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Tech Changes Inflated Courthouse Cost

By Mike Gallagher
Copyright 2007 Albuquerque Journal; Journal Investigative Reporter
    Metro Court administrator Toby Martinez signed off on four proposed change orders in the spring of 2003, adding more than $3 million to the cost of video arraignment and technology systems for a new court building.
    That was on top of $4.2 million already set aside for those systems.
    But the huge price increase for one piece of a courthouse project that was over budget and behind schedule isn't the only thing that makes those documents stand out.
    They are labeled as proposals but a records search didn't turn up subsequent formal change orders authorizing the added cost. Further, the documents didn't have the signature of other officials who normally sign change orders, and they didn't describe the work or the reasons for it.
    Taxpayer money spent under the proposed change orders, involving work by two companies awarded contracts without competitive bidding, appears to be at the heart of the federal criminal case against Martinez, his wife Sandra, engineer Raul Parra and former State Sen. Manny Aragon, D-Albuquerque.
    A grand jury indictment alleges the court's video arraignment system and other technological systems were milked for more than $3 million in an illegal scheme.
    Parra, Aragon and the Martinezes have pleaded not guilty. Trial is set for next year.
    A Journal review of documents provided in response to a records request shows Martinez signed the documents. But they don't have signatures of the chief judge, architect, consultant or project manager as required on normal change orders.
    Chief Judge Judy Nakamura said she had no recollection of seeing the documents in question until now and said they are unlike any she reviewed or approved.
    "Normally, everyone had signed off on the change orders before they were sent to me," Nakamura said in an interview.
    "We have searched everything in the court's possession and have found nothing to support those change orders."
    The Journal's review of the records supports that statement. The documents differ physically from formal change orders, but a records search by court officials turned up no follow-up paperwork properly implementing the changes.
    Typical change orders signed by Nakamura and reviewed by the Journal had been approved by the architect, consultant, contractor, and project administrator before she signed off. They also contained details of what the work was for.
    Nakamura didn't become chief judge until April 2002, well into the project. Meanwhile, two Metro judges who had been on the court building committee had left, along with a key consultant. Their project knowledge and expertise went with them.
    Three of the proposed change orders were signed by Martinez shortly before he was fired in June 2003 over domestic violence allegations that were later dismissed.
    They are in contrast to hundreds of other change orders on the project, which were signed by the appropriate officials and most of which were accompanied by lengthy and specific explanations.
Cost nearly doubled
    The cost of Metropolitan Court's video arraignment and technology systems jumped by more than $3 million between April and June 2003— but that hardly raised eyebrows in a project that came in eight months late and nearly $40 million over budget.
    The original budget for the project in 1998 was $46.5 million. By 2003, almost $63 million in bonds were financing construction. That didn't include direct legislative appropriations.
    By the time the building and an added parking structure were completed, the cost was around $83 million.
    The initial contract amount for first-class communications and technology systems was $4.2 million.
    The systems were designed by a Chicago-based consulting architectural firm and a New York technology firm. They estimated the cost, including installation, at $3.8 million.
    That estimate, in 2002, was for a system that included video screens for judges and jurors, closed-circuit television in 20 courtrooms, a video conferencing system and a host of other gadgets.
    Estimates for less expensive systems were as low as $1.9 million.
    By the time a no-bid contract was signed with Integrated Control Systems Inc. of Albuquerque in November 2003, the price had crept up to $4.2 million.
    Then came the proposed change orders submitted by Integrated Control Systems Inc., the primary contractor for the technology systems, and approved by Martinez. They pushed the cost to more than $7.5 million.
    The documents in the court's file authorize the increase in cost but don't indicate what was to be added to the project.
    They were signed only by Martinez and ICS president Steve Chavez.
    Martinez attorney Billy Blackburn was unavailable for comment, according to his office staff. Integrated Control Systems has declined repeated requests for comment.
    ICS is mentioned in the indictment, but no charges were brought against the company or any of its officials.
Inflated invoices
    The out-of-state companies that designed the technology and video systems weren't involved in selecting the contractors.
    Martinez originally prepared a request for proposals based on the out-of state companies' recommendations, but ICS was selected without going through a competitive bid.
    It was awarded the job under state procurement regulations that allow a government agency in some cases to use a company without going to bid if it has an existing state or federal government contract for the same type of work.
    ICS at the time had a federal contract to do "small scale building automation, mechanical systems and electrical systems installation and optimization projects." The company also had an agreement to do miscellaneous short-term operations and maintenance support work.
    According to court construction records, Martinez used the contract to "piggyback" the court's technology and audio-video contract to Integrated Control Systems.
    After ICS was awarded the contract, it hired Datcom Inc., owned by Manuel Guara, to work on the system.
    Guara has pleaded guilty in the federal case.
    Court records say his role was to submit inflated invoices to ICS, which in turn submitted the invoices to the court for payment.
    The indictment said Datcom was paid more than $4.7 million.
    According to the indictment and plea agreement, Guara said he was recruited for the scheme by Parra, head of an engineering company called P2RS.
    Guara wrote checks totaling $3.5 million to Parra and also signed over three checks to him that had been made out to Datcom from ICS for an additional $86,140, the indictment said.
    Guara was also a member of the board of directors of P2RS, according to state court records.
    Records show at least one potential competitor considered getting involved in the job but decided not to because he suspected something was amiss. That contractor alleged he could have done the job for substantially less than the estimates.
The big picture
    Overall, the grand jury alleged the court construction project cost taxpayers $4.2 million in money siphoned off to contractors, administrators and politicians.
    The federal indictment alleges Parra received more than $770,000 from the project, Aragon more than $700,000 and Martinez and his wife Sandy more than $2 million.
    In addition to the money allegedly funneled from the video and technology systems, the grand jury also charged there was a system of kickbacks involving the project architect, Marc Schiff; lobbyist and former Mayor Ken Schultz; Martinez; and Aragon.
    The kickbacks were allegedly paid with money from phony invoices that involved about $1 million.
    Schultz and Schiff have pleaded guilty.
    Attorneys for Martinez and Aragon had no comment.