Thursday, September 29, 2016 by Jo Clifton

Complaint filed against former housing director

The chief of investigations for Austin’s Office of the City Auditor filed a complaint late Wednesday against Betsy Spencer, the former director of Neighborhood Housing and Community Development, with the city’s Ethics Review Commission.

In that complaint, Chief of Investigations Nathan Wiebe alleges that Spencer knew about a conflict of interest involving one of her employees but did not take appropriate action. Specifically, he says that Spencer knew the employee was married to an employee of a nonprofit that received funding from the department, yet she failed to reassign the duties that caused that conflict.

In an audit released Wednesday, auditors identified the NHCD employee with the conflict as Regina Copic, manager of the department’s real estate division. In March 2012, she told the department that her husband was going to take a job with Habitat for Humanity, creating a possible conflict of interest.

The auditor’s report includes documents that show that she reiterated her concern in August 2012 but continued to be involved in transactions affecting her husband’s employer.

Auditors said they found evidence that Copic “participated in decisions affecting her spouse’s employer, providing a direct economic effect exceeding $826,000. Her participation continued after she disclosed the conflict of interest to her supervisor.” Auditors concluded that Copic’s participation in those decisions violated two sections of city code – prohibition on conflict of interest and substantial interest of a relative.

The complaint against Spencer says that Copic “continued to supervise an employee who considered applications for funding from the employer of Copic’s husband. Spencer was aware of advice from the city Law Department’s Ethics and Compliance team that Copic had a conflict of interest and still did not reassign matters.”

Spencer left the city under a cloud in July, so although this complaint won’t help her reputation, it is hard to see what impact it might have, given the other allegations the Austin Monitor has detailed. Her final day with the city was this week, and she has been on administrative leave since last summer.

Exhibits attached to the complaint show Copic attempting to recuse herself from matters involving her husband’s employer in writing. In a letter dated Aug. 27, 2012, Copic states, “As I advised all in March 2012, my husband Ricardo Andres ‘Andy’ Alarcon was hired as the Director of Real estate development” for Habitat for Humanity of Austin.

“As discussed, to stay clear of any perceptions of having a conflict of interest, it is in the best interest of the department that I will recuse myself in matters concerning Habitat for Humanity funding or other benefits that they may receive from our department.” She goes on to say that David Potter will receive the funding applications, and another employee, Javier Delgado, will supervise Potter.

In a letter responding to the draft audit finding that she had violated city regulations, Copic wrote, “The City Auditor’s Draft Report concludes that because I signed certain internal city of Austin forms, ministerial acts under the conflict of interest ordinance, my participation continued after she (Copic) disclosed the conflict of interest to her supervisor. Yes, I chose not to be subordinate (sic) when my department director established a structure that required me to sign forms in the chain of command knowing full well the conflict of interest I had disclosed and asked to be recused from. But nothing in the city auditor’s draft report details how signing these forms was not ministerial acts I was asked to perform, involving no discretionary decision-making on my part.”

Copic is not an executive, and therefore no complaint can be filed against her with the city Ethics Review Commission. City Auditor Corrie Stokes told the Monitor that it’s a good point if you have a conflict of interest but your supervisor doesn’t take appropriate action.

Rosie Truelove, who is interim director of NHCD, responded to the draft investigation report on Sept. 14. Truelove wrote that department management would review the report with department human resources staff to determine the next steps and will “coordinate targeted training on the City’s policy regarding ‘conflict of interest’ for all staff members.”

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Photo by Jim Allen, modified under a Creative Commons license.

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Key Players & Topics In This Article

City of Austin Ethics Review Commission: The Ethics Review Commission is charged with review of, among other issues, ethics complaints leveled against City of Austin boards and commission members. They meet quarterly.

City of Austin Neighborhood Housing and Community Development Department: This city department provides housing and community development services for Austinites. To that end, they administer programs, provide grant services, and work with non-profit and agencies to provide housing for eligible residents. The department also provides small business development services.

Office of the City Auditor: This city department is created by the city's charter in order to establish and ensure "accountability transparency, and a culture of continuous improvement in city operations."

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