ALBUQUERQUE (KRQE) – Ray Schultz, former chief of the troubled Albuquerque Police Department, helped to essentially rig a no-bid, $2 million contract for officer body cameras made by Taser International, Inc., a company for which he went to work as a consultant and pitchman months before officially retiring from APD, according to a long-awaited report from the state Auditor’s Office.
The report, by Auditor Tim Keller, was released at a news conference Thursday morning. Its completion sets the crosshairs on Schultz and the city of Albuquerque, the first high-profile targets of Keller’s four-month-old term as auditor.
KRQE News 13 obtained an advance copy of the report. In it, Keller accuses Schultz and other, unnamed city officials of numerous violations of the Governmental Conduct Act — a state law whose purpose is to protect against public corruption and so-called “pay to play” government operations.
According to the report, Schultz and the others, in the way they went about awarding the contract to Taser, also violated several city ordinances, including the one that deals with conflicts of interest, the Code of Ethics and the Procurement Code.
Keller pointed to Taser-paid junkets for Schultz and others, the former chief’s ignoring of a one-year post-retirement prohibition on city employees going to work for city vendors and APD’s “intentional attempt to subvert” the procurement process as evidence that the company was given an unfair advantage and the inside track to a seven-figure contract — Taser’s most valuable for body cameras.
“We think there’s some clear evidence that these laws may have been violated, and that’s why we’re referring this matter to the appropriate law enforcement agencies for prosecution,” Keller said in an interview Wednesday. He sent copies of the report to District Attorney Kari Brandenburg and Attorney General Hector Balderas.
Keller’s review followed a series of News 13 reports that first showed Schultz had gone to work with Taser weeks after the city signed a lucrative contract with the company for body cameras and cloud-based video storage, then that he had been in talks with the company for months about a job before his retirement.
In one email, obtained by News 13 through a public records request, Schultz assured a Taser representative that the body camera contract had been “greased” and would sail through a City Council committee. Schultz sent that email while he was still at the helm of APD. The longtime lawman also boasted in a separate email to Taser staffers that, even after his retirement, he would still have the ear of Mayor Richard Berry and Chief Administrative Officer Rob Perry.
In Keller’s report and in the interview, he cited those emails as highly suggestive that Schultz had exerted improper influence on the contract process — and as warning signs of illegal conduct.
“This is being conducted by the chief of police in the city of Albuquerque,” he said in the interview. “That is a massive contradiction with what that office stands for … Unfortunately, this is a situation where we had someone who might have even thought he was above the law, or that that office was sort of above these sort of procurement and pay-to-play conflict issues. He’s not; no one is.”
Keller worked with the city’s Office of Inspector General on his investigation of Schultz and the Taser contract.
On Thursday, the Inspector General’s office said its report, which is separate from the auditor’s, will be released in two weeks.
Schultz retired from APD at the end of 2013 after eight years as chief. He is now the assistant chief at a small department in Memorial Villages, Texas. Schultz did not respond to requests for comment Thursday.
His attorney, Luis Robles said he had not seen Keller’s report. But based on his review of emails and other records related to the Taser contract, Robles said he is of the opinion that Schultz did not violate any of the state laws or city ordinances Keller accuses the former chief of violating. Robles also said Schultz “turned over all operational and daily decision making” about APD to interim-Chief Allen Banks, beginning in August 2013.
“Stated differently, Chief Banks made the final decision regarding the purchase/procurement of the Taser camera data storage system,” he said.
Keller said neither Robles nor Schultz responded to inquiries from his office during the lengthy audit period.
Interviewed on Thursday afternoon, city Chief of Staff Gilbert Montano said the city now admits the contract with Taser was problematic.
“There was a failed implementation of how this contract did work,” he said, adding APD purchase requests will now undergo further review by other departments.
Montano’s comments marked a stark departure for the city, which has been defending the contract and Schultz’s relationship with Taser for a year.
Thursday evening, Taser International responded to the allegations for the first time, defending the company’s relationship with APD and practices leading up to the deal.
“It was (and remains) our belief that we were fully compliant with all ethics guidelines,” Doug Klint, general counsel for Taser, said in a statement.
The company denied knowing Schultz had any kind of employment with APD through the beginning of 2014, as noted in the auditor’s report. Taser also took great pains to stress Schultz was never an employee, even though he received fees for speaking at conferences.
Nonetheless, the company announced a big change: It’s implementing a one-year “cool-off” period before paying former law enforcement officials for consulting engagements. The new rule, the company said, is to “eliminate any perception of a conflict of interest … while continuing to act with integrity and transparency in all of our business dealings.”
Keller said Schultz committed crimes.
“We basically believe that these violations occurred; we believe the law was broken,” he said. “We can’t say definitively it was, because we need to hear from him. If he is not going to talk to folks about that, the matter has to go to court. That’s where the legal system will compel him to have this discussion with the citizens of New Mexico about whether the law was broken.”
If either of the prosecutors moves forward with a case, Schultz could face prison time and tens of thousands of dollars in fines.
Balderas, at least, has significant knowledge of Schultz’s dealings with Taser. That’s because Balderas, who is now state Attorney General, was state auditor when City Councilors Ken Sanchez and Klarissa Pena requested the review of the Taser contract from the Auditor’s Office on April 28, 2014.
Keller’s report comes as scrutiny of Taser’s relationships with police executives across the country is increasing. In February, Associated Press reporter Ryan Foley published a story that examined the financial ties between the company and police chiefs from Fort Worth, Texas to New Orleans to Salt Lake City.
The auditor also is releasing his review at a time when body cameras for officers has become one of the most discussed and controversial topics in a national debate over police accountability and reform.
And the harshly worded document from Keller adds an official voice alleging possible corruption to the growing list of problems at APD, which already is facing years of costly reforms after the U.S. Justice Department found a widespread culture of officers using excessive force against citizens and department leaders looking the other way.
Schultz was running APD during the years when the use of force issues took root and flourished.
When KRQE News 13 first reported on the details of the relationship between Schultz and Taser, the city defended the contract and the process officials used to secure it.
“This purchase was approved through City Legal, Procurement, and the Technical Review Committees to comply with purchasing rules and regulations,” Perry, the city CAO, said at the time. “The use of the term ‘greased’ by former Chief Schultz in a single email is a poor choice of words, however, the purchasing process indicates no wrongdoing.”
Schultz also said at the time that he had used a “poor choice of words.”
KRQE News 13 asked city officials last year whether Schultz was breaking the law by simultaneously collecting paychecks from the city and one of the city’s vendors.
“As Ray Schultz was not an ‘active’ employee after he went into earlier retirement, [the city’s legal department] would not interpret the prohibition against outside employment to apply to him,” then-spokeswoman Breanna Anderson said in March 2014.
Keller and his auditors saw the timing of Schultz’s employment with the city and Taser as violations of the Governmental Conduct Act.
They also found little documentation the city had tested other company’s products.
Schultz told News 13 in February 2014 that the contract for the body cameras had, in fact, gone out to bid.
“It does go through a bid process. We did look at several other vendors and several other pieces of equipment – it just so happened this is the piece of equipment that was used,” he said at the time.
That was not true. None of the Taser camera contracts went out to bid, including the city’s original March 2013 test purchase for 75 Taser Axon Flex cameras and online video storage at the company’s cloud-based platform, evidence.com.
A year ago, a city spokeswoman said officials used an existing “sole source” contract with Taser to purchase the cameras, but did not explain why the city believed the $100,000 purchase for cameras and online storage fell within that contract, which specifically referenced electronic stun guns — long a staple of Taser’s array of products — and repairs.
The city also offered multiple, and varying reasons for why the full five-year, $1.95 million dollar contract for cameras, camera repair and online storage, signed six months later, didn’t go out for bid either.
After multiple email exchanges with News 13 journalists, the city offered some circular reasoning: The contract was exempt because of a clause in a city ordinance that allows for purchases of goods required to match equipment currently in use.
In other words, the $2 million contract for Taser cameras and online storage was exempt from bid, because the online storage is meant to work with the cameras, and the cameras are meant to work with the cloud platform, according to the city’s explanation from last year.
Keller, in his report, said the city’s justification for not putting the contract out to bid showed an intentional circumventing of good government practices — and further potential violations of the law.
“I think what we saw in the investigation is also a tone from the top that is really being fast and loose when it comes to the procurement code, and when it comes to ethics,” he said in the interview. “We believe Albuquerque needs to overhaul it’s procurement processes. There’s loopholes; there’s vague language in there that I think can sort of allow for this to happen and sort of slip through. That should be tightened up by the mayor and City Council. I think that would go a long way toward preventing that in the future.”
The audit report calls into question or, in some cases, directly challenges many of the city’s year-old explanations for the contract process with Taser.
For example, in 2012 and 2013, while Schultz and others at APD were finalizing their plans to go all in with Taser for body cameras, the company was paying officials’ way for trips to Scottsdale, Arizona and a party in San Diego, California, during a law enforcement convention. According to emails obtained by News 13, both Schultz and Deputy City Attorney Kathy Levy accepted tickets to a Taser party at the Stingaree Nightclub in October 2012.
That arrangement, according to Keller’s report, suggests a conflict of interest.
Taser used strong language to defend the its relationship with Schultz and other police officials.
“It is ridiculous to claim it is inappropriate for a chief of police to attend the largest conference in the law enforcement industry and attend events from the major vendors and sponsors during the conference,” Taser said, though the auditor’s office never mentioned a concern with the law enforcement conference itself.
“At the end of the day, when you’ve got a revolving door situation where the outgoing police chief is then contracting with the firm that he just went on junkets with and staff went on junkets with, and just got free material from, that’s a violation of the Governmental Conduct Act,” Keller said in an interview with News 13.
For a year, the city has maintained that APD tested body camera systems from other companies. Keller said in his report that auditors found little if any evidence to support that claim.
The city’s Procurement Code needs tightening, Keller concluded. And APD did not follow it for the Taser deal, besides.
The city based its reasoning to award the contract to Taser on three points, according to the audit report: continuation of an existing, 2011 contract with the company, a loose reading of the clause in the Procurement Code that allows for no-bid contracts for products that are related to each other and a justification that other cameras had been tested.
The Auditor’s Office “is concerned about all of these approaches,” the report said.
A longstanding relationship, a questionable future
Since the mid-2000s, APD has spent millions of dollars on Taser-made equipment: first on the company’s signature stun guns and, in more recent years, also on body-worn cameras.
The stun guns have played a prominent role in what the Justice Department calls APD’s unconstitutional use of excessive force. The report detailing the DOJ’s findings, released last year, excoriated the department for overusing stun guns, often against people who posed a minimal threat.
Stun gun use by city police skyrocketed under Schultz, increasing, for example, by 67 percent between 2009 and 2012, according to the department’s internal figures. The increase wasn’t by mistake. According to internal memos, APD Academy trainers came to rely more and more heavily on Taser-made stun guns through the years.
As of April 2014, the city had spent nearly $1.5 million on its rolling, no-cap, sole-source contract for “Taser equipment, supplies and repairs” that was signed in March 2011.
In October 2013, the city spent an additional $345,725 for the first of a separate, five-year camera contract.
Then, the payments stopped.
The city has paid Taser less than $31,000 in the past 12 months.
KRQE News 13 downloaded the data from the city’s website last month. As of early Thursday, Taser no longer comes up in vendor searches — not even for records of past payments.
The mayor’s office has confirmed that the city currently has no contracts with the company. The city’s contract for Taser equipment expired last month.
Despite repeated requests, officials in Mayor Berry’s administration have refused to say what APD is doing when Taser products need repair. The city’s own contracts indicate the company is the only qualified vendor to service the products.
The city also hasn’t made a payment for the camera contract since making its first installment of the five-year deal.
“Year one of the Taser services contract expired on September 30, 2014. We have not filed another contract with Taser,” Berry spokeswoman Rhiannon Schroeder said. “We are working with the court monitor to determine which company APD should utilize for lapel cameras.”
Taser’s contract indicated that could put the city in danger of losing lapel camera evidence, since the city is no longer paying for the cloud storage.
However, APD continues to use the Axon Flex cameras and evidence.com.
“Taser continues to provide us this uninterrupted service as part of the prior agreement with them,” Schroeder said. “This service is not in danger of running out anytime soon.”
That raises another question: Is it a violation of city statutes that Taser is now providing services for which the city is not paying?
The Mayor’s office refused to answer.
Asked again about the Taser contract on Thursday, Montano said he wasn’t sure where things stand.
“When you say we’re not paying or haven’t paid, I’d have to get really into the details of what we’ve already paid,” Montano said. “I’m sure that Taser will certainly be challenging us if the payments aren’t there, in terms of contractual terms.”
KRQE News 13 has learned that Police Chief Gorden Eden recently wrote a letter to the Auditor’s Office, asking for guidance on an “upcoming” Taser contract.
Keller said he offered the following advice: Follow the procurement code.
This story has been updated with response from the city of Albuquerque and Taser International.