The Denver City Council unanimously approved giving Auditor Timothy O’Brien the authority to subpoena contractors at its meeting Monday.

The action adds legal teeth to an office that, in the past, has struggled with contractors choosing not to participate in an audit despite roughly 95% of city contracts having an audit clause, according to O’Brien.

The city amended its charter – the rules outlining governance in Denver – in 2008 but the auditor’s subpoena power was not discussed or added.

“The charter changed in 2008 and that would probably have been the right time to ask the question,” O’Brien said after the vote. “Nobody asked the question then. Here we are and we got it fixed.”

The council previously considered this measure in July but adoption was postponed twice. Some councilmembers questioned the need for the auditor to have expanded subpoena powers.

One councilmember said O’Brien utterly failed to provide an example of where the subpoena power would be needed.

In a statement released after the final vote, O’Brien’s office said the bill is a “win for transparency and accountability.” The bill also has a tool built in that allows the auditor or the auditee a path toward conflict resolution concerning the “production of information.”

In the event of an impasse, an independent hearing officer can be brought in. This officer may side with the auditee, adding extra protections for sensitive information or giving the organization more time to respond to the audit. Of course, the officer may side with the auditor and “compel” an organization receiving city – and by extension, taxpayer – money to cooperate with an audit, as they are contractually required to.

All this added together means the city is supporting “efficient information sharing and timely reporting to the public,” the release said.

“In the event that we’re conducting an audit of somebody who’s doing a contract with Denver, who have already agreed that we can conduct an audit, from time to time they won’t cooperate,” O’Brien said. “This gives us this ability to force a contractor to provide documents that the office may need to complete the audit.”

“We are mandated under (the city charter) and mandated under law and contractually the contractors have agreed to let us conduct an audit. So, this change brings it all together,” he said.

The year has been generous to the auditor’s office. In April, the City Council granted the office increased power to investigate wage theft, and the language from that bill was used to structure the subpoena bill.

Councilmembers said the city has the “gold standard” in wage theft protections, though Denver used to be the epicenter of violations. In January, O’Brien found certain gig companies had violated city protections and ordered them to pay $1 million. In November of last year, the auditor found a record $2 million in unpaid wages, ordering those amounts be paid to the affected workers.

In a May 2022 report, the Colorado Fiscal Institute estimated that, statewide, there was about $728 million in wage theft annually. This results in about $45 million in lost tax revenue, according to the report. In Denver, the city’s labor department has managed to increase its recovery of wages by about 24 times in nine years, ballooning from $84,232 in 2015 to just over $2 million last year, according to an annual wage theft report.

Though both bills are similar in structure, Monday’s bill incorporated feedback heard from Denver’s business community, the release said. Changes included increased cybersecurity protections and “more lenient fine structures.”

But the most notable difference is the process by which the auditor’s office will seek approval for subpoenas. Rather than issuing them on his sole authority, O’Brien must seek the approval of the audit committee – which he is the chairman of – before a subpoena may be issued.

“As the chairman of the Audit Committee, I look forward to working with my colleagues to ensure an effective and secure process for approving subpoenas,” he said. “I hope the need for the Audit Committee to issue subpoenas happens rarely, but I am glad to know this tool is available if needed.”

When first introduced, O’Brien could only recall two occasions in the past five years where a subpoena could have been used for a city contract. Still, there are procedures to follow and the auditor will have to first send a written request for the records, giving the contractor 14 days to comply.

If they do not, subpoena powers kick in

“Passing this bill is in the best interest of the people we serve,” O’Brien said.