Pima County Officials Violated State and County Laws in Balloon Case

by Timothy Sandefur
December 18, 2018

Pima County officials decided two years ago to give $15 million of taxpayer money to World View Enterprises, a private balloon tourism company, in an effort to boost the economy. But they did more than that. They also decided to make the company a custom-made 135,000 square-foot facility—including a balloon launch pad, a headquarters building, and a construction area for high-altitude balloons—all with taxpayer money. And to build that facility, they hired a contractor and an architect through a series of secret backroom meetings that violated state and county procurement laws.

That’s not just the Goldwater Institute saying it. It’s the Pima County Superior Court, which this summer concluded that Pima County Administrator Chuck Huckelberry and his staff spent five months—from August 2015 to January 2016—meeting with a “hand-picked” architect and a “hand-picked” contractor to design the project before even informing County administrators what was happening. Only after the pre-construction work was almost a third completed did Huckelberry inform the Board and urge them to award the contract to the architect and contractor he’d already chosen—all without following the legally required competitive hiring process.

That’s important because the procurement laws require competition rather than favoritism in public contracting, to ensure that taxpayers pay lower prices and get better-quality services. But as the trial court put it, “the record is clear that for his part, Mr. Huckelberry had no intention of pursuing a competitive bidding process, or encouraging the Pima County Board of Supervisors to do so.” Instead, half a year before even asking the Board to approve the project, he “selected” the architect and the contractor himself—“at a time when…it was not ‘impracticable’ to allow others the opportunity to bid for consideration on the project.”

The result of this favoritism, the court said, was that the architect and contractor got “a five month ‘head start’ over any other potential bidders.” So when the Board convened to decide whom to hire, it concluded that because these two firms had such a big head start, it only made sense to hire them.

That’s an improper contracting practice—a form of favoritism that procurement experts call “unequal access to information.” It happens when government officials hand over information to just a few, specially chosen contractors, to give them ahead start over any potential competitors. It’s not just unfair—it’s also illegal. Both Arizona law and Pima County ordinances impose strict rules for procurement by county officials—and they forbid this kind of backroom dealing.

We filed a lawsuit on behalf of taxpayers challenging this wasteful and unjust practice. But while the trial court agreed with us about the facts (which you can read here and here), it ruled in favor of the County on technical grounds, declaring that since state law only allows counties to “procure” through an “agent,” and since county administrators aren’t technically “agents,” Huckelberry’s actions weren’t “procurement,” and therefore weren’t illegal.

That doesn’t make logical sense, as we explain in our appeal, filed yesterday. The law defines “procurement” as any kind of obtaining or getting, and the County certainly did obtain—and therefore “procure”—the architect’s and contractor’s work. True, only agents are allowed to procure—but that just proves that what County officials did here was even more illegal. Not only did they obtain the pre-construction services in an illegal way,but also through the wrong personnel.

That may sound like lawyer-speak, but it’s important because, as the trial court acknowledged, if Pima County can do what it did here, other counties will do likewise: frontload their projects by picking favored firms, give them a big head start doing the work ahead of time in secret, and then—surprise!—approve it afterward on the theory that, after all, the company has such a big head start. That tactic would evade the competitive process, raise costs to taxpayers, and encourage a situation in which government contracts go to the well-connected, rather than to those who do good work for low prices.

The facts here are a perfect example: The World View project was, from the outset, riddled with the sort of favoritism and special treatment that state and county law forbids. It’s just another reason why Pima County’s illegal and foolhardy subsidy to a private firm should never be repeated.

Timothy Sandefur is the Vice President for Litigation at the Goldwater Institute.