Scottsdale’s longtime transportation director, Paul Basha, and one other city employee have vacated their posts with the municipality in the wake of an internal investigation.

A Sept. 25 Scottsdale Human Resources Department Investigation Summary obtained by the Independent, outlined allegations of violating city policies, values and ethical standards for both Mr. Basha and Lisa Johnson, transportation planning and transit operations manager.

In a Sept. 13 resignation letter to Human Resources Director Donna Brown, Mr. Basha states his desire to step down from his role effective immediately. He did not provide a reason for his departure.

Ms. Johnson was terminated from her position.

“I apologize for this abrupt, impersonal, and unprofessional notification. However, very recent events have created the need for my immediate resignation,” Mr. Basha wrote in his resignation letter. “Thank you for understanding my current situation and my resignation necessity.”

Mr. Basha stated it was his pleasure and honor to serve Scottsdale residents for 22 years directly, and indirectly for an additional 13 years.

“Scottsdale is a wonderful City and a marvelous employer,” he stated.

In a Sept. 24 email, Communication and Public Affairs Director Kelly Corsette stated Ms. Johnson was “let go because she had lost the trust and confidence of her manager to perform her job.”

In a follow-up email, he clarified that Mr. Basha was her manager, but in this case she lost the trust of the Public Works director, who also was Mr. Basha’s manager.

“Paul was Lisa’s manager, but in this case she lost trust and confidence of the Public Works director (Paul’s manager),” Mr. Corsette stated.

According to a source close to the situation, the loss of trust and confidence stems from the hiring of Ms. Johnson’s husband’s company to do work for the city.

While it is believed the city went through a procurement process, and believed that Mr. Basha disclosed the information to the purchasing department, when Public Works Director Dan Worth learned of the contract he was uncomfortable with the conflict of interest. The contract was reportedly canceled immediately.

Mr. Basha and Ms. Johnson were both put through an administrative review before their respective departures from the municipality.

Summary of findings

The alleged violations identified in the investigation summary relate to a contract Ms. Johnson may have had a conflict of interest/perception of impropriety.

The investigation summary was written by Human Resources Manager Noel Wessel to Assistant City Manager Bill Murphy.

The document states that on Aug. 20, Mr. Murphy contacted Ms. Wessel regarding a possible ethics violation, which was brought to his attention via the City Auditor’s Office related to the award and oversight of a contract that both Mr. Basha and Ms. Johnson may have been involved.

Ms. Wessel began gathering information and reviewed the case with Ms. Brown, HR executive director, on Aug. 30, at which time it was determined to proceed with an investigation.

Through the investigation, it was found that on April 1, Ms. Johnson’s husband, Jerry Johnson, was awarded the Americans with Disabilities Act Federal Transit Administration Compliance Contract.

Purchasing Director Robert Schoepe indicated in his interview for the investigation that action was taken to ensure Ms. Johnson would not be the contract administrator, that the forms were signed and they moved forward with awarding the Scope of Work assignment for the contract to Mr. Johnson.

The non-conflict of interest statement identified Mr. and Ms. Johnson as related, and that she would not be involved in direct decision-making. In addition, items for the contract were to go through Mr. Basha as the supervisor and contract administrator.

“He further stated that if Jerry were to email Lisa, she would have to notify and forward the email to Paul, then Paul should handle it and that invoices should go to Paul to pay and process,” Ms. Wessel wrote.

It was determined that Ms. Johnson could not serve as the contract administrator not could anyone else who reports to her.

‘Perception is reality’

The investigation reveals Mr. Basha violated city policies, values and ethical standards by knowingly allowing his direct report, Ms. Johnson, to be involved in decisions related to a contract she had a conflict of interest/perception of impropriety.

It was found Mr. Basha failed to appropriately manage the contract administration, which ultimately caused an appearance of impropriety due to his lack of oversight, and failure to comply with city policies and procedures.

After Mr. Basha signed the non-conflict of interest form, and received information that Ms. Johnson should not act in the contract administrator role, Mr. Basha admitted that he had Ms. Johnson responding to emails to Mr. Johnson on his behalf.

He reportedly stated that it was “silly and unnecessary and time-consuming for me to interact with Jerry and then interact with Lisa --- then the interaction with Jerry was twice for every topic and then to Lisa twice.” Mr. Basha described the actions as “burdensome without benefit,” the investigation report states.

Mr. Basha further stated there was no need for him to be the contract administrator because it caused delays, stating, “I take full responsibility for that decision. It was done intentionally and on a very solid basis.”

He accepted full responsibility in having Ms. Johnson communicate with her husband. He stated, “I am forced to admit that I violated that direction.”

Mr. Basha maintains, according to the investigation, there was “no impropriety at all, but there was a perception and in government work, perception is reality.”

The investigation summary states, Mr. Basha’s lack of oversight and neglect to comply caused a failure to support the policy decisions, directions, rules and regulations established by city management; while also intentionally engaging in behavior that violates the city’s stated values: Be accountable and act with integrity.

In addition, the investigation found Mr. Basha violated City Administrative Regulation -- AR 320 Ethical Standards, when he failed to maintain the highest standards of personal integrity, truthfulness and fairness.

Violations sustained

The investigation also found that Ms. Johnson’s violations were confirmed.

Her involvement through the process, such as developing the scope of work and forms for use by the contractor, caused an appearance of impropriety.

Mr. Basha reported that Ms. Johnson had the primary decision-making responsibility for determining what specifications should be included or excluded from the Scope of Work, as well as determining that Mr. Johnson was qualified to complete the work.

“Rather than remove herself from the process entirely, Lisa acknowledged that she interpreted the procurement policies and procedures to mean that as long as she was not involved in the financial aspects of the contract, it would not be a problem,” Ms. Wessel wrote in the investigation summary.

Ms. Johnson maintains, according to the investigation, that she was “completely assured” by Mr. Basha that “everything was handled.”

However, she stated, looking back, she expressed she should have brought that relationship with her husband to Mr. Worth, who the transportation department reports to.

The investigation summary states Ms. Johnson violated the provisions of city policies and procedures, including AR 320 ethical standards. She also failed to support the policy decisions, directions, rules and regulations established by city management while also intentionally engaging in behavior that violates the city’s stated values.