Public Watchdog.org

Is It Fraud, Or Is It Negligence? (Updated)

03.04.13

Back in the 1970s the Memorex company ran a commercial that featured legendary singer Ella Fitzgerald singing a note that cracked a wine glass.  Followed by the recording of her voice on Memorex audiotape also cracking a wine glass.

The tag line of the ad was: “Is it live, or is it Memorex?”

That advertising slogan came to mind in a slightly different way as we were reading the 03.04.13 Agenda Cover Memorandum from Fire Chief Mike Zywanski about the latest developments in the City’s spending of approximately $150,000 on 5 portable defibrillators to replace the current ones used by the Fire Dept.’s paramedics – even though it never followed the competitive bidding process contained in Section 2-9-9 of the City Code.

The tag line of this deal: “Is it fraud, or is it negligence?”

As we pointed out in our 02.18.13 post, “Competitive Bidding…Who Needs It?“, purchases of this type over $20,000 are supposed to go through a competitive bidding process to help ensure that no City official sells their influence over a procurement process using public funds..  But this one didn’t; and the more we looked into why it didn’t, the kinkier the deal looked to us.  And the two perpetrators of what appears to be this kinky deal are none other than Chief Z and Acting City Mgr. Shawn Hamilton.

We first became suspicious of this deal when Chief Z tried to push it past the Council in January, notwithstanding that the federal grant funding that was being counted on to cover a big chunk of the cost of the replacement units did not come through.  In arguing for immediate purchase notwithstanding the funding failure, Chief Z made it sound like the current devices were so undependable they were putting the health and safety of the City’s residents in jeopardy – until, under pointed questioning by Council Finance Chairman Ald. Dan Knight (5th), he admitted that the current devices were fully functional and posed no danger to Park Ridge residents.

Our suspicions became more pronounced when Chief Z represented (on the third page of his 02.06.13 Memorandum to Hamilton) that “[c]urrently, there are four major manufacturers of critical care Cardiac Monitors/Defibrillators for Paramedic Field-Use” and that the Fire Dept. staff engaged in “side-by-side” comparisons of the comparable equipment from those manufacturers before choosing the Zoll Medical Corporation unit as “the preferred unit” of the Department – based on “unit design, features, ease of use, unit weight, portability and training required to transition to the new unit” – but could not/would not produce a copy of the evaluation/testing report or notes requested by Knight.

Even more suspicious was Chief Z’s failure, in that Memorandum, even to identify any of the other brands that were tested as part of the “evaluation,” or to provide any benchmark specifications for the replacement units and each brand’s scores measured against those specs. 

But it wasn’t until we saw Chief Z’s 02.14.13 Memorandum to Hamilton in which Chief Z stated that since August of 2009 there have been only 2 “major competitors in the market” (Zoll and Medtronic), with newcomer Philips Medical “just introducing…a new product in the marketplace,” that this deal began to actually smell.

How could Chief Z and his staff have tested/evaluated the equipment from two or three other manufacturers besides Zoll if there was only one other competing manufacturer?  

Interestingly, it looks from his 03.04.13 Agenda Cover Memorandum like Chief Z tried to end-run the competitive bidding requirement by utilizing the “Government Purchasing Cooperative” exception to purchase the Zoll units.  But that after-the-fact attempt at back-filling failed because the best price from the co-op for the Zoll units was $25,000 more than the quote he got directly from Zoll.

We’ve questioned Chief Z’s integrity and judgment since he sat mute at The Horseshoe in May 2011 while Mayor Dave Schmidt demanded to know who locked the City into a set of negotiating “ground rules” which , among other things, required that the negotiations between the City and the firefighters union be conducted in secrecy, and placed a “gag” on City officials to prevent them even from talking publicly about the offers and counteroffers until after an agreement in principle had been achieved.

Only two weeks later, after then-city mgr. Jim Hock was given an opportunity to look into how those “ground rules” came about, did Chief Z finally come clean and admit that not only did he bind the City to those “ground rules,” but that he actually proposed them!

Whether Chief Z’s (and Acting City Mgr. Shawn Hamilton’s) blatant disregard for the City’s bidding requirements for such a significant contract is an attempt at outright procurement fraud or just boneheaded negligence remains to be seen.  But that question will only be answered if the City Council stands up for the taxpayers and holds up this deal until Chief Z and Hamilton come clean – this time not about Chief Z’s kinky labor negotiations procedure but about why this procurement deal seems to be cooked to favor Zoll.

If the Council doesn’t do that job, the aldermen will be ignoring the competitive bidding process of the City Code.  And they will be selling out the taxpayers that they have taken an oath to serve and protect.

Worse yet, they will be acting more and more like typical Illinois politicians.

UPDATED (03.06.13): At Monday night’s Council meeting – beginning at 00:35:00 of the meeting video and ending at 00:51:12 – was the Public Safety portion of the meeting dealing with the continuing sage of Chief Z’s blatant disregard of the City’s competitive bidding rules in an attempt to get the City to spend $150,000 on new monitors/defibrillators for its paramedics from one particular source: Zoll.  And, once again, this deal looked so kinked up that the Council voted 6-0 (Ald. Marty Maloney absent) to send it back to the Public Safety Committee.

Why?

Because Chief Z admitted that he had nothing to do with the “subjective and opinion-based evaluation” performed by other Fire Dept. staff members back in 2009.  According to Chief Z, back then there were four manufacturers from which to choose, but Monday night Chief Z said he thought there were only three manufacturers today…until, under questioning from Mayor Schmidt, he acknowledged that there could be still other manufacturers who have come into the monitor/defibrillator marketplace since 2009.   And apparently no Fire Dept. employees did any research into the performance records or reports of those competing 2009-vintage machines since…wait for it…2009.

The more Chief Z tap dances around this deal, the dumber and/or kinkier it looks and sounds – and that even goes for Chief Z’s admission, under more Schmidt questioning, that a 3-month or more deferral of this equipment purchase until a real evaluation can be conducted will not endanger the public in any way.  That’s quite a bit different from the panic he was understatedly peddling just a month or so ago.

So while this misbegotten purchase has been properly delayed yet again, we continue to wonder why oh why nobody – not Schmidt, not ACM Shawn Hamilton, and not any aldermen – aren’t discussing the City’s competitive bidding requirement and how this particular purchase can possibly be exempt from it.  Maybe somebody around The Horseshoe will eventually wake up and ask that question of Chief Z and ACM Hamilton.  And with a little luck, they may even have an answer.

What’s the Vegas line on that?

To read or post comments, click on title.

8 comments so far

You can’t expect accountability from somebody who has an entire building, with only 2 other people , to remain that far removed from City Hall , and the correlating oversight that would accompany a sensible move.

EDITOR’S NOTE: What Chief Z appears to have done with this particular procurement matter should never have occurred, irrespective of whether he was locked away in an entire building by himself or jammed into a cubicle amid hundreds. It was, in a nutshell, either too stupid or too kinky for someone making that much money and having that much responsibility.

And as soon as last night’s meeting video is posted on the City’s website, you can see and hear for yourself just how out-to-lunch Chief Z was in response to questioning about this boondoggle from Mayor Schmidt and the Council – it would be funny if it wasn’t so disappointing and frustrating.

I can see where mistakes were made, but nobody personally benefited from this acquisition. Not following policy and procedures maybe a performance issue, I wouldn’t go and stretch it to fraud and / or negligence without further information. Now if the department received a rebate for making these purchases, you could start thinking about wrongdoings. If nothing illegal happened and it was not following the proper protocol, that is a whole different issue.

Or what am I missing???

EDITOR’S NOTE: What you’re missing, for starters, is that Chief Z and his staff totally disregarded the City’s competitive bidding requirement for purchases of this type over $20,000.

Second, if “the department received a rebate for making these purchases,” at least the City would have gotten the benefit of that bargain. But, even then, it would be problematic because they still did not go through the required bidding process.

And that’s assuming no individuals got any personal benefit from violating the bidding requirement. Which is one of the reasons for the bidding process in the first place.

So if I take your post as true, it leads to another question. Can’t the Mayor get anything right?? I mean the Chief reports to the city manager and the city manager was picked by Schmidt. In fact Schmidt is trumpeting that fact because of Hamiltons retail background…..of course what exactly that is produced so far in Hamiltons term is questionable at best.

As always you love to play this game of what if. You pick your enemy and it lands at their feet (in the case the chief) but it stops before anyone you are for gets burned.

How about this? Let’s have one city manager per month!! We can just have the Mayor be the interviewer in chief.

EDITOR’S NOTE: Are you really this stupid, or are you obtusely trying to make some point?

Other than Hamilton’s apparent failure to catch and deal with Chief Z’s blatant disregard of the City Code’s bidding requirement, what else has Hamilton done or not done in the past 7 months that makes him a bad pick, or Schmidt an incompetent for recommending him for hiring?

You are two funny. You write a post about something that is at the least a significant error and you intimate that people may be benefiting personally by this decision. we all know what that means. This is ultimately the City Managers responsibility. Add this to your post of 12-10-12 where you say the following….”When Hamilton was hired as the ACM, we expressed hope that his “varied background in banking and management consulting” obtained in the private sector might create a “new paradigm for how the City is managed and City services administered.” But it only took a couple of months for Hamilton to demonstrate his own ability to act secretively and play politics to the taxpayers’ detriment”……along with….”This latest bit of game-playing by Hamilton again reflects poorly on his management ability, and raises a red flag about his integrity”. So I am stupid or obtuse for reading what you posted??

As an aside the Mayor states on his website….”I recognized the need for a renewed focus on Economic Development at the staff level by seeking a new City Manager who had a private sector and finance background”. So that City Manager has had the job for 7 months. What has that experience yielded in the area of economic development??

EDITOR’S NOTE: Thanks, but we’ve got plenty of really target-rich comedic (or tragic, depending on your perspective) material to work with.

But, yes, “stupid” or “obtuse” would appear to describe a comment such as: “How about this? Let’s have one city manager per month!! We can just have the Mayor be the interviewer in chief.”

To the extent it appears that Hamilton is clueless on this matter, that’s unacceptable – especially where it involves what should be a $150,000 competitively bid purchase. But your complaining that Hamilton has no notable economic development accomplishment after 7 months on the job is silly in light of what little his predecessor accomplished in over 4 years – or the EDTF in 1 year.

PD:

Again you are too funny!!! You admit that Hamilton has not accomplished anything in the ED area but you justify it by comparing it to what his predecessor did in 4 years?? I guess Shawn can sleep well tonight knowing he still has over a 36 month cushion. Interesting how you talk about running government like a business and the importance of private sector experience. I got news for ya. In the private sector saying he has accomplished nothing but he did it in less time compared to his predecessor does not fly!!

But here is where I really see as a problem. The Mayor obviously knows this is going to be a campaign issue so he address it on his web site. First, he talks about the task force. By the way, I am glad you linked to the report so I could at least see who is on the the task force. It is such an important task force they were formed in 2011 and yet are still not on the task force tab on the city web site, but I digress.

You yourself have written extensively and questioned the results produced by the task force. So here is another question for ya. If one of the big reasons that the Mayor says he hired Hamilton was a renewed focus on ED, why is it that Hamilton was not in some way involved with the EDTF?? No offense to the man listed on the report but he is from community development. If Hamilton had all this experience why not put him on the task force? That would be a great way to show the businesses you want to make progress and a great way for him to meet businesses and learn the environment. Did he even go to a meeting or two??

This was the second big thing the Mayor says he did for economic development – hire the ACM. “I recognized the need…yada…yada and picked ….private sector….yada”. Except that nothing has been done in this area over the last 7 months since the guy was hired. Wait, I forgot. There is one thing. The Mayor and Hamilton agree they need to hire a person to do the job (120K++) so I guess we got that going for us!!

EDITOR’S NOTE: This really isn’t all THAT funny.

In the 7 months he has been here Hamilton has had to: (1) get himself up to speed on a job that was so neglected and performed so poorly by his predecessor that the Council unanimously voted to sack him – notwithstanding a ridiculous $130,000 severance obligation; (2) interview and hire a new finance director; and (3) help that new finance director put together the draft 2013-14 budget. We’ll cut him some slack until the budget process is completed – and we’re pretty confident he’d get at least a similar period of time in the private sector as well.

We’d guess Schmidt didn’t put Hamilton on the EDTF because the EDTF had already been working for more than half its planned 12- month duration before Hamilton was even hired, so sticking him in a process mid-stream would be…wait for it…stupid, especially where the Community Development guy was already on-task. But why don’t you show up at South Park tomorrow night, or at City Hall next Thursday (3/14) and ask the mayor the question?

Finally, we have never heard or read about either Schmidt or Hamilton say that the City needs to “hire a person to do the [ED] job (120K++),” so you might want to add that to your question list for Schmidt as well.

Or you could ask Ryles, but you could save yourself some time by just asking Howard Frimark, Paul Sheehan or Dick Barton.

Ok…so he is on the record as having been against getting the of the economic director postions, no?? I mean he says that on his website, right?? I mean he even says that “failing was one of the MAJOR reasons that the CIty Manager was replaced”….right?? I got the 120K figure from your post so forgive me if it is wrong (perhaps the ++ was a bit much but I was thinking about benefits). I will also concede that they may be able to hire a new person for less than 120.

Is it just me or is there some tap dancing going on here?? He never wanted to get rid of the ED position and that caused 2 years of business being ignored and now he wants to hire someone but you say he has never said it?? I mean you worte a piece on this and he posted on the thread and said he disagreed with you. OR is this a different person he wants to hire even though he says he disagreed with getting rid of the ED position?

EDITOR’S NOTE: It’s probably just you.

You keep saying that this purchase needs to be competitively bid, so why aren’t the mayor, the council, or the city manager saying antyhing about that? The way your treating it it’s a slam dunk violation.

EDITOR’S NOTE: We have no idea why the mayor and the Council aren’t raising the bidding issue, unless they’re just distracted by Chief Z’s boneheaded/duplicitous mishandling of the procurement process to date. But irrespective of the mayor and the Council, ACM Hamilton should not be MIA on the bidding issue, so we can’t wait to hear his explanation if/when it finally hits his radar.

The question has been asked, I think it was by Knight originally and then more recently the Mayor. It revolves around the whole issue of the notion that there was some “evaluation” (or bid/competitive process that could be “evaluated”) of the Zoll equipment the Chief was looking to buy versus some other manufacturers equipment.

As we learned the “evaluation” took place long ago and was “subjective and opinion-based”, which in other words means there wasn’t really a legit evaluation. Meaning the January 2013 request never should have come to the Council and Hamilton or the new finance director should have stopped it.

The lack of a legit evaluation or competitive bid process is one of the many reasons that this whole matter has been sent back to square one. And now back at square one should one expect a competitive bid process… you’d sure think so.

Finally, this whole episode does beg the question of how the City purchases on an overall basis and one would think Hamilton, who should be embarrassed by this whole episode, will make sure things are done properly on a go forward basis.

EDITOR’S NOTE: That just about sums it up, although we will continue to reserve further judgment on Hamilton until we see if, and how, he responds to this bidding question. As for Chief Z, however, he must have been a positive maestro with a fire hose – because as an administrator he gives “terrible” a bad name.



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