Sunday, January 31, 2010
Feds Probe 'Buckle Up' Media Blitz
By Colleen Heild
Copyright © 2010 Albuquerque Journal
Journal Investigative Reporter
The final weeks of May 2004 saw a major advertising push to get New Mexico drivers to buckle up.
Now, nearly six years later, the FBI is looking into how the state spent hundreds of thousands of federal and state dollars on that "Click It or Ticket" media campaign.
At the center of the inquiry is a national Democratic media consultant who is already facing state criminal charges related to a different federally funded advertising contract he was awarded by the Secretary of State's Office in 2004.
Consultant Armando Gutierrez has pleaded not guilty to 50 counts, including money laundering and fraud, in that case brought by the state attorney general. Trial is set for July.
The new criminal inquiry at the state Department of Transportation coincided with an internal audit that discovered a number of irregularities in the hiring of Gutierrez's New Mexico firm for the seat belt campaign.
Records reviewed by the Journal show:
• Gutierrez's firm received more than double the maximum compensation specified in the original procurement documents.
• A Kelly Services temporary employee apparently helped select Gutierrez's firm, managed the project and approved his firm's invoices.
• The contract was issued by the New Mexico Department of Tourism, not the NMDOT.
• Gutierrez was selected the day after the deadline for submitting proposals.
• A formal contract wasn't approved until after most of the work was done. In requesting retroactive approval, Tourism Department officials cited "rare and exceptional circumstances" apparently related in part to a deadline for spending the federal money.
U.S. Attorney for New Mexico Greg Fouratt wouldn't confirm or deny the federal investigation this week, but the NMDOT acknowledged it had received two subpoenas.
The NMDOT said it would not make the subpoenas public "because doing so may interfere with an ongoing investigation." The department also refused to release its internal audit, saying the report and associated materials were "being delivered to the New Mexico Attorney General for review and possible action."
Gutierrez's attorney, J. Miles Hanisse, said Friday, "I'm not going to comment on a pending investigation that we're not privy to."
In its review, the FBI has focused on billing records submitted by Gutierrez to support about $171,000 in TV and radio advertising spots purchased for the "Click It or Ticket" promotion, which began May 17, 2004. Ads ran for more than a month, invoices show.
Gutierrez, 62, is a former Democratic National Committee ad-maker who worked for Gov. Bill Richardson's campaign in 2002.
His firm won more than $7 million in advertising and marketing contracts from 2000-04 from the state Attorney General's Office under Patricia Madrid and the Secretary of State's Office under Rebecca Vigil-Giron, both Democrats.
The amounts involved in the Richardson administration's seat belt advertising contract are modest by comparison. It is the circumstances that have drawn attention.
Records reviewed by the Journal offer this chronology:
• The NMDOT in January 2004 abruptly canceled its multiyear contract with advertising agency Rick Johnson & Co., which originally was hired by the administration of Republican Gov. Gary Johnson. No reason was given in the cancellation notice.
"We were disappointed because we thought we were helping them get good results and doing some good work for them," Rick Johnson CEO Erik Lohmeier told the Journal recently. "But we've long ago learned that state government functions in mysterious ways, and we just have to kind of roll with the punches."
• Two months later, the NMDOT entered into a "professional services agreement" with the Tourism Department to "conduct statewide media buys to air messages ... to increase seat belt use."
One NMDOT memo stated such an agreement was necessary because Richardson had designated tourism as the "lead agency to coordinate statewide advertising." Since that 2004 procurement, the NMDOT hasn't run another advertising contract through the tourism agency.
• The agreement between the two agencies specified that $172,000 would be available for the seat belt campaign. The RFP put out to advertising agencies stated the "total budget through June 30, 2004, may be equivalent to $200,000."
The contract finally signed three months later — after the campaign had mostly run its course — capped the firm's compensation at $452,000. Invoices submitted by Gutierrez totaled about $441,000.
A. Gutierrez & Associates was one of five companies to submit proposals.
Records provided by NMDOT and tourism show Gutierrez enclosed no prior sample and didn't offer specific advertising ideas, unlike several other vendors. He cited past work history for clients such as the University of New Mexico and the Department of Health.
"Let's get busy," his proposal stated.
At the time, his firm was ending a four-year contract with the AG's Office to conduct a consumer awareness campaign — a job that began with a $150,000 contract that was amended six times to total more than $1.1 million.
His work for Vigil-Giron, which began in the fall 2004, involved a $6.3 million voter education campaign. For each campaign, the amount to be paid to media outlets for advertising time was included in the cost. However, federal auditors couldn't account for more than $3 million of the voter education spending and Gutierrez wasn't required to submit detailed invoices.
That contract is the basis for the pending criminal charges.
In selecting Gutierrez for the seat belt campaign, one tourism official wrote that his proposal showed expertise and was "well-written, thoroughly explained and conveyed a deep understanding of the target audience."
One of the three people listed as serving on the selection committee was identified as Christine Thomas. She was assigned to the NMDOT from April 7, 2003, to Dec. 28, 2004, as a temporary worker from Kelly Services and was employed as a technical writer, records show.
She became "project manager" of the seat belt campaign. She reviewed invoices, and at one point was authorized by the NMDOT to "pick up the (pay) checks" for the Gutierrez firm, agency records show.
The professional services contract finally awarded in June 2004 after a "retroactive approval" was short on specifics to be delivered by Gutierrez. It required "a media plan, meetings as necessary, final report, artwork in digital format, copies of ads placed in various media, i.e. TV, Radio, Print, Billboards, etc."
The Journal asked to see copies of the ads and artwork Gutierrez was supposed to submit, but the NMDOT couldn't produce any.