The Latest in Lauderdale Lakes Financial Mismanagement Drama: Another OIG Report, A Threatened Lawsuit, and Criminal Complaints All Around

​The situation regarding the financial management of the City of Lauderdale Lakes is a complicated one. But while two reports from the Broward Office of the Inspector General have yet to be finalized, there's one thing that's clear: There are no good vibes coming out of that city.

The OIG delivered two reports to the city last week -- the first, which was leaked to blogger Chaz Stevens and later written about here, documented the ridiculous ways the inspector general found that Lauderdale Lakes was messing with budget numbers -- allegedly inflating estimates, inventing fictional funds, stealing from other agencies, and, in one case, bouncing a $1.2 million check to the Broward Sheriff's Office.

The Sun-Sentinel got hold of the second report early this week; moving on from the alleged transgressions of former Finance Director Larry Tibbs, this report focuses on current Lauderdale Lakes City Manager Jonathan Allen, who, with a letter dated one day after the second

report, threatened to sue Stevens. The letter threatened Stevens with action for a laundry list of offenses if he did not "cease, desist, and stop your collective efforts." That's as specific as it got; it's presumably a reference to Stevens blogging about the city.

So, of course, Stevens used the information in the OIG report (and more) to file a criminal complaint against Allen yesterday. The last I'll say about that particular tussle is that it's the first letter to the State Attorney's Office I've seen that uses the term "booyah" and the phrase "(golden) shower of ineptness."

The other criminal complaint in this whole mess was filed by the city against Tibbs, according to the Sun-Sentinel, for extortion relating to emails that Tibbs reportedly sent threatening to expose damaging information if he's not paid money he's owed.

Now that you're all up to speed, here's what the Broward inspector general says Allen has been up to.

It's all about contracts -- Allen, the report says, "engaged in intentional bid splitting and other misconduct to undermine procurement controls, and to improperly authorize a contract for the management services of a former city employee."

That former employee was former Lauderdale Lakes Public Works Director Manny Diez, currently an employee of ADA Engineering, which has contracts with the city.

The bid-splitting was to get around a city ordinance that prevented Allen from awarding contracts for more than $25,000 without approval from the City Commission. Diez's quote to act as temporary director of public works was $61,000 for 17 weeks -- working part-time. To get around the restriction, Allen told Diez to essentially break up the work into bills that were less than $25 grand.

The first bill ended up being for about six weeks of work; when the OIG interviewed Allen, he said that "he was not aware that the contract would exceed $25,000," according to the report, "despite the existence of the original proposal and without reason to believe the timeline had changed." In an OIG interview, he said the initial $61,000 bid was "merely a draft."

The other factor standing in Allen's way when it came to hiring Diez was the competitive bidding process -- Allen said the city was in "dire circumstances," and to avoid it, the OIG says, Allen framed the deal as an extension of an engineering contract from 2006 for drainage services. The OIG found that stormwater runoff was not really all that related to being director of public works.

Allen told the Sun-Sentinel that he got approval for the deal and "was following appropriate city purchasing policies and procedures." The report says he totally wasn't, and an email to Allen, Diez, and others from Lauderdale Lakes Purchasing & Contracts Manager Diane LeRay makes it clear that "the total amount of the proposal exceeds that of the City Manager's authority." (The email is on page 7 of the report, included below.)

The commission did eventually approve a separate $42,000 payment to Diez last August, but that didn't include money Allen had already dished out. In all, it cost Lauderdale Lakes $64,700.52 to have a part-time director of public works through the end of September -- that's almost $159 per hour from a city that, if the previous OIG report is any indication, doesn't even have enough money to pay its police.

If $159 per hour sounds high to you, it's because it is -- for comparison, when Diez was the salaried director of public works between 2005 and 2007, he made about $45 per hour.

Putting Diez in charge of Lauderdale Lakes public works also meant putting him in charge of contracts that his own engineering firm has with the city -- and with recommending what future city projects might be needed. It doesn't take an investigation to see the "both real and apparent conflicts of interest... In contracting with his favored vendor instead of conducting a competitive solicitation, Mr. Allen violated not only the [city] Code, but also basic tenets of good public policy."

And this conflict was one of practically immediate concern -- according to the report, "one of Mr. Diez's first orders of business" was to renegotiate city contracts, including those with ADA "or that ADA might be interested in acquiring."

When the OIG interviewed LeRay, she "initially stated that she did not know how the partial amount of the proposal for $22,835" -- the original payment pushed through by Allen -- "was approved." She said she did approve a second partial payment, but only because "she had no other choice" and was told that Allen was going to submit the entire amount to the City Commission for retroactive approval. Then she was fired.

As for Diez, he threw Allen right under the bus -- he "admitted that the initial proposal for Public Works management services was $61,000 and that the proposal was revised to an amount within Allen's award authority... He stated 'everyone knew why the proposal was split' and that he was only doing what was requested of him in order to 'get the job done.'"

The OIG report, just like the last one, is still technically a draft -- it will be finalized after those named in it have a chance to respond, which Allen told the Sun-Sentinel he planned to do. Trying to track down Diez for comment.

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Rich Abdill