Mayor Marion Barry said yesterday that he fired former cabinet member Jose Gutierrez from the D.C. government Monday because of years of problems with Gutierrez and a new report alleging that Gutierrez abused his office by steering "lucrative, give-away contracts" and leases to an acquaintance.
"I can tolerate management deficiencies . . . but dishonesty and lack of integrity is something I won't tolerate one minute, and that's what happened in this case," Barry told a reporter.
The report, prepared by mayoral legal counsel Herbert O. Reid Sr., cited instances in which Gutierrez allegedly negotiated two leases and a contract that provided favorable financial terms to Angel Roubin, a businessman and friend of Gutierrez.
Barry ordered the D.C. corporation counsel to terminate both lease agreements, including one to house eight city agencies in an office building at 1111 E St. NW that is owned by one of Roubin's business entities.
However, lawyers for Roubin's limited partnership and an insurance company that put up financing for the partnership were granted a temporary restraining order in U.S. District Court yesterday to block the attempt to break the lease. Judge John H. Pratt tentatively scheduled a hearing for May 31.
The District argued that the city's leases with Roubin's partnership were invalid because Gutierrez, while head of the D.C. Department of Administrative Services, exceeded his authority in negotiating the agreements, according to D.C. Corporation Counsel Inez Smith Reid.
Pending the outcome of the case, Pratt ordered the D.C. government to pay $165,000 into an escrow account against back rent.
Gutierrez, a high level official in Barry's administration for more than six years, was demoted March 25 from a cabinet level post to a job in the D.C. Office of Planning. He was notified by a letter delivered to his home Monday night that he had been fired.
Six weeks ago, after Gutierrez publicly accused City Administrator Thomas Downs of pressuring him to award contracts for political reasons, Barry instructed his legal counsel to investigate Gutierrez's conduct as head of the administrative services department.
Yesterday, Gutierrez cleaned out his desk at the Office of Planning and vowed to fight in court to clear his name and challenge the findings of the report, which he dubbed "Star Wars -- The Empire Strikes Back."
"They really did a number on me," said Gutierrez. "It's amazing what some people do with power . . . . It's an interestingly written report. It doesn't charge me with any criminal wrongdoing. It's really a very political report."
The report concluded that Gutierrez repeatedly violated or subverted District purchasing procedures, while exonerating Downs of any wrongdoing. Barry has instructed Vernon Gill, acting D.C. inspector general, to investigate for possible fraud, malfeasance or violation of city or federal law.
Gutierrez denied any wrongdoing and said he never had problems in getting along with the mayor until he complained that Downs was interfering with the awarding of major city telephone contracts and other procurement issues.
He also contended that Barry had informally approved Gutierrez's decision to award a subcontract to G&C Construction, a firm headed by Roubin, to do repair and maintenance work in D.C. office buildings.
That contract is one of three cited in the Reid report as being "riddled with violations of established contracting procedures" and a breach of the District's regulations for awarding contracts to minority firms.
In an interview yesterday, Barry denied he had ever discussed that matter with Gutierrez. "He Gutierrez lies, it's as simple as that," Barry said. "I don't get involved in subcontracting. I didn't know anything about G&C."
Barry contended that he had tolerated performance problems of Gutierrez dating to mid-1979, when Gutierrez was appointed acting director of the D.C. Office of Personnel. Even after he had become disenchanted with Gutierrez's performance as head of the administrative services department last February, Barry said, he sought to transfer him to another policy post rather than to dismiss him.
"But if I had known back in February what I know now, I would have fired him then," Barry said. " . . . That's why I'm so upset. I gave him 18 breaks."
Reid's report states that a contract with H&E Management Associates Ltd., to manage and maintain 61 city properties, was used "to funnel over $1.1 million" to subcontractors handpicked by Gutierrez.
The bulk of the city payments for H&E subcontractors -- nearly $960,000 -- went to G&C, a firm whose president is Roubin, the report said. Freeman Hair, H&E's president, is quoted in the report as saying that G&C's working supervisor on several of the city government sites was Jose Ponton Jr., a nephew of Gutierrez.
Gutierrez said yesterday that Barry directed him to hire three other subcontractors for the H&E contract -- W.R. Pittman Inc., a guard service, Buckner's Landscaping Inc. and International Business Services Inc. to manage parking lots -- an assertion that Barry denied. Gutierrez said all three firms are operated by friends or political supporters of the mayor.
"I went over the functions" of the H&E contract with Barry, Gutierrez said. "I said landscaping, he said Buckner. I said security, he said Pittman. I said parking, he said that ought to go to [Marion] Duke Greene [head of International Business Services]. At that point, I said, 'Can't we have a Hispanic?' He said which one. I said either Roubin or Perdomo [& Associates Inc]. He said Roubin is fine."