October 23, 1997 in Nation/World

Incinerator Study Compromised But City Engineer Says His Affair With Researcher Had No Effect On Review Of Environmental Impact

By The Spokesman-Review

Copyright 1997, The Spokesman-Review

Spokane Engineering Director Phil Williams has had an affair with the lead scientist working on a $300,000 study of Spokane’s trash incinerator.

State officials are concerned by the potential conflict of interest, and the city is promising an internal investigation.

Since 1990, Williams has supervised the work of toxicologist Kathryn Kelly on the unfinished state-mandated study of the incinerator’s environmental impacts.

Washington state officials recently criticized the research methods used in the study, which is two years overdue.

Williams’ estranged wife, Nancy Konn, names Kelly in court documents as the woman responsible for breaking up her six-year marriage to Williams.

The revelation could jeopardize Kelly’s continued involvement in the incinerator study, state Department of Ecology officials said.

“If this is true, we will not use Kelly to finish the study,” said Diane Christel, the department’s solid waste grants manager in Olympia.

Williams’ relationship with Kelly poses major conflict-of-interest questions, according to state Auditor Brian Sonntag.

“This is a serious issue for the city of Spokane,” he said.

In an interview Wednesday, Williams said his relationship with Kelly began in September 1996 - after most of the work on the incinerator study had been done.

“Ninety-five percent of the money and effort was completed before there was any personal relationship,” he said.

He talked with City Manager Bill Pupo about the relationship last year, but Williams said he didn’t think it was necessary to inform the Ecology Department.

“I don’t see any conflict of interest questions there,” Williams said.

Kelly did not respond to several telephone calls this week. In a voice mail message Wednesday, she said she was “surprised” her personal life was being drawn into the public spotlight.

On Monday in executive session, Pupo briefed City Council members for the first time on the issue.

Williams admitted the affair to Pupo privately last October after the city received an anonymous letter about it, Pupo said Wednesday.

“I sat him down. I told him, ‘you’re at arm’s length from now on for any professional involvement”’ with Kelly, Pupo said.

Williams said he understood Pupo to mean he should stay away from the financial side of the project. “Bill didn’t say to stay away from the study,” Williams said.

He continued to work with Kelly this year, records show.

They co-authored a 10-page conference paper on the trash incinerator’s environmental track record that Williams presented at an incineration conference in May in Oakland. Kelly attended the same conference, he said.

She was paid $3,101 for the paper - the remaining balance on her $45,000 contract for the study’s final phase, approved by the City Council in March 1996.

She knew the paper wasn’t budgeted in the state-funded incinerator study, Kelly wrote Williams in a December 1995 memo.

But “having a little budget to work with will motivate me to get more done,” Kelly wrote.

Ecology recently said it won’t reimburse Spokane for the paper. Christel, the agency’s supervisor for the Spokane trash study, called it “self-promoting.”

Last week, within days of Ecology inquiries and a request for records by The Spokesman-Review, Pupo asked Deputy City Manager Peter Fortin to investigate Williams’ conduct.

Pupo said Wednesday he “knew nothing” about Williams and Kelly working together on the Oakland paper.

The relationship between Williams and Kelly gives City Hall a black eye, Councilwoman Cherie Rodgers said this week.

It’s especially bad that Pupo has known about the liaison for a year and didn’t inform the council, she said.

Rodgers serves on a city-county board of elected officials that oversees solid waste issues, including the incinerator.

“We have Ecology spending a fortune on a study that isn’t credible, and now we have a major conflict of interest - Phil Williams having an affair with the woman doing the study,” Rodgers said.

“This puts a cloud over everything,” she said.

“We knew nothing about this until Monday,” said Councilwoman Roberta Greene, another member of the liaison committee.

Williams has not bowed out of incinerator issues, including the environmental study, Rodgers said. “Phil still has his hand in everything,” she said.

Kelly runs her own environmental services company in Nevada and is working on the trash study under a city contract.

After The Spokesman-Review published an Oct. 5 story on the dispute over the science used in the incinerator study, the newspaper received two anonymous letters linking Williams and Kelly.

Konn said she had nothing to do with the letters and did not want to jeopardize Williams’ job. The couple has a 5-year-old son.

Last fall, Konn said she received anonymous calls about the affair, prompting her to confront her husband.

“My husband has admitted to me that he is currently involved with someone. Her name is Kathryn Kelly,” Konn said in an affidavit filed in Spokane County Superior Court. The divorce case was filed last November and is pending, records show.

Someone also wanted Ecology to know about the relationship. Christel received one of the unsigned letters from Spokane last week and phoned Williams.

“He was very defensive. He led me to believe his ex-wife was making all these allegations. He wasn’t seeing the conflict of interest issue clearly,” Christel said.

The controversy could lead to stronger conflict of interest rules for city officials, said Spokane City Attorney James Sloane.

State law prohibits any city official from using his position “to secure a special privilege for himself or another.”

According to the City Charter, all contracts shall be free “from all influences of, or benefit to” any officer or employee of the city.

The city’s contract with Kelly goes back seven years.

In 1989, then-Ecology Director Christine Gregoire insisted Spokane conduct a study of the trash incinerator to address citizen concerns about its health and environmental impacts.

Ecology is reimbursing Spokane for the study from a $60 million state grant that helped build the trash incinerator and close Spokane’s leaking landfills. Total cost of those projects: $134 million.

In May 1990, a local project advisory committee chose Kelly, a toxicologist with a public health doctorate from Columbia University, as lead investigator.

She was chosen in part because her company was located in Seattle and her travel bills ate up less of the $300,000 project budget than her competitors, said Curt Messex, a selection committee member.

Williams became solid waste director in 1989. He set up the advisory committee that picked Kelly. In July 1996, he was promoted to planning and engineering services director. His salary is now $82,970.

In March 1996, on Williams’ recommendation, the City Council approved spending the final $45,000 from the $300,000 project for Kelly to complete the study.

Williams said he did not have a personal relationship with Kelly at that time.

Ecology recently offered Spokane an $80,000 extension to finish the study to the state’s satisfaction. Half the money would have to be covered by Spokane taxpayers.

, DataTimes ILLUSTRATION: Color photo

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