EagleTribune.com, North Andover, MA

April 11, 2012

State watchdog: Lawrence police lost $30K in illegal car swap

By Brian Messenger
bmessenger@eagletribune.com

LAWRENCE — The police department broke state and federal law and lost more than $30,000 two years ago when it swapped 13 vehicles for four Chevrolets with a used car salesman connected to Mayor William Lantigua.

That's according to a letter sent to Lantigua yesterday by state Inspector General Gregory Sullivan. The letter details a 2010 transaction with Santo Domingo Motors that landed the police department four Chevy Impalas in exchange for 13 cars the city seized in drug busts — including a Cadillac and a Lexus. The deal was brokered by Deputy Police Chief Melix Bonilla.

In his letter, Sullivan wrote the car swap "suggests the need for clear procedures and better oversight," and made several recommendations to the city for improvement.

Sullivan wrote the police department broke state laws for procurement and controlled substances and federal civil forfeiture law when it struck a deal with Santo Domingo Motors, rather than using competitive sealed bids, public auction or established markets.

The inspector general also questioned the department's methodology in the transaction, which was executed by Bonilla. Bonilla managed Lantigua's 2009 mayoral campaign and remains a top political ally.

Sullivan wrote the department appeared "to have disregarded the taxpayers' and its own interests" by transferring property worth $36,398 more than what it got in return.

A private valuation of the city's 13 vehicles in July 2010 by Wayne Demers of Motta Auto Body in Methuen set their value at between $18,000 and $26,000. But a state Department of Revenue estimate based on the Kelley Blue Book set the value at $66,048.

Sullivan wrote yesterday that Santo Domingo Motors sold the 13 vehicles — which ranged in year from 1996 to 2005 — for a collective $61,350.

Demers valued the four Impalas at a "range in total between $24,000 to $28,000." The state estimated their value at $30,010, according to Sullivan's letter.

"Applying the standard of a prudent business person, the LPD did not act in its own best interests," Sullivan wrote.

Santo Domingo Motors is owned by Bernardo Pena. The dealership has lots on Haverhill Street and Broadway and specializes in exporting cars to the Dominican Republic.

In February 2010, Pena cosponsored the mayor's birthday party at a downtown nightclub. Pena also sent Lantigua's campaign organization a check for $200 as the car swap was coming together that May. And when police arrested Pena seven months later for ramming a car into a police vehicle, Lantigua called police Chief John Romero to question him about the arrest as it was happening, according to Romero and the arresting officer.

The car swap was first reported in The Eagle-Tribune last September and has also come under investigation by the FBI and Essex County District Attorney Jonathan Blodgett.

Sullivan also wrote the department made the swap "without authorization or direction from the city." Proper approval should have come from the mayor or Acting Chief Procurement Officer Walter Callahan, who was not informed of the transaction.

The city has until May 31 to report back to Sullivan with the ways it plans to address its "vulnerabilities" with procurement and sale of municipal property.

Among Sullivan's recommendations:

* Advise employees periodically that the purchase of supplies and services and sale of municipal property must be authorized by the city's executive purchasing official.

* Educate city personnel on the availability of free procurement training.

* Advise city departments that "all property to which a municipality or its departments holds title, however acquired, is an asset that must be disposed of in a manner that most benefits the municipality, and that a disposition in a manner that is not commercially reasonable constitutes waste, and perhaps fraud and abuse."

Romero said the department intends to comply fully with Sullivan's suggestions.

"From this point going forward, we'll follow those steps they recommended," Romero said yesterday. "We'll certainly comply with that."

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