Tuesday, July 18, 2017 by Jo Clifton

Ethics complaint filed against ex-city employee

Nathan Wiebe, chief of investigations for the Office of the City Auditor, filed a complaint with the city’s Ethics Review Commission on Monday against a retired Austin Energy supervisor.

In the complaint, Wiebe laid out a case against Stefan Sasko, who retired from his position as distribution electrician supervisor in January of this year. Wiebe alleges that Sasko violated city ethics regulations related to his participation in numerous decisions affecting Pike Electric, where two of his brothers worked.

Although auditors believe there were several violations of city conflict of interest rules, they do not allege that Austin Energy lost any money as a result of the alleged conflict.

Pike Electric is a contractor “that entered into a contract with the city in January 2016 to provide ‘transmission/distribution services and maintenance’ including installing utility poles and transformers.” Sasko was the project manager.

The complaint states, “We found evidence indicating that Stefan Sasko … electronically approved more than 1,900 documents for work performed under an AE contract,” with Pike, while Pike was concurrently employing two of his brothers. “These approvals, occurring from March 2016 to January 2017, while Sasko was a city employee, ultimately led to payments to Pike Electric of more than $8 million.”

The complaint states that auditors conducted “limited due diligence and did not find evidence indicating these transactions were inappropriately approved.”

However, under city code, Sasko would have been prohibited from participating “in a decision affecting a substantial interest of a relative within the first or second degree of consanguinity.” Sasko told auditors that neither of the brothers who work at Pike Electric has another job. “Therefore, it appears reasonably likely that Sasko’s brothers have a ‘substantial interest’ in Pike Electric,” the complaint says.

According to the complaint, Sasko told auditors that “it was common knowledge in the office, including up to AE senior management, that some of his brothers worked for Pike Electric. … Sasko stated that he did not consider his role in approving Pike Electric worksheets to be a conflict of interest because the scope of work and pay rates are defined in the contract.”

Auditors noted that they interviewed Sasko’s supervisor, who “did not see Sasko’s role over the contract as problematic, even though Sasko had brothers working there.”

The Austin Monitor could not reach Sasko on Monday. The phone number listed for him in Johnson City had been disconnected and Wiebe said auditors were only able to reach him after sending a letter in the mail.

The complaint states that as project manager over the Pike contract, Sasko’s responsibilities included the following: approving Pike Electric’s use of subcontractors for special projects; deciding whether a late penalty should be applied to invoices; and hearing appeals from Pike regarding determinations of whether work performed should be billed at an hourly rate or a lump sum.

Sasko told the auditors that he reviewed work done by employees under his supervision and that his review constituted “final approval.” He also told the auditors “that he occasionally rejected worksheets,” which are like invoices, “submitted by Pike Electric because they contained errors,” according to the complaint. The complaint also states that the auditors “found evidence that Sasko provided input in resolving disputes with Pike Electric over billing.”

Austin Energy employees told auditors that “Sasko’s approval was a necessary step in the process to pay Pike Electric for their work. We found evidence that during the period of March 2016 to January 2017, Sasko approved at least 1,939 worksheets associated with payments of over $8 million to Pike Electric.”

Auditors stated that Sasko’s most recent supervisor and other Austin Energy employees confirmed that it seemed to be common knowledge that Sasko had brothers working at Pike Electric. “We did not find evidence that Sasko disclosed in writing his possible substantial interest in Pike Electric and therefore we could not establish whether Sasko’s former supervisor violated city code by not reassigning Sasko’s responsibilities.”

According to Wiebe, the chair of the Ethics Review Commission will now decide on a date for a preliminary hearing concerning the complaint. Since Sasko no longer works for the city, it is not clear how a determination that he violated city rules would affect him.

Austin Energy spokesperson Robert Cullick told the Monitor that it had just received the complaint and would have no comment.

Photo by John Flynn.

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Key Players & Topics In This Article

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

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.

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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