Thursday, April 26, 2018
State auditor's report shows conflicts of interest between MODOT, Highway Patrol and a vendor
State Auditor Nicole Galloway today released a report outlining a series of questionable communications and actions by state employees that demonstrated clear conflicts of interest in administering the state's weigh in motion contract. Concerns about the nature of the relationship between a vendor and the Missouri Department of Transportation (MoDOT) and Missouri State Highway Patrol were reported in the media last spring.
Missouri, which has the nation's seventh largest highway system, uses electronic weigh station technology to allow trucking companies to bypass traditional weigh stations and provide data to the state. For the past 15 years, this service has been provided by HELP Inc., a nonprofit that contracts to utilize public resources to do business within the state. Trucking companies pay HELP, Inc. a subscription fee to use the service.
"Public private partnerships can improve the ability of the state to meet the needs of citizens, but only if the state ensures fairness and transparency on behalf of taxpayers," Auditor Galloway said. "In this case, there are clear indications of close working relationships that led to preferential treatment and conflicts of interest. That is no way for the State of Missouri to conduct business."
In 2014, Drivewyze, a competitor to HELP, Inc., contracted with the state for a pilot program to provide a similar service. However, the Auditor's report found that state employees with clear conflicts of interest showed preferential treatment to the existing vendor.
Auditors reviewed a series of communications from employees from the Highway Patrol and MoDOT, several of whom also served on the board for HELP, Inc. The communications reveal close working relationships with the private entity that cast doubt on their independence and may have led to bias in their decision making.
For example, Missouri employees attempted to influence contracting decisions in Texas, Kansas and Minnesota by advocating for one vendor (HELP, Inc.) and steering states away from competitors. In one instance, a state employee attended a conference and discussed the intention to endorse the services of HELP, Inc.
Within less than a year after leaving state employment, three state employees were subsequently hired by or contracted with HELP, Inc. Two of these former employees had business-related communications with the state, including with former subordinates.
Missouri law requires former state employees to wait at least a year after leaving state employment before performing any paid service in which they would attempt to influence decisions of an agency where they had supervisory duties. Former state employees also are prohibited from performing any paid service regarding any decision in which they were directly concerned or personally participated while they were employed by the state.
There was a further lack of transparency in these relationships because three state employees failed to properly disclose expenses paid to them on their personal financial disclosures to the Missouri Ethics Commission. In two instances, the disclosures were later amended to include board membership and expenses paid by the nonprofit.
"This report outlines years of improper communications and actions that led to one vendor being unfairly favored over another," Auditor Galloway said. "Just as concerning, is the appearance that these allegations were not taken seriously by state officials until much later as our work was bringing the details to light."
In April 2017, Auditor Galloway launched an audit after news reports and discussions with law enforcement about the issue. Missouri State Highway Patrol announced in May that an internal review was conducted and that its employees would no longer serve on the board of HELP, Inc. Audit staff were informed the review did not include a written report, but resulted in records being provided to the Attorney General's Office. There was no documentation of changes to internal policies as a result of the review.
Not until November 2017 -- while audit work was ongoing -- did MoDOT launch an internal review. As a result, in January 2018 MoDOT provided additional communications to auditors that include information not originally disclosed. In February 2018, MoDOT officials provided information to the Auditor's Office on internal actions taken to discipline employees and an update to internal conflict of interest policies.
Auditor Galloway has turned over records and information uncovered through the course of the audit to state and federal law enforcement authorities. The complete audit report is available here.