The Regional Transit Authority is investigating one of its contracts and providing records to local and federal law enforcement authorities, and a lawyer representing the agency’s chief executive says the investigation involves work performed without board approval.
The one-year contract with Metairie-based BRC Construction Group to perform construction support services was initially worth $250,000, but through a series of change orders and amendments grew to nearly $1.3 million. It's not clear how much of that additional spending was approved by the board.
After becoming aware of the contract's spiraling value, the RTA board on Jan. 23 authorized an outside lawyer, Michelle Craig of Transcendent Legal, to conduct the investigation, the scope and findings of which are unclear. The resolution authorizing it says “the board has questions” concerning a September amendment that it approved that raised the value of the contract. A separate resolution rescinding the amendment has been introduced but not yet voted on.
The contract, invoices and a related internal audit have been turned over to the offices of U.S. Attorney Duane Evans and Orleans Parish District Attorney Jason Williams. It's not clear whether officials believe the matter needs to be investigated criminally, or whether they sent the materials to law enforcement agencies out of an abundance of caution.
Evans declined to comment, or to confirm or deny receiving the materials.
A spokesperson for Williams said his office "received a referral from the RTA Board of Directors regarding possible criminal conduct by a contractor."
Without clear evidence that a crime had occurred, the spokesperson said: "Our office appropriately referred the RTA’s report to agencies with the present ability to provide recourse," including the Louisiana Legislative Auditor and the Attorney General's Office.
RTA spokesperson David Lee Simmons declined comment.
Lawyer Bill Aaron, who represents RTA chief executive Lona Hankins, said the dustup “involves the conduct of a former employee who basically authorized work to be done, but that employee had not gotten approval from the board.”
“The big issue was they didn’t dot the I’s and (cross) the t’s,” Aaron said. “As to whether or not some nefarious or illegal activity occurred, I have no idea and have not seen any evidence of it.”
Aaron, who declined to name the employee who authorized the work, said Hankins, who became CEO of the transit authority in March, did not have direct authority over the work or over the employee who authorized it. He said Hankins immediately notified the board upon learning of the discrepancy.
The agency’s former CEO, Alex Wiggins, signed the initial contract and resigned nine months later. Wiggins said Thursday he didn’t remember signing the contract and didn’t know anything about it.
A lawyer for BRC, Andre Maillho, said the RTA owes the firm $918,000 for work it has already completed, and that his client was blindsided by the resolution authorizing Craig’s investigation. Maillho said the RTA has refused to provide the company any information about the inquiry.
“We have had multiple phone calls, emails and a meeting with RTA personnel, and have asked the question at every opportunity. We have received no response,” Maillho said.
Maillho added that an RTA representative told him that BRC is “an innocent bystander” to internal conflicts at the agency. He declined to identify the RTA representative.
BRC was initially contracted to perform general maintenance and construction support in March 2022. That work eventually morphed into constructing bus shelters in New Orleans East and at the downtown transit hub at Basin Street and Canal Street. Over time, the contract ballooned to five times its original value.
Maillho said the total work performed under the contract amounts to more than $1.73 million, even though RTA documents show the latest revised contract amount is $1.27 million.
?When questioned by the board at a committee meeting in August, Hankins said that additional money was needed for emergency work such as repairing termite damage at the Carrollton facility.
“The first year was a baseline year. We didn’t really have an idea of how much we would spend,” Hankins said then.