Utah Transit Authority’s vice chairwoman fears lawmakers could jeopardize the transit agency's immunity deal with federal prosecutors

Trent Nelson | The Salt Lake Tribune Utah Transit Authority officials hold a news conference to discuss an ongoing federal investigation and reforms they have enacted, at UTA headquarters in Salt Lake City, Tuesday April 4, 2017. From left are UTA Board Chair Robert McKinley, CEO and President Jerry Benson, General Counsel Jayme Blakesley, and Vice Chair Sherrie Hall Everett.

A planned massive overhaul of the Utah Transit Authority includes a last-minute change that one transit leader is warning could sabotage the immunity deal UTA struck with federal prosecutors last year.

The change in question would shift UTA’s legal representation from its own general counsel’s office to the office of Utah Attorney General Sean Reyes — and that could jeopardize the 11-month-old immunity agreement, warns Sherrie Hall Everett, co-vice chairwoman of the transit authority board.

“Eliminating the office could impact the Non-Prosecution Agreement [or] at the least threaten the [agency’s] ability to fulfill its obligation utilizing the extensive knowledge that exists in that office currently,” Hall Everett warned Wednesday in an open letter addressed to state senators.

“The investigation is ongoing and essential to resolving the corruption that was strangling the agency,” she said.

Matt Sibul, UTA governmental affairs director, told reporters Tuesday that he didn’t believe the proposed legal-team switch would impact the immunity deal, but did not elaborate. He did say the transit agency would try to reverse the proposed change.

A statement from UTA Wednesday said Sibul’s response was more noncommital, saying he recalled it as, “I don’t know.… I can’t speculate on that.”

U.S. Attorney for Utah spokeswoman Melodie Rydalch said Wednesday her office had no comment.

Hall Everett made clear she was not speaking for the entire transit board but said she felt compelled to speak out about how the change — materializing in a last-minute amendment Tuesday on the House floor — wasn’t properly vetted.

Abolishing the UTA General Counsel’s Office and instead getting legal representation from the AG’s Office has been touted as a way to save hundreds of thousands of dollars.

The latest version of SB136, hammered out by House and Senate negotiators Wednesday night, includes the shift of legal representation but gives UTA until July 1, 2019, to complete it.

The immunity deal announced by U.S. Attorney John Huber and transit officials last April was a two-way street. UTA agreed to fully cooperate with an ongoing criminal investigation of former UTA board members and others and to work under oversight of a federal monitor for three years. Huber’s office, in turn, agreed not to prosecute the agency.

So what happens if UTA’s ability to cooperate is hampered by new legal representation?

“I think you can imagine some of the nuances. Does the prosecution agreement go away?” Hall Everett asked.

If so, that could subject the agency to the risk of prosecution, she added.

“Which is unfortunate because currently, as far as I know, no one at the agency is under investigation. So now you’re asking an agency that has cleaned up its act, put the reforms in place, demonstrated that to the AG’s office — and now is asked to atone for decisions made by previous people? I think taxpayers should be concerned about that.”

Everett Hall also said she wonders about a possible conflict of interest.

The Utah AG’s Office spent years investigating alleged corruption at UTA, including allegations of insider dealing involving land purchases affiliated with transit-oriented developments.

It eventually referred the matter to the feds. Now to return the agency’s legal representation and all the compliance issues associated with the nonprosecution agreement to the AG might pose serious conflicts, Hall Everett speculated.

And she also questioned whether the AG is equipped to work under oversight of a federal monitor, saying such an arrangement could “disrupt” the separation of powers.

UTA agreed as part of its deal with the feds to waive attorney-client privacy guarantees, meaning legal documents involving its attorneys could make their way into the hands of federal prosecutors.

“Those are the questions we have to answer. I don’t think they’re being answered. I don’t think they’ve been explored or considered,” Hall Everett said.

She also pointed to a possible conflict involving civil legal action commenced against UTA by former agency general counsel Bruce Jones, who had a deal for hundreds of thousands of dollars in bonuses and retirement credit that was later rescinded as being improper.

Because that agreement was signed by House Speaker Greg Hughes while serving in his role at that time as UTA board chairman, Hughes has been identified as a key witness in the potential lawsuit.