Taylor City Attorney Helps Friends Steal $ Millions from City
TAYLOR HOUSING AUTHORITY MISSING MONEY AND ASSETS OVERVIEW
1. Since 1954, Texas Court rulings and the Texas Attorney General determined that the Taylor Housing Authority, created by the Taylor City Council, is legally a “division” of the City of Taylor, TX. The motive of any contrary claims must be questioned with the Texas court decisions, the Texas Attorney General’s opinions, and knowledge of the information in this document:
Extract of Texas Attorney General Opinon DM-71:
Texas authorities presented with the issue have uniformly held municipal housing authorities to be “divisions” of municipalities and, as such, subject to the laws applicable to municipalities. Mm v. Ho&g Auth of Dallas, 266 S.W.2d 487 (Tex. Civ. App.--Dallas 1954, writ refd n.r.e.); Aemu Casualty & Surety Co. v. Glidden Co., 283 S.W.2d 440 (Tex. Civ. App.-Eastland 1955), rev’d on other groti, 291 S.W.2d 315 (Tex. 1956); Attorney General Opinions JM-687 (1987); JM-573 (1986); MW-132 (1980).
Extract of Texas Attorney General Opinion DM-426:
"Texas case law and opinions of this office have concluded that a municipal housing authority is a division of the city that created it. Similarily, this office has concluded that a county housing authority is a division of the creating county."
NOTE: DM-426 Summary Conclusion states: "A municipal, county, or regional housing authority created under Chapter 392 of the Local Government Code is a "Government Body" subject to the Open Meetings Act, Gov't Code ch. 551" The ch. 551 legal definition of a Government Body is: "a deliberative body that has rulemaking or quasi-judicial power and that is classified as a department, agency, or political subdivision of a county or municipality;" The Taylor Housing Authority (THA) is classified as a "Governmental Body." Therefore, by Texas law, THA is a "department" or "Division" of the City of Taylor.
2. The March 12, 2013, Taylor Housing Authority (THA) Commissioners Board meeting minutes document that the Board Chairman, Mr. Benito Gonzales, reported to the City Attorney, Ted Hejl, evidence of an illegal, unauthorized, asset and cash flow separation of 104 apartment units from THA’s control. (THA Commissioners Board Meeting minutes dated March 12, 2013.)
3. Although the Taylor City Attorney, Ted Hejl, received the report of missing money and assets, Ted Hejl did nothing. As determined by Texas Public Information Act requests, Ted Hejl never reported the matter to the Taylor Mayor. Ted Hejl never reported the matter to any law enforcement authority. Ted Hejl did not advise THA to report the matter to the Taylor Mayor or any law enforcement authority. When Ted Hejl learned THA was missing assets and money, he did nothing. Ted Hejl had a “timely” and “accurate” legal advice obligation, under his contract, to advise the Mayor. By law, Texas Local Government Code 392, the Taylor Mayor is responsible for THA’s efficiency. Such a massive loss of assets and cash flow is inefficient, and suggests neglect and misconduct:
4. On October 2, 2014, eighteen months after the missing THA assets report to the Taylor City Attorney, the Federal HUD OIG published an audit memorandum documenting criminal fraud and theft at THA. Fraud, and the theft of $ millions in property assets and a continuing monthly cash flow, from THA. The audit was initiated after the HUD OIG received an anonymous tip. That anonymous tip suggests a well informed tipster knew the City Attorney intended to do nothing about the theft of Taylor's public assets. But, HUD did do something and gave the City the evidence. The HUD OIG audit quickly identified the suspects and the obvious fraud: Audit memorandum dated October 2, 2014.
5. The HUD OIG audit memorandum identified the THA Director, Mr. Steven Shorts, and two non-profit entities with board members including Mr. Steven Shorts and Mr. Ed Komandosky as suspects for fraudulent transfer of assets, cash, and continuing cash flow, all now exceeding $10 million, from assets and properties owned by THA.
6. Ted Hejl, the Taylor City Attorney is now, and has for an extended time, been the attorney for the Lower Brushy Creek Water Control Improvement District (LBCWCID) (see page 2 of link). Mr. Ed Komandosky has been a long time elected member of and is the President of the LBCWCID. Ted Hejl worked for Mr. Ed Komandosky as the LBCWCID legal counsel at the time the missing THA assets were reported to Ted Hejl. Ted Hejl still holds that LBCWCID job. The HUD OIG memorandum identified Mr. Steven Shorts, and two non-profit entities as the thiefs. Specifically, THA properties, assets and cash flow, were fraudulently transferred from THA to the non-profits’ control. Mr. Ed Komandosky was Vice Chair then, and is now the Board Chairman of each of those non-profits. Mr. Komandosky is a former Taylor City Council member and former THA Commissioner, having extensive interaction with Ted Hejl over time.
7. THA is a publicly owned housing business. Taylor Citizens own property, through the THA division of the City, with renters subsidized by taxpayer Federal funds. Prior to the fraudulent transfer, THA’s property management costs for the 104 stolen units were less than $80,000 per year. That management cost was consistent with the National Apartment Association’s standard. In 2012, soon after the “non-profits” fraudulently took over, the annual management cost exceeded $500,000. The excessive costs, after Mr. Shorts’s and Mr. Komandosky’s non-profits took over the properties, were due to increased management compensation. Another $1.4 million is missing for the five year period from 2011 to 2016. The cost data was taken from IRS Form 990s filed by the two non-profits.
8. After the HUD OIG memorandum was published and made public, 72+% of Facebook individuals surveyed by the Taylor Press expressed concern about the THA corruption. 72% wanted the matter investigated, even though the survey question was written, by Editor Richard Stone, to discourage an investigation. Mr. Richard Stone was recently employed by the LBCWCID, where Mr. Komandosky is President.
9. After public pressure, on January 7, 2015, Ted Hejl signed and filed a “civil” lawsuit for THA, 15-C-0021-C277, against Mr. Steven Shorts and the two non-profits identified by the HUD OIG report. In the lawsuit, Ted Hejl described the actions of Mr. Steven Shorts and the non-profits as illegal, criminal. But, while claiming crimes were committed and having the HUD audit in hand, no police complaint was filed. Mr. Ed Komandosky was on the Board of the accused non-profits. Mr. Shorts was Chairman and Mr. Komandosky was Vice Chairman of each Board. Mr. Komandosky is now Chairman of both those non-profit Boards. With Ted Hejl’s recommendation, the Dietz & Jarrod law firm was also engaged to work on the lawsuit. On June 6, 2015, the suit was amended. Suspiciously, no detailed financial analysis of THA’s losses, using IRS Form 990s, was included or presented to the court in the lawsuit.
10. Ted Hejl falsely claimed in the lawsuit that the Taylor Housing Authority is a “separate” entity from the City of Taylor and made no mention of Texas courts having determined otherwise since 1954. This false claim was supported by another lawyer, Mayor Jessie Ancira. Mayor Ancira refused to attend the HUD OIG briefing by claiming THA was not part of the City. The behavior of Hejl and Ancira was clearly not consistent with law and legal precedence and gives reason to suspect a supporting conspiracy. TLGC 392 describes a municipal housing authority as a "Unit of Government" that can only be created by the City Council. TLGC 392 requires annual reporting to the City Council and gives the Mayor authority to remove THA Commissioners. Why would two lawyers, the City Attorney and Mayor, both long time friends of Mr. Ed Komandosky, determine fraud and theft from THA was not a matter of City concern? Hejl's and Ancira's actions, claiming THA was not part of the City, were obviously designed to mislead the public and avoid any appearance of responsibility.
11. Ted Hejl charged THA for legal advice and services against Mr. Ed Komandosky while Ted Hejl was employed by Mr. Komandosky as legal counsel for LBCWCID. THA records show that Ted Hejl accepted at least $56,644.27 from THA for work on lawsuits against Mr. Komandosky. Taylor City Attorney Ted Hejl violated legal ethics by taking money for legal services against Mr. Komandosky while employed as a financially compensated subordinate to Mr. Komandosky. A clear “conflict of interest.” Ted Hejl’s expensive legal work for THA has gained THA nothing. Dietz & Jarrod, referred to the case by Ted Hejl, received at least $146,222.79 from THA.
12. The lawyers representing Mr Shorts, and the non-profits, to include Mr. Komandosky probably knew their client was the President of the LBCWCID and Ted Hejl was the legal counsel for the LBCWCID. However, there was no mention of that conflict of interest. A conflict, which was a clear ethics violation. The records show the non-profits paid $258,389.00 to their lawyers by the end of 2016. That money came from the stolen properties. No matter which side, the taxpayers were financing it all. Quite a racket. Ted Hejl doesn’t call law enforcement. Ted Hejl lets the statute of limitations expire. Ted Hejl makes it a financially rewarding civil lawsuit for all the lawyers involved. Not hard to figure out. The taxpayers lose the property and money and then pay for both sides of the legal contest trying get their property back while THA’s lawyer, Ted Hejl, has a major conflict of interest. It leaves little doubt about why THA hasn’t seen progress in the lawsuit.
13. The original THA lawsuit was filed on January 7, 2015. The lawsuit claimed Level 3 discovery would be conducted under Texas Rules of Civil Procedures. However, under Ted Hejl’s leadership, not one person involved on either side of the lawsuit has been deposed since the multi-million $ lawsuit was filed over 6 years ago. A “deposition” is the common legal process of documenting asking witnesses and suspects questions, under oath, for investigation or in preparation for court trial. Depositions in this matter would be readily available to the public under the Texas Public Information Act. The failure to depose witnesses and suspects, in such an obvious case, suggests Ted Hejl did not want to ask any documented questions which would become public, revealing the sincerity of the deposition. The City should seek to determine if the Dietz and Jarrod firm supported or objected to the “no criminal complaint and no deposition” strategy for THA’s success.
14. Texas Local Government Code Chapter 303, Texas Public Facility Corporation Act was amended by the Texas Legislature in 2021 to include the designation of non-profits created by a municipal housing authority as Public Facility Corporations, regardless of the date the corporation was created. (See Section 303.002.) This 2021 amendment to the law meant there was no legal grounds for the fraudulent transfer of the non-profits to Mr. Komandosky's control as a "private" non-profit. On October, 14, 2021, Ted Hejl filed a petition for a Writ of Mandamus based on the TLGC 303 change: Williamson County 15-0021-C277. However, since filing that petition, no hearing has been set. The law is so clear, that the petition would be difficult for any court to deny. Following my discussions with a member of the THA governing body, I was told Ted Hejl has repeatedly refused to set a date for the hearing. If the hearing is not completed, there will be no court order and the financial losses to the City of Taylor will continue and Mr. Komandosky will benefit in violation of Texas Law. Taylor's Mayor Rydell, is a lawyer, and has been made aware. While knowing he could order Mr. Hejl to explain why Hejl refuses to set a hearing for the Writ of Mandamus, Mayor Rydell has done nothing and the losses to the City will continue. Mr. Rydell appears to be operating in concert with Mr. Hejl in continuing the financial losses to the City.
15. Ted Hejl’s City Attorney contract requires “timely and accurate” legal advice to the City of Taylor. Ted Hejl did not advise THA to make a criminal complaint concerning the theft of millions $ in assets and money from THA. No criminal complaint means no criminal investigation by qualified and independent authorities. Ted Hejl did not notify the Mayor. Ted Hejl’s legal maneuvering has allowed criminal statutes of limitations to expire, to the detriment of THA, a division of the City of Taylor. THA has seen no favorable progress on the THA civil litigation. Ted Hejl’s legal advice has sustained the loss of $ millions to the City. A loss which continues to increase with time.
16. THA is a division of the City of Taylor and has paid more than $200,000 in civil legal costs, at Ted Hejl’s direction, for crimes committed against THA. Ted Hejl, as Taylor City Attorney, harmfully and knowingly failed to act in the City’s interest. Ted Hejl has caused the City to lose multi-millions $ from housing programs the Texas Legislature and Taylor citizens deemed essential to the community. The losses continue. Ted Hejl has blatantly violated the Texas State Bar Ethics code. As Taylor City Attorney, Ted Hejl has materially supported corruption and presents a continuing corruption threat to Taylor law and order.
17. The current Taylor Mayor, Brandt Rydell and Jessie Ancira are both lawyers and have been aware of all the information in this document for more than the last three years. Both have been closely allied with Ted Hejl and Ed Komandosky and their inaction brings discredit to the legal profession and violates their oaths and ethics by hiding and ignoring such crimes to benefit City Attorney Ted Hejl, Mr. Steven Shorts, and LBCWICD President Mr. Ed Komandosky.
18. As shown by the March 8, 1994 Mallard Run Articles of Incorporation filed with the Texas Secretary of State, Ted Hejl was named a founding Director of the non-profit corporation. A critical issue in the THA lawsuit concerns the formation of Mallard Run non-profit. Ted Hejl is a key witness in the civil case C-0021-C277, and that fact should have disqualified Hejl from providing any legal service to THA in the matter.
19. Additional information on the THA matter is available at the following links: