plans to run against Sen. Jon Porter, R-Henderson, in Nevada's 3rd Congressional District.

"The Hatch Act clearly states what you can and cannot do," said Steadman, who planned to inform his colleagues of the investigation during the Housing Authority's board meeting, which began at 9 this morning.

The Housing Authority was closed Monday. Brown and Herrera were not immediately available for comment this morning.

In November Brown awarded an $84,000 public relations contract to Tribeca Media, which splits the work with Herrera Communications Group. The agreement was made without the housing authority board's approval or knowledge, board members said.

According to the contract, Herrera's role is to provide government affairs consulting and organize community forums for the housing authority, which provides housing for low-income residents and senior citizens.

Although Herrera said he has organized events and provided "overall communications strategies" for the agency, board members said they have seen no evidence of his work even though the agency has written him five checks totaling $17,500.

According to invoices obtained by the Sun, the first $3,500 check was written for government affairs consultant work beginning Oct. 1 -- more than a month before Brown signed the contract.

Steadman isn't the only board member calling for an investigation.

Commissioner Simhan Iyengar said that until questions about the contract are answered he wants to halt discussions about Brown's merit pay raise, which was scheduled to be addressed during a meeting today.

"I want an investigation of how this happened, why it happened and when it happened," Iyengar said. "I don't approve of the contract and will ask that it be rescinded."

Steadman said housing authority commissioners passed a new policy four years ago that requires board approval for any expenditures of more than $25,000. The public relations contract required the board's vote, he said.

Brown, however, has said that a policy amendment made last summer says once a budget line item is approved he has the authority to award contracts without returning before the board.

Although no other housing authority in Southern Nevada has retained firms to handle public relations, Brown said the contract was necessary to smooth over relationships with Las Vegas officials who have criticized his agency.

Commissioners question why Brown needed professional consulting to improve working relationships with the city when Las Vegas Councilman Michael McDonald is a housing authority board member.

"Why would we as a board want to give Dario Herrera a contract to improve relations with the city of Las Vegas when we have a City Council member on the board?" Steadman said.

Board members also wondered why a high-priced contract was given to Tribeca Media -- owned by former city of Las Vegas employee Lucie Melchert -- just seven months after the company was formed. Melchert and Herrera are the sole employees of their companies.

"Why did we hire a firm hardly seven months old when there are big, very powerful public relations firms available?" Iyengar said. "How can (Brown) use his own discretion and give the contract to whoever he wants and use public taxpayers' money to do it?"

Steadman and Iyengar said the money spent on the contract could have bought one more housing unit for the authority. They said they would not have voted to use funding already in demand for public relations purposes.

Steadman said the contract will be reviewed today, but it isn't likely it will be rescinded.

"Our hands are tied until the investigation is finished," he said.