SALEM — A $1 million management audit of the Oregon Department of Transportation may not address how well the agency avoids conflicts of interest in awarding project contracts.
Gov. Kate Brown ordered the audit at the request of state legislators who want to ensure ODOT is operating effectively before they approve costly transportation funding next year.
That legislation — one of Brown’s priorities as governor — could hike gas taxes and fees on drivers and funnel hundreds of millions of dollars in additional funding to the agency. Among lawmakers’ concerns were instances when ODOT hired or kept contractors who appeared to have conflicts of interest.
While state officials who designed the scope of work for the audit included a question about how conflicts are identified, they did not ask for an assessment of how much weight ODOT employees give conflicts in the process of recommending contractors to the Oregon Transportation Commission, which officially hires the contractors.
It’s unclear whether the omission was an oversight or was discussed and then rejected, said Bret West, acting chief administrative officer at the Department of Administrative Services. West, who has overseen the ODOT audit for the state since May, said he was not involved in shaping the original work plan for the audit.
Other questions in the work plan dealing with communication processes and transparency may help to reveal whether there are problems with conflicts of interest, West said.
In September, the state awarded a nearly $1 million contract to New York-based McKinsey & Company to conduct the audit.
Before McKinsey won the contract, state officials had hired John L. Craig, a former ODOT contractor, to perform the audit. Ironically, the state later revoked Craig’s contract after revelations about his close ties with ODOT and an unearthed email showing he had sought to replace the agency’s director, Matt Garrett.
Addressing the weight ODOT gives conflicts in hiring contractors should have been part of the plan, said Mike Hollern, a member of an oversight committee that helped shape the audit’s scope of work.
“In one of the early drafts, there was some discussion, and I think some of the concerns from some of the legislators perhaps had to do with conflicts of interest being a seriously-investigated, dealt-with issue,” said Hollern, who also is a former state transportation commissioner.
In another example of conflicts at ODOT, an agency trucking official Gregg Dal Ponte took a job with a firm that sells products to the industry he regulates, according to a report in June by the Portland Tribune.
Dal Ponte headed the agency’s motor carrier division while working for a New Zealand corporation called ERoad. ODOT officials insisted the arrangement complied with state ethics law, but the practice has raised questions about the agency’s credibility, the Portland Tribune reported.