A top executive for The Broadmoor hotel knowingly flouted state regulations and then lied about it to a judge, according to two former hotel employees who have filed a complaint against the hotel with state regulators.
The ex-employees, Joe Archuleta and Keith Nietert, allege that The Broadmoor's finance director, Jim Flood, transferred operation of the five-star resort's transportation department which provided sedan, limousine, shuttle and bus service to hotel guests, employees and the general public to an outside contractor without obtaining required regulatory approval.
And, when asked about the transfer during a regulatory hearing last year, Flood misrepresented the facts of the case, the two are claiming.
"He did lie," Archuleta said. "He said a lot of things that weren't true."
If the administrative law judge currently considering the complaint rules against The Broadmoor, it could have a potentially significant impact on the hotel. The judge could levy hefty fines or even take away the license under which a contractor provides the hotel's transportation services.
"If the judge rules the way we think she will, they're going to have some big problems," Nietert said.
While Broadmoor officials would not comment on specifics of the case, the hotel's attorney, Kyle Hybl, said he believed the facts were on the hotel's side.
"I am confident in The Broadmoor's position," Hybl said.
Last year Archuleta and Nietert, both of whom worked for the hotel's now-defunct transportation department, filed a complaint with the state Public Utilities Commission (PUC), which regulates commercial motor carriers. Under state law, anyone who provides paid transportation services must be licensed by the commission.
The Broadmoor was first licensed in 1928, according to Hybl. The hotel's transportation department, popularly known as the Broadmoor Garage, did $1.6 million in business and earned an 8-percent profit in 2001, according to Archuleta, who managed the department at the time.
But in November 2001, employees found out that the hotel was planning to shut down its transportation department and contract out its transportation services to Ramblin Express Inc., a local company.
Of the department's approximately 40 employees, about 30 were laid off, Archuleta says; the rest got other jobs at the hotel.
Archuleta says he became concerned because it appeared that the hotel was planning to carry out the switch without obtaining required PUC approval to transfer its motor-carrier license to Ramblin. But when he discussed this concern with his boss, Flood, it was ignored, Archuleta claims. He says his expressions of concern ultimately got him fired.
Though The Broadmoor would eventually receive approval to transfer the license in March 2002, it went ahead and transferred its transportation services to Ramblin Express almost three months earlier, on Dec. 31, 2001, Archuleta and Nietert contend.
Under state law, because the hotel shut down the department before its license had been transferred, the license should actually have ceased to exist, the two contend. And if it no longer existed, it couldn't be transferred to Ramblin Express, they assert.
The two say it also angered them that as part of the transfer, the hotel's employee shuttle was eliminated. Many hotel employees, some of whom are foreign guest workers, depended on the shuttle to get to work, they say.
"They're our friends," Archuleta said.
Making matters worse, when a regulatory hearing on the proposed license transfer took place in February 2002, Flood lied about the transfer, Archuleta and Nietert contend.
According to an official transcript from the hearing, Flood admitted to Administrative Law Judge Ken Kirkpatrick that The Broadmoor had indeed shut down its transportation department on Dec. 31, 2001. Hybl, the hotel's attorney, subsequently confirmed the information but said the hotel continued to provide some transportation services through its "guest services" department until the license transfer was approved.
Flood testified that he hadn't realized at the time that he needed formal PUC approval before ceasing transportation operations.
That was a lie, according to Archuleta and Nietert. Archuleta maintains he had several conversations with Flood prior to the transfer, and wrote several memos, in which he explained the need for official approval.
And when it was pointed out to Flood during the February 2001 hearing that The Broadmoor couldn't cease transportation operations without approval, Flood promised the judge he would restart the operations immediately.
"I will do it first thing in the morning," Flood said.
But he never did, according to Archuleta and Nietert.
Meanwhile, another former hotel employee also claims he was fired for raising concerns about the case. After the February 2001 hearing, Broadmoor driver Val McDaniel says he warned hotel officials that Flood's testimony could get the hotel in trouble. He says he was suspended and later terminated as a result.
"All I was trying to do was tip them off," McDaniel said.
When he filed for arbitration, claiming wrongful termination, the hotel turned around and accused him of having spread false statements about the case, and it threatened to take him to court for "slander and defamation," McDaniel says.
Following the rules
On Jan. 28 and Jan. 29, the PUC examined Archuleta and Nietert's complaint during a two-day hearing in Colorado Springs, presided over by Administrative Law Judge Mana Jennings-Fader, Several witnesses testified, including Flood, the hotel's finance director.
At the hearing, Flood claimed the discussions with Archuleta about regulatory requirements had never taken place. And when presented with the memos that Archuleta said he had sent him, Flood denied having received them.
"I have never seen these memos until this complaint was filed," Flood testified.
Archuleta and Nietert said neither of them is asking for any personal relief in the case, only that The Broadmoor be made to comply with regulations. Neither has any personal interest in the outcome, they maintain, although Archuleta says he is in arbitration with the hotel over his termination.
Meanwhile, when asked, the two couldn't point to any potential gain that The Broadmoor might have realized by allegedly flouting regulations. However, they opined that Broadmoor executives arrogantly believed they simply didn't need to follow the rules.
"The PUC is a nuisance" to them, Nietert said. "'We're The Broadmoor; we do what we want to do' that's basically the attitude."
Judge Jennings-Fader is expected to issue a decision late this month or early April.