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Wanna strike it rich? Come to D.C. Take a top city job. Leave it.
Holland and Knight could really ruin John Fairman’s decade. The Miami law firm—enlisted by D.C. two weeks ago to find a way to avoid paying Fairman’s severance package—may wind up yanking a lot more than a few weeks’ pay from the disgraced D.C. General Hospital leader. News broke earlier this month that Fairman was in line to get a farewell payment of over $1 million over the next three years.
The reports about Fairman’s buyout sparked the predictable round of municipal outrage. The hospital boss, after all, was placed on administrative leave June 30 amid reports of improper accounting and politically oriented hiring, and a federal investigation of the D.C. General administration. And the level of outrage only rose once news surfaced that the kiss-off was guaranteed by a 1999 contract addendum stipulating that Fairman would get his severance package no matter why his employment ended.
Editorialists, D.C. councilmembers, and Mayor Anthony A. Williams all blasted the unpublicized addendum. “As city deals go,” wrote the Washington Post, “it is one to take the breath away.”
They should save that breath. In the District, Fairman’s goodbye kiss is remarkable only for its magnitude and its audacity:
* Eighteen months ago, Camille Cates Barnett stepped aside as D.C.’s chief management officer. Barnett had been brought in by the city’s financial control board to run the government after the board removed most city agencies from the control of former Mayor Marion S. Barry Jr.
The age of clean government that Barnett was supposed to herald, however, had been marred by a scandal over a no-bid $893,000 contract Barnett awarded to a former colleague from Texas. Then-control board Chair Andrew Brimmer eventually canceled the contract, and Barnett acknowledged that it had been a mistake. A D.C. inspector general’s report ultimately cleared her of wrongdoing, but the city’s reputation suffered nonetheless.
And when government agencies were handed back to city control after the inauguration of Williams, Barnett’s role became superfluous. Her severance after one year at the $155,000 job? A $275,000 package. Under fire for the payout, control board members said their hands were tied by Barnett’s original contract.
* In May, Chief Financial Officer Valerie Holt left office, also after one rocky year at her post. The longtime D.C. government staffer—and protegee of control board Chair Alice Rivlin—had taken the job that had catapulted Williams to the mayor’s office and turned it into just another perch for city mismanagement. She had botched her most public task: turning in the city’s annual budget audit clean and on time. Soon after the audit arrived three months late, Holt announced her departure for a federal position.
But it turned out that the timing of Holt’s new job wasn’t just serendipity: At D.C. taxpayer expense, the city government had merely “detailed” the compromised official—and her $122,200 paycheck—to the Department of Labor. Why did the control board OK the face-saving reassignment? “You don’t ignore 15 years of exemplary service,” explains control board Executive Director Francis Smith.
* In June, D.C. Public Schools Superintendent Arlene Ackerman left office after only two years in order to take the top job in San Francisco’s school system. Opinions vary on Ackerman’s reform efforts, but few people disagree that her departure damages D.C.’s ability to find a permanent replacement for Interim Superintendent Paul Vance: On her way out the door, Ackerman made it clear that the District’s convoluted lines of authority and picky elected officials had made her job miserable.
Most people who leave jobs on, say, Nov. 15 don’t expect a Christmas bonus. Ackerman, though, is still in line to pull down a $35,000 performance bonus this year even though she’s history. “Hers is a contractual bonus provision,” notes Smith, who maintains that no decision on paying out the bonus has been reached. “She’s entitled to consideration for a bonus….It’s not just a going-away present. A bonus is substantively different.”
Whatever they are, these payoffs—and several others—have longtime government-watchers convinced that the District has traded in its identity as a turkey farm for inept bureaucrats for a new role as sugar daddy to disgraced senior managers.
“It’s ‘How much do I get?’ not ‘How do I serve the public?’ That’s the mentality of some of these chiefs,” says Terry Lynch, a 20-year veteran of D.C. activism who serves as executive director of the Downtown Cluster of Congregations. “Camille Barnett, it’s OK for her to walk off with a quarter-million for getting forced out? What does that say to Fairman? He wrote that [addendum] into his contract right when Camille was getting forced out.”
The generous payoffs, at first blush, seem like another legacy of the D.C. government’s dysfunctional past. They’re not. In fact, they’re a product of the city’s recovery.
“Prior to Camille, I can’t think of anybody who got big buyouts,” says Ward 2 Councilmember Jack Evans. “Not before the control board.”
The difference, says Evans, is that instead of treating the government as a place to employ locals, the board treated it—especially in its senior ranks—as a place to hire professionals. “In order to attract talent to D.C., we had to increase our salaries,” he says. “When the control board came, they took it to a new level. If you’re going to attract talent, you have to pay what other
governments pay. But then they tried to match the private sector—which means incorporating the golden parachute. I don’t know that that was wise.”
Defenders of the payoff pattern add that there was another rationale behind the golden parachutes. The government’s main goal these days is to improve the city’s reputation. One way to lure quality newcomers to a difficult workplace like the D.C. government is to prove to them that a District job doesn’t have to end with a kick in the pants. A few high-profile goodbye presents might help get that message across.
“One thing that’s been an issue in terms of recruiting is how we let people go,” says Ward 3 Councilmember Kathy Patterson. “In some cases, it’s been merciless. If we’re going to go about rebuilding our government, we need to think about how we get rid of people. Because in terms of finding a replacement, how we’ve handled the dismissal has a lot to do with whether and with whom we can replace them.”
By Patterson’s lights, send-offs like the one given to recently departed Department of Public Works Director Vanessa Dale Burns—who got $28,000 in severance after one blunder-filled year on the job—are more an investment in future staffers than a gift to past ones.
Beyond just helping the city recruit its next generation of bureaucrats, some executive goodbye-gift defenders say the practice also helps keep the government running smoothly. The District’s decision to pay Holt’s way to a Labor Department job, for instance, made people furious because the administration and the control board both had tried to keep it a secret in order to head off any controversy. But former District Personnel Director Larry A. King says that avoiding public spectacles should be the point.
“It was smart on the part of the Williams administration and the control board not to get in a dispute about whether Valerie Holt should stay or go,” says King. “The finances of the city are delicate; it’s important that the financial leadership remain stable. I think the agreement that was reached was in the best interest of the city.”
So if everything’s hunky-dory, why the outrage over the high-profile goodbye gifts? After all, most D.C.-watchers were thrilled when this year’s city budget included $18 million for severance packages that would allow the city’s government to cut deadwood out of its middle management. And there was little dissent when a 1998 personnel reform bill first allowed mayors to give severance packages to appointees. Shouldn’t upper managers be dispatched for the relatively larger sums commensurate with
Of course they should. In theory. But too many of the city’s recent exit sweeteners strike folks like Evans not as wise strategic maneuvers but as blunders dressed up in the management-babble of the new D.C.
“I sit here and watch as people like Vanessa Burns and Valerie Holt go,” Evans says. “These are all people who were hired by Mayor Williams, making it seem as if the administration is being responsible for removing these people, which they are. But they hired them, too….Frankly, as we move forward we should not be building in severance packages that go beyond the government norm. Especially if someone’s being removed for cause. People negotiating the contracts should be cognizant of that. It’s taxpayer money.”
Late in the 1998 mayoral campaign, Evans, then trailing badly behind Williams, tried to score points at a debate by blasting the future mayor’s handling of a severance package for outgoing D.C. Lottery chief Frederick L.
King. Why, Evans asked, did King get a $50,000 send-off after officials found out that he had used government credit cards to pay rent at a high-end downtown apartment house?
Williams responded that the settlement was the easiest way to get King out of government without an expensive court battle. The issue went away. “There was no way anything was going to stop Williams at that point,” says Evans.
Two years later, the same thing—nothing—is likely to happen to the high-profile golden parachutes that have been given out during Williams’ mayoral tenure. With the city’s lines of command still confusing—Fairman’s deal was OK’d by the independent Public Benefit Corp. board; other major goodbye packages were inked by the control board—neither Williams nor most any other city bigwig is likely to suffer much political damage for handing out oversized severance packages in these cases.
When he does his own hiring of agency directors, Williams has somewhat less discretion than the independent bodies: He can give up to eight and sometimes 12 weeks’ worth of separation pay, according to Director of Personnel Milou Carolan. After a 1999 dust-up over short-lived Chief of Staff Reba Pittman Evans’ receiving eight months’ salary for just three months of work, says Carolan, the rules were changed to limit mayoral appointees with less than one year of tenure to just four weeks of pay.
Many appointees, though, were hired under agreements that predate those rules: Controversial parks boss Robert Newman, for instance, would have gotten two months of pay if he’d left before his one-year anniversary this week. If he leaves now, says Carolan, any goodbye gift will be up to the mayor.
And the longer Williams occupies the 10th floor of One Judiciary Square, the more responsibility he’ll have to take for sacked administrators—and even for the smaller sums that ordinary mayoral appointees like Burns have gotten upon leaving. So far, he seems to be making the right moves. Controversial new Fire Chief Ronnie Few—who is taking over D.C.’s fire department even as he awaits the results of a grand-jury investigation back in Augusta, Ga.—received a promise of just four weeks of severance pay, according to a hiring agreement provided by Williams’ office.
Of course, if Few ever leaves in disgrace, that will be four weeks too much for some people. CP