Councilman's Business Deals and Golf Outings with Republic Services Invite Questions

A sitting member of the San Angelo City Council has made business deals with Republic Services within the past few years. That’s the word we received from a verified, former co-worker of San Angelo City Councilman Johnny Silvas. Fearing retaliation from his former employer, the source asked to remain anonymous.

Earlier this month, the Council approved a 10-year exclusive contract with Republic Services for trash collection and landfill management with the City of San Angelo. Silvas’ vote was essential to approving that contract in a close, 4-3 decision.

According to the co-worker, Silvas sold the backlit sign that adorns the Republic Services building on Hughes Street and another, though unlit, sign that is at the entrance to the San Angelo landfill.

Our source worked as a contract graphic artist at Horizon Branding with Silvas. “When I joined the company, we started a graphic design and printing company, too. We also sold commercial signage. Johnny sold Republic the sign for their building and the sign at the landfill. I designed both,” the artist said.

The artist was unsure about the exact date the sign transaction took place. According to Silvas’ LinkedIn profile, Silvas worked at Horizon from January 2009 until May 2013. Silvas notes on LinkedIn that he “Brought in new business to the Company!” under his job description for Horizon. Silvas probably made commissions on those sales, the artist said.

Since these sign transactions likely took place more than a year ago, the ethics of a councilman doing business in a civilian job with a vendor so long ago are not black and white, though it is probably legal.

We researched the Code of Ethics for members of San Angelo City Council, and Boards and Commissions, dated March 11, 2008 and amended June 17, 2008 for guidance. Members of city council must adhere to the policy. Under item eight of the Code, it defines a conflict of interest:

In order to assure their independence and impartiality on behalf of the common good, members shall comply with the Texas Local Government Code Chapter 176.

In accordance with the law, members shall disclose investments, interests in real property, sources of income, and gifts; and they shall abstain from participating in deliberations and decision-making where conflicts may exist.

Texas Local Government Code Chapter 176 does not require Silvas to disclose his past business dealings with Republic if more than 12 months have passed between the time of the private business transaction and the city contract decision.

We verified that the co-worker has worked at Horizon during the period in question. We could not verify his allegation that Silvas made commission off the sale of signs to Republic. If this Silvas-Republic connection had stopped there, we’d have little to report.

The Golf Tourney

Silvas was seen at a May 31st benefit golf tournament by several people. Republic manager Robert Searls was on his golf team.  The date of the round of golf is significant because May 31st was in the middle of the Request for Propsals (RFP) process. A casual outing between a city official who will ultimately decide a $450 million, 10-year trash contract with the local principal of the vendor who was in negotiations skirts the edges of the anti-lobbying provisions of the city RFP’s “Restrictions on Communications” provision. According to the RFP:

Respondents should not communicate with: 1) elected City officials and their staff regarding the RFP or Proposals from the time the RFP has been released until the contract is posted as a City Council agenda item; and 2) City employees from the time the RFP has been released until the contract is awarded.

These restrictions extend to “thank you” letters, phone calls, emails and any contact that results in the direct or indirect discussion of the RFP and/or Proposal submitted by Respondent.

Violation of this provision by Respondent and/or its agent may lead to disqualification of Respondent’s proposal from consideration.

The RFP submission date was March 14; the contract was listed on the council agenda on July 1. May 31 falls between those dates when the restrictions were in place.

 The RFP leaves room for interpretation, allowing “Private (non-business) contacts with the City by the Proposer’s employees acting in their own capacity.”  In this case, City Councilman Silvas was playing on the same four-man team during a golf tournament with not just an employee, but the Municipal Services Manager of Republic Services. What did they talk about during all of those holes of golf?

Ethical Dilemmas

We originally panned these revelations because we didn’t believe they were illegal. When the golf outing was revealed, we thought it painted a bolder picture of the challenges all city officials have with relationships with vendors, especially trash haulers.

Last July, Councilwoman Charlotte Farmer recused herself from voting on an item to allow Texas Disposal Systems to operate on city streets, after making the motion to not allow it. In the brouhaha that ensued, Farmer asked for a recess to discuss with the city attorney her concerns that she was a distant relative of the Gregorys, the principals of Texas Disposal Systems. The vote was re-taken with Farmer’s abstention.

TDS’ Bob Gregory said later that he has no idea how Farmer was related; it was news to him. Farmer intended to vote against Gregory’s request, related or not.

Mayor Dwain Morrison said that avoiding scenarios where the public can perceive a potential conflict of interest is difficult. He relayed a story about how TDS must have paid for his $7 hamburger at the Dun-Bar before he could protest. They are uncomfortable situations that you learn to avoid, he said.

Farmer noted that she avoided touring the TDS facility at last year’s Texas Municipal League convention in Austin because TDS was serving barbeque. She didn’t want to have to even approach a conflict of interest by partaking in the free lunch (Texas Local Government Code 176 does not forbid council members’ lunch or dinners to be paid by courting vendors).

Last year, Marty Self recused himself from voting on a city alarm system contract because he owns a fire suppression system company. Even though the city contract in question in no way had anything to do with his company, Self said that city staff advised him to abstain to avoid the appearance of impropriety.

Paul Alexander said that it is a slippery slope towards getting influenced by vendors who are using perks. 

"I noticed Republic officials were very generous, and in fact they are very cordial individuals,” Alexander said. “With a couple of extra seats at a local fundraising event, I was invited to tag along. I accepted. Soon, I was invited again to tour a recycling facility (in Fort Worth), which is a legit excursion regarding waste management education. However, the invitations progressed to dinners at state events we were both attending. That's when I sought advice from then-City Manager Harold Dominguez,” he said. “Harold suggested I fall back and not accept any invitations, as there appeared to be ethical implications.”

“Point is, more than anyone I encountered, Republic officials seemed astute at grooming me. I had to realize what was going on and say No to any further perk-like invitations. It's very casual, but when it comes time to vote, it's very powerful. The feeling of obligation is strong. Nobody wants to ditch a friend over a mere opinion regarding a selection process. Friends are important to people,” Alexander said.

Alexander did not attend the facility tour in Fort Worth then, and today he is a voice of dissent against the city awarding the trash contract to Republic.

Alexander also relayed a story about how Assistant City Manager Michael Dane insisted that all checks be separate when he and other members of the City Council were invited to dinner with Texas Disposal Systems executives. This was more than a year before the RFP, when Alexander was still on Council.

Whether Silvas felt that he owed Republic his affirmative vote can only be answered by Silvas himself. He didn’t return our call. To the public, however, Silvas was one of four who voted for Republic. Had he abstained, the council would have deadlocked, and contract would not have been approved..