Thursday, October 18, 2007

S and WB sell-off is sunk

Times-Picayune (New Orleans, LA)

April 20, 2004 Tuesday

Sand WB sell-off is sunk, Nagin says;
New draft bid hasn't drawn firms' interest

BYLINE: By Martha Carr; Staff writer


LENGTH: 1092 words

After seven months of silence, Mayor Ray Nagin said he's finally ready to call an end to the contentious privatization drive that has consumed the Sewerage and Water Board for the past five years, as two administrations and scores of residents debated -- often hotly -- whether to turn over the city's sewer and water systems to a private company's control.

Nagin last week said he will officially declare the $5 million effort dead at one of the board's next several monthly meetings, primarily because a new draft bid has failed to attract three private firms interested in operating both the sewer and water systems. The water board meets Wednesday and again on May 19.

"In the next couple of meetings, it will be done," Nagin said last week. "We've got three companies that are interested, but one wants the whole piece and the other two just want part of it. And you know that's not going through. I just don't see it, unless some miracle happens."

Drive began in 1999

The effort to privatize the city's sewer and water systems was initiated in 1999 by City Councilman Eddie Sapir, who presented the idea as a way to stave off future rate increases by holding down costs at the troubled agency.

At the time, the water board had inked a deal with the U.S. Environmental Protection Agency to spend more than $200 million repairing leaky underground sewer pipes that had been polluting Lake Pontchartrain, or suffer massive fines. Board members knew the expense of the 14-year job -- whose price tag has since grown to $650 million -- would mean huge rate increases, a politically dicey prospect. So they began investigating private management as a way to save money.

Former Mayor Marc Morial became the effort's key proponent and went on to shepherd the 20-year, $1 billion prospective contract through its first incarnation. Observers found plenty to criticize: Millions of taxpayer dollars went to consultants who drafted the bid proposals, while the three major companies interested in the job -- United Water, US Filter and OMI/Thames -- each put politically connected consultants on the payroll. Critics also said the process was often disorganized, confusing and not in the public's best interest.

The effort ended abruptly in October 2002 with a 6-5 vote, when opponents on the board orchestrated a coup to reject all bids.

Not enough bidders

Despite the controversy, Nagin chose to revive the beleaguered drive, promising to fast-track the process and solicit new bids by February 2003. More than a year later, the water board has yet to issue a second bid document.

Nagin says that's because there aren't enough private companies showing interest in the job to ensure the water board will get a competitive price. At least one company, United Water, has said it pulled back in part because of a move by privatization opponent and former City Councilman Jim Singleton to change the City Charter to require voter approval for any large water and sewer privatization contract.

Last year legislators wrote the same provision into state statutes, further solidifying what proponents called a major roadblock to attracting multiple companies. United Water withdrew from the process last June, leaving only Veolia Water North America, formerly known as US Filter, and a S and WB employee group publicly saying they would bid on the job. A Veolia spokesman declined to comment Monday.

Nagin said he's talked to companies about the possibility of splitting the job into smaller parts, such as water only or sewer only, but still hasn't gotten the response he thinks he needs.

"So we are probably going to exit out," he said.

'Organism' repels change

It won't be the first time.

Nagin, at his own admission, has run into numerous political roadblocks in his other attempts to reform the quasi-state agency. Most recently he found himself unable to garner the support he needed among New Orleans lawmakers to pass two proposed bills in the current legislative session. One bill would have removed the mayor and three City Council members from the 13-member board, and a second would have brought the agency under city control.

Nagin has since agreed to ask the Legislature for permission to convene a committee to study the idea.

"I think it's an organism that has its own white blood cells and it attacks anything that looks like it's different and is invading the body," Nagin said of the water board. "Think about it. It is an organism that repels change. It's unbelievable."

So now Nagin is setting his sights on finding a permanent replacement for former Executive Director Harold Gorman, who was fired last June. City Councilman Marlin Gusman, who is chairing the board's search committee, said a list of finalists for the job should be presented to Nagin in the next several months.

Once a new executive director is in place, Nagin said he wants to work with that person to re-engineer the agency. That task, he hopes, will be made easier after more changes are made to the board.

Support for shifting focus

The terms of board members Henry Dillon and Bill Grace expire this year, according to a board spokesman. A third board member, Ben Edwards, is serving at the mayor's pleasure after his nine-year term expired last November.

"By that time the board's makeup should change a little more, and we should be able to get it done," Nagin said.

That's music to the ears of John Wilson, who led the employee group that bid on the first privatization proposal. Employees have long advocated keeping the agency under public control and restructuring it to provide better, cheaper services to customers.

"That would completely make sense," Wilson said. "The leadership of the organization is an issue that has to be settled, and we could definitely go along with that."

Gusman and board member Tommie Vassel said they also would support shifting focus from privatization to the executive search and re-engineering, after months of the issue lying dormant.

"I do think it is right for us to move forward," Gusman said. "When you have issues of that magnitude hanging over your head, it is difficult to move at the speed you ought to."

Vassel said: "We've explored the options, looked at what other cities and agencies have done, and we're probably at that point where the board feels comfortable voting one way or another. The mayor has apparently reached that conclusion as well."

Note: For some reason, blogger wouldn't publish ampersands, hence the "S and WB's"

Friday, September 21, 2007

3rd place fits bill for N.O. contract Times Picayune

Times-Picayune (New Orleans)

March 16, 2005 Wednesday

3rd place fits bill for N.O. contract;
Winning firm rated last, lacks experience

BYLINE: By Martha Carr, Staff writer


LENGTH: 2734 words

Mayor Ray Nagin has awarded a politically active company with no experience in the criminal justice field a contract to create a home monitoring program for municipal offenders, a deal the Nagin administration says could save the city hundreds of thousands in jail costs this year alone.

The mayor passed over two higher-scoring bidders to award a one-year contract with five one-year extensions to Community Based Corrections LLC, a local, minority-owned company created in October 2003 by Burnell Moliere, Jimmie Woods and Ray Valdes. All three have close political ties to District Attorney Eddie Jordan and former Mayor Marc Morial.

A three-person selection committee gave Community Based Corrections the lowest score of the three qualifying bidders, city documents show. The company's price also was the highest, but the mayor allowed CBC to rework its proposal to bring costs more in line with the other two bids, records show.

The contract is capped at $3 million, but the value depends on how many offenders are ordered to enroll.

Neither of the two competing bidders, which included another local, minority-owned firm, was allowed to resubmit their proposals for the Municipal Court job.

The city did renegotiate, however, with minority-owned Total Sentencing Alternatives Program, which received the second highest score, to provide electronic monitoring in Criminal District Court under a separate contract. That contract has yet to be finalized.

Because the contracts are for professional services, Nagin is not required by law to select the lowest bidder.

While the mayor previously has clashed with some of the politicians that CBC's officers are close to, campaign records show that companies owned by Moliere and Woods have begun contributing to Nagin since he took charge at City Hall.

Metro Disposal, a trash-hauling company owned by Woods, gave the mayor $2,500 in February 2003 and another $2,500 in May 2004. Moliere's janitorial company, AME Services, contributed $5,000 to Nagin in February 2003. Both companies received public contracts under Morial and have maintained them during the current administration.

Nagin campaign finance records filed with the state report no donations by either of the two firms that bid unsuccessfully against CBC or by their chief executive officers.

But Nagin's chief administrative officer, Charles Rice, said politics played no part in the mayor's selection of CBC. Rather, the mayor wanted to save the city money and help out local, minority-owned businesses. When asked why the city didn't award both contracts to Total Sentencing Alternatives Program, the minority bidder with the most experience and a higher rating by the selection committee, Rice said the mayor wanted to "spread the wealth."

"I think what the public needs to know is that we selected two vendors, both African-American owned companies, both local vendors, and if we can receive the same service at virtually the same cost from a local vendor, I think it's in the city's best interest to keep the money here at home and employ local people rather than send the money to Georgia," Rice said, referring to the highest-rated and cheapest bidder, PPS of Lawrenceville, Ga.

PPS is a subsidiary of the publicly traded company Universal Health Services.

Rice also said it is his understanding that Valdes is no longer a principal of CBC. Moliere said that's true, but that Valdes continues to provide marketing services for the company. Former Jefferson Parish Council President Robert Evans Jr. also worked for a time as the company's executive vice president, according to CBC's bid documents. Moliere said Evans is no longer with the company.

Cheaper way to monitor

Home monitoring systems have become popular in recent years as cities nationwide grapple with the skyrocketing costs of incarceration. Using voice recognition technology, electronic bracelets or GPS tracking, home monitoring allows nonviolent offenders to remain out of jail while fulfilling the terms of their court sentence.

Proponents say it's an especially viable concept in Municipal Court, where judges typically deal with minor offenses, such as public drunkenness, lewd conduct or criminal trespassing.

But until now, Municipal Court has used home monitoring on a limited basis, with the offender picking up the cost. Rice said enrollment wasn't high enough to significantly cut the city's jail costs, which have ballooned from $29 million in 2002 to $35.1 million last year for all offenders.

"We live in a very poor city, and most of the individuals in Municipal Court are indigent and do not have the financial wherewithal to pay costs," Rice said.

So the city has moved to government-financed home monitoring system, which Municipal Judge John Shea said gives judges an alternative to throwing offenders in jail when they don't pay fines. Last year, almost 34,000 offenders went to jail after failing to pay court-ordered fines, Municipal Court Clerk Ronald Lampard said.

Now, instead of paying $22.39 a day to keep a municipal prisoner in jail, the city will pay $7.73 to CBC for voice monitoring and probation management, a potential savings of $14.66 per day.

The city is required to pay the cost of jailing residents who break city laws, as well as those awaiting trial on state charges.

If CBC monitors 250 to 400 offenders a day -- an average that city officials say is a reasonable estimate -- it could save taxpayers $1.3 million to $2.1 million a year.

In the program's first two months, a total of 364 offenders were enrolled, at a cost savings of $159,030, Moliere said.

How it works

The monitoring works like this:

An offender is sentenced to home monitoring, and a case worker develops a call schedule to fit the nature of the offense. The offender then calls in and registers his or her voice, and is paged, or required to call in on a prescribed schedule, depending upon where the offender is supposed to be at a certain time. If an offender fails to call in or the system detects another voice, the authorities are notified.

Rice said there is no way the city can lose under the program. CBC doesn't get paid unless offenders enroll in the program, and the more offenders enroll, the greater the savings in jail costs, he said. Judges also have the option of requiring an offender to pay for the monitoring, city officials said.

"I assure you this is not set up for anybody to make a killing off of anything," Rice said. "It's all about reducing the amount of money we pay to the sheriff, and making things more efficient."

A spokeswoman for Orleans Parish Criminal Sheriff Marlin Gusman, whose budget could be adversely affected by a decrease in jail population, said the sheriff has seen little impact thus far.

Lowest bidder skipped

But records show the city could have saved more had it awarded the contract to the low bidder.

The city's request for proposals was broken down into three parts: home monitoring, probation management and fine collection.

If the city had hired PPS, the cheapest bidder and the company with the highest score from the selection committee, it would be paying $7.50 per day for voice monitoring and probation management, compared with $7.73 a day with CBC.

Although the difference is nominal, CBC also gets 10 percent of every delinquent fine it collects, down from the 38 percent it originally proposed. PPS offered to do fine collection free of charge.

Clay Cox, chief executive officer for PPS, said even CBC's lowered price accounts for some "good margins." He also said his company would have welcomed an opportunity to renegotiate its bid.

"Getting a percentage of a fine and a fee, that's crazy," Cox said. "There is plenty of money to be made by doing it right and treating people fairly. The fine money belongs to the taxpayers."

William Welch, chief executive officer of Total Sentencing Alternatives Program, declined to comment because of his company's ongoing negotiations to monitor pretrial detainees in criminal court using electronic bracelets.

But the president of ShadowTrack Technologies, the Covington subcontractor CBC originally proposed to do the voice monitoring, said his company typically charges offenders $4.50 a day to enroll in the program, which accounts for the cost of the service and a profit to his company. Comparatively, the city has agreed to pay CBC $6.75 a day for the same type of service.

ShadowTrack did not submit an independent bid.

Short on experience

In addition to the price issue, the city selected the firm with the least experience in the criminal justice field.

Woods runs a trash-hauling company. Moliere's experience is in janitorial services and public housing, according to his resume. Valdes has worked as a financier specializing in large municipal leases.

In comparison, PPS has been in the electronic monitoring business for 16 years and holds contracts with the cities of Atlanta, Salt Lake City and Montgomery, Ala., to name a few. The company also worked with judges in New Orleans municipal and traffic courts for two years doing electronic monitoring, probation monitoring and fine collection, with offenders picking up the cost of the service, according to its bid.

TSAP began working as a protégé of PPS when the company was under contract to New Orleans' municipal and traffic courts in 2000 and 2001, and it has run the program on its own since then. It has five years of experience working in Orleans Parish courts, according to its bid.

As for CBC, the New Orleans contract is its first major job. The company has no real experience. In its bid, it cited instead the experience of three subcontractors it proposed using, including ShadowTrack.

None of the subcontractors listed in the bid is now working on the contract, Rice said.

Subcontractor severs ties

ShadowTrack president Robert Magaletta said he cut off his relationship with CBC late last year after the company first asked him to lower his price, then, without notifying him, approached a competing vendor about working on the city contract.

ShadowTrack had been with CBC from the start, signing the company on as its exclusive dealer in the metro area in October 2003. But CBC produced no significant business for ShadowTrack, Magaletta said, never having more than 10 private-pay offenders on the service at any one time.

Magaletta also said he grew increasingly leery of dealing with Woods and Valdes, who have received subpoenas from a federal grand jury investigating city contracts meted out during Morial's administration.

"I had been hearing about the problems these people were having involved with city of New Orleans," he said. "I just preferred to stay away from this group."

Moliere said in a written statement that the separation was because of "philosophical business differences and different approaches to the marketplace."

He also said CBC has provided services to criminal courts in Orleans and Jefferson parishes, New Orleans Traffic Court, and the Louisiana Department of Parole and Probation. When asked whether the company held any contracts with those agencies, Moliere said it had relationships with individual judges and agencies, but no formal contracts. He did not specify a total number of clients enrolled.

CBC replaced ShadowTrack with Biometric Corp. of Dallas, whose president says the company has six years of experience in voice-based home incarceration systems.

CBC has hired its own staff to provide probation services, Rice said. For fine collection, the company has partnered with Gavin & Associates, a woman-owned company that will fulfill the 35 percent disadvantaged business enterprise goal for the contract, Rice said.

New York deal under fire

But what CBC lacks in practical experience, it more than makes up for when it comes to the politics of cutting deals with governments.

Although the New Orleans contract has drawn little attention, a similar CBC arrangement in Buffalo, N.Y., is being investigated by the FBI.

Erie County comptroller Nancy Naples has alleged that George A. Holt Jr., chairman of the county legislature, attempted to secretly award CBC a $3 million no-bid contract by slipping in a last-minute budget amendment in a late-night meeting Dec. 8. Naples told the Buffalo News last week that she was interviewed by federal agents for more than an hour about what she says was an "illegal" deal.

When questioned about the amendment, Holt told the Buffalo News that his staff inadvertently specified Community Based Corrections in the resolution, when his intent was only to reserve money for a later competitive bidding process. Holt has agreed to meet with FBI agents later this week.

He also told the newspaper that he flew to New Orleans in August to visit the firm, during which time CBC's principals held a fund-raiser for him at Pampy's Creole Kitchen, a political hot spot owned by Morial confidant Stan Barre. Campaign finance reports show that Holt received three checks at that function: $500 from Woods, $200 from Barre and $250 from bail bondsman Blair Boutte.

Barre, who has been subpoenaed in the ongoing federal probe of contracts awarded under Morial, said he has nothing to do with Community Based Corrections.

"I'm telling you, I wish those guys well, but I've got nothing to do with that bracelet stuff."

As for his contribution to Holt, Barre said: "I think I wrote him a check because Burnell (Moliere) begged like I don't know what, and he's a good customer," Barre said.

Boutte, president of the small eastern New Orleans political organization DOVE, also confirmed writing Holt a check. But he said he is not affiliated with CBC and did not attend the fund-raiser at Pampy's.

Holt got only one other contribution during the six-month reporting period that ended Jan. 15. He told the Buffalo News that accepting the $500 from Woods was a mistake and that he intends to return the money.

Active in politics

In New Orleans, the political connections necessary for deal-making were already well established.

Woods has a piece of the city's waste disposal contract through his company Metro Disposal Inc. Woods also has served on fund-raising committees for Jordan and donated $10,000 to Morial's third-term effort through Metro Disposal.

Moliere's Norco-based janitorial company, AME Services, has major contracts with the Orleans Parish School Board and the New Orleans Aviation Board. However, Schools Superintendent Tony Amato has threatened in recent months to cancel AME's contract, claiming the company has collected millions while leaving campuses filthy.

Moliere also contributed to Jordan, served on his fund-raising committees and headed his transition team. Moliere and AME Services contributed $10,000 to Morial's attempt at a third term.

Valdes, based in Metairie, arranged the financing for numerous high-dollar equipment leases at City Hall during Morial's tenure, including a controversial $81 million energy-efficiency contract with Johnson Controls Inc. that has been a focus of the ongoing federal investigation of Morial-era contracts. Valdes also arranged leases for hundreds of city buses, police cars and other vehicles. Top Nagin officials have complained bitterly about the above-market financing fees in some of those deals, which won't be completely paid off until 2022.

The financier contributed $5,000 to Jordan's 2002 campaign for district attorney through one of his companies, American Lease Financing LLC. He and a relative also made corporate and personal contributions of $15,000 to Morial's third-term bid. Valdes is the ex-husband of former Jefferson Parish Councilwoman Anne Marie Vandenweghe.

Metro Disposal and AME Services have likewise come under criticism from the Nagin administration.

In hiring Kimberly Williamson Butler as his first chief administrative officer, Nagin approvingly cited an episode in which Butler, as director of the Downtown Development District, refused to cave into political pressure and award a street-cleaning contract to AME.

Metro Disposal, meanwhile, was written up and briefly put on probation by former Sanitation Director Lynn Wiltz, who said in memos that the company had failed to live up to parts of its contract. Wiltz was fired a few months later, and Rice has said he is satisfied with Metro Disposal's performance.

Ditto for AME, he said.

"My experience with AME has been positive," he said. "They've done a pretty good job for us maintaining Gallier Hall and several other buildings."

Monitoring political games -- Times Picayune editorial

Times-Picayune (New Orleans)

March 17, 2005 Thursday

Monitoring political games


LENGTH: 535 words

You'd think Mayor Ray Nagin would want to foster companies like Total Sentencing Alternatives Program.

The company is locally based. It has several years of experience in running a home monitoring program for Orleans Parish courts. Its owners are African-American, and encouraging the growth of minority-owned businesses has been a goal of Mayor Nagin and his recent predecessors.

After New Orleans advertised a contract to create a home-monitoring program for municipal offenders, an evaluation committee ranked TSAP's proposal second among three. But you could argue that the company deserved the contract -- or at least a chance to improve its bid.

Apparently, though, TSAP lacked the connections necessary to land the Municipal Court contract. So did the highest-rated firm, Georgia-based PPS, which offered the best prices and has been doing similar work across the country for 16 years.

In a decision that looks like pure political hackery, city officials gave the Municipal Court job to the lowest-ranked bidder, Community Based Corrections LLC. Never mind that the company submitted the highest-price proposal; the city gave CBC, but not its competitors, the chance to come back with a lower price, and the firm obliged.

Home monitoring systems use electronic technology to keep track of nonviolent offenders, and it can be an effective, low-cost alternative to putting people in jail. Chief Administrative Officer Charles Rice is touting the contract as a money-saver.

And maybe it will be. But it's hard to imagine an innocent reason why Mayor Nagin would award a monitoring contract to a company with no significant experience in the area.

The firm was created only in October 2003 by Burnell Moliere, Jimmie Woods and Ray Valdes. Mr. Moliere has a janitorial business. Mr. Woods runs a trash-hauling company. Mr. Valdes, whom company officials say is no longer a principal there, has worked as a financier in large municipal leases. All three men have been involved in lucrative public contracts in New Orleans in the past, and all three have political ties to District Attorney Eddie Jordan and former Mayor Marc Morial.

In awarding them the Municipal Court contract, Mayor Nagin wasn't just helping someone else's supporters. Companies owned by Mr. Woods and Mr. Moliere have contributed thousands of dollars to Mayor Nagin's campaign fund since 2003. Campaign finance records show no such contributions from PPS or TSAP.

PPS' experience might give nonlocal firms pause about bidding on contracts in New Orleans. On some level, taxpayers needn't shed too many tears for TSAP. The Nagin administration is negotiating with the company for a separate monitoring contract at Criminal District Court.

Nevertheless, it's unfortunate that an experienced, locally-based, minority-owned firm lost the Municipal Court job to a politically connected company -- one that will give much of the work to a subcontractor in Dallas. Asked why TSAP didn't get both contracts, Mr. Rice said the mayor wanted to "spread the wealth" between two firms owned by African-Americans. But CBC's owners have benefited handsomely from public largess in the past. Far from helping New Orleans' have-nots, the CBC deal has rewarded the already-haves.

Friday, September 7, 2007


Times-Picayune (New Orleans, LA)

September 15, 1996 Sunday,



LENGTH: 1807 words

In the battle over which pro hockey league will win the right to play in New Orleans, Mayor Marc Morial has already picked sides, and it could cost the city a better brand of hockey.

On Sept. 3, Morial called a news conference to announce that a group of local investors would try to bring an East Coast Hockey League team called the New Orleans Brass to town next fall and that the team most likely would play its first season at the University of New Orleans Lakefront Arena.

The announcement came as a surprise to the Greater New Orleans Sports Foundation, which has spent the past year trying to lure the higher-ranking, and potentially more lucrative, International Hockey League.

Morial's announcement even took some of the prospective Brass investors, most of whom have close ties to him, off guard.

"I don't see what the big rush was," said one of the investors, who spoke on the condition of anonymity. "We don't even have a signed partnership agreement yet."

But timing may be everything.

In an effort to get a leg up on the International Hockey League, which is just one rung below the top-of-the-line National Hockey League, Brass owners want to put their team on the ice next fall, preferably by signing a short-term lease for the UNO arena.

Eventually, both leagues hope to win over state officials and land a contract to bring their team to the new arena being built next to the Louisiana Superdome. The $84 million arena is scheduled to be ready for the 1998-99 season.

If the Brass' strategy succeeds, the East Coast Hockey League not only would get a one-year jump on the rival but would tie up the market. Sports marketing experts say New Orleans can't support two teams.

But the Brass strategy faces several obstacles.

First, the ownership group is shaky. At least one investor said last week that he is considering bailing out.

Second, the UNO arena might not work for hockey. George Lewis, arena general manager, said every other prospective group has passed once it found out how expensive it would be to bring hockey to UNO.

"Anything is doable if you have the time and money, but is it cost-feasible? For one year? I can't see how," Lewis said.

Another option is to use the city-owned Municipal Auditorium, which has more than twice the floor space and easily could accommodate a rink, but Morial said he is not ready to endorse that idea.

Despite the challenges facing the group, local lawyer Roy Rodney, a Morial confidant who would own a piece of the Brass, said the chances of successfully bringing the East Coast Hockey League to New Orleans are "100 percent."

Ray Nagin, another Brass investor, said, "Our focus is to get up and running next year, and it is going to take one hell of a force to stop us from making that date."

The idea of bagging an East Coast Hockey League franchise was brought to Nagin nine months ago by Emmett Moten, a former New Orleanian who is now a top executive for Mike Ilitch, owner of the National Hockey League's Detroit Red Wings. The Brass would be affiliated with the Red Wings, which would provide managerial and other support.

Moten, like most aficionados, had been astonished to see how quickly the sport took off in Lafayette, where the rookie IceGators shattered East Coast Hockey League attendance records by drawing almost 10,000 fans per game in their first season. Leaguewide, East Coast Hockey League clubs averaged 4,900 fans per game last year.

Intrigued by the idea, Nagin, who is the top executive for Cox Communications in Louisiana, began recruiting other investors. One of the first to sign on was Rodney. Others included David White, who owns four McDonald's restaurants in New Orleans, and Stan Barre, owner of Pampy's nightclub in Mid-City.

A couple of months ago, Nagin's team merged with another investor group looking into the East Coast Hockey League. That group included local shopping center developer Darryl Berger, real estate investors Wayne and David Ducote, and Steve Rittvo, president of Urban Systems Inc.

The combined entity, which incorporated as New Orleans Brass Inc. in August, has strong ties to the Morial administration. Six of its eight members have been major campaign contributors to his mayoral campaigns, giving Morial a total of $55,400 in the past three years, campaign finance records show.

The biggest contributor has been Barre, a close friend and political fund-raiser for Morial, who gave him $20,000 between 1993 and 1995.

Barre's ties to Morial date back to the mayor's father, former Mayor Dutch Morial. A former vice squad detective, Barre worked as a driver and aide for Dutch Morial's chief administrative officer, Reynard Rochon. Barre also helped lead an unsuccessful 1983 petition drive to let Dutch Morial run for a third term.

Morial has said Pampy's Restaurant & Bar is one of his favorite hangouts.

Marc Morial asked Rodney to spearhead the city's negotiations with Harrah's Jazz Co. even before Morial took office. Rodney has been the city's chief negotiator during Harrah's bankruptcy proceedings. He has a contract with the Rivergate Development Corp., the public benefit corporation the city set up to be the casino's landlord, which pays him $125 an hour.

Rodney's other partners also have ties to the mayor:

In 1994, Morial hired one of Nagin's key assistants, Michele Moore, to be his director of communications. Moore had been Cox's chief lobbyist and community relations manager. Nagin contributed $3,000 to the mayor in 1995.

Rittvo is an urban planner whose firm, Urban Systems Inc., has been involved in major New Orleans projects dating back to Dutch Morial's term in office, including designing the traffic pattern for the 1984 world's fair and the parking lot for the failed River City casino boats on the Mississippi River.

Berger is a major New Orleans developer with longtime ties to Morial and his family. Berger has contributed $7,500 to Morial's mayoral campaigns, and his firm, Darryl Berger & Associates, contributed $1,000 to Rebuild New Orleans, a group formed to finance an advertising campaign in 1995 promoting Morial's $172 million capital improvements program.

Rodney said the group's connections to the Morial administration have nothing to do with the mayor's endorsement of the Brass proposal.

"Marc Morial hasn't done anything for us at all, except to say he'd welcome the team," Rodney said. "And we haven't asked him to do anything."

But Morial said he has talked with members of the Brass investor group about letting them lease the Municipal Auditorium for the 1997-98 season. In fact, one Brass investor said he thought his group already had a tentative deal.

"I didn't say no, but I also didn't say absolutely, yes, come on down," Morial said. "Like all of these things, you have to sit down and discuss what's possible. We'd lease the auditorium to anybody who has a check."

The UNO arena remains the preferred option, but the arena's floor space is 50 feet too short for professional hockey, UNO officials said. To expand the arena and build a rink probably would cost $1.5 million to $2 million, sports experts said.

Rodney said the group has budgeted about $1.2 million for the project. But Nagin said the investors are prepared to pay no more than a few hundred thousand dollars of that amount.

Doug Thornton, president of the Greater New Orleans Sports Foundation, said it would be difficult to persuade Gov. Foster to pick up the rest of the tab for the state-owned facility because the state already is planning to build a downtown arena.

"I would not want to lobby for that," he said.

If the Brass group ends up cutting a deal for the Municipal Auditorium, Rodney said he would recuse himself from the negotiations. "There will be no conflict of interest, either real or imagined, under any circumstances," said Rodney, who handled the negotiations over Harrah's vacating the Municipal Auditorium, where it operated a temporary casino in 1995, and is paying to restore it for public use.

Harrah's executives have said the restoration plans could accommodate a rink.

Besides trying to find a short-term home for their team, Brass investors hope eventually to win a lease for the new downtown arena. That could be another tough sell.

Foster has said the state will sign a lease with whichever league offers the best deal.

"I do like the idea of the (regional) competition that comes with the East Coast league, but that does not represent a commitment on my part to the East Coast league," Foster said. "Whatever deal we agree to has got to be the most competitive."

The East Coast Hockey League's Southern Division includes franchises in Lafayette, Baton Rouge, Biloxi, Miss., Pensacola, Fla., and Birmingham, Ala. The nearest International Hockey League competitor would be in Houston.

Typically, International Hockey League teams have paid about twice as much in rent as their East Coast Hockey League counterparts. In arenas managed by SMG, formerly Spectacor Management Group, East Coast tenants pay $2,500 to $4,000 per game in rent, while International tenants pay $10,000 to $12,000 per game, said Glenn Mon, general manager of the Superdome and vice president of stadiums and arenas for SMG.

Mon said New Orleans almost landed a team earlier this year. He said an International Hockey League franchise owner eager to move his club to the Crescent City visited in February to line up dates at the Superdome. But, after a few months of work, both sides concluded they weren't able to swing a deal.

The problem, Mon said, was clearing 45 straight days to build a rink in the Dome.

The league hasn't quit trying, however. Thornton said two prospects are still pursuing a deal in New Orleans. One involves an ownership group in Texas that hopes to bring an expansion franchise to town, and the second is a current owner who wants to relocate his team and considers New Orleans his best option.

Thornton said both prospects are committed to the market and hope to get a team here for the 1998-99 season.

Morial said he doesn't take the International Hockey League prospects seriously, partly because neither group has any local ownership. "I strongly favor local ownership," he said.

Thornton said the Texas investors are seeking local investors for their group.

Which league would do best in New Orleans? Saints owner Tom Benson, who also tried to bring an International Hockey League team to the city but gave up last year after failing to get dates at the Superdome, said he strongly favors the International Hockey League.

"I think the IHL is the premium deal for New Orleans," he said. "The ECHL is a brand-new sort of league that has expanded very rapidly and is located in smaller markets. The IHL has been around for 50 years and is in major markets. I think New Orleans is that type of city."

Sunday, April 8, 2007

New meters to bring new ways to buy time -- Times Picayune Dec. 31, 2004

December 31, 2004 Friday


LENGTH: 1709 words

HEADLINE: New meters to bring new ways to buy time;
But they also require hike from car and back

BYLINE: By Frank Donze , Staff writer


With a control panel that looks like the dashboard of a state-of-the-art sportscar, they have begun cropping up on downtown curbsides. ATM machines? Gas pumps? Guess again.

They're the latest generation of parking meters, 6-foot-tall replacements for the old-time bubbles on a stick that have eaten dimes and quarters for decades.

City officials insist you won't need a degree in computer science to make them work, though it will help to be thoroughly comfortable with your cell phone. And a certain amount of hiking will be required, from your car to the meter and back again.

But after much anticipation, this much can be said for sure: They're here -- and almost operational.

City Hall's oft-heard promise that new, high-tech parking meters soon will be hitting the streets of New Orleans had taken on the hollow ring of "The check is in the mail" and "Your table will be ready in a minute."

For more than 10 years running, three successive mayoral administrations heralded the imminent arrival of cutting-edge meters that would accept "smart" debit cards, eliminating the dreaded scramble for pocket change that's never quite enough.

The debit cards still are in the offing. But the first of the futuristic meters, which cost about $7,500 apiece, began popping up around town about a month ago, and they eventually will allow motorists to use credit cards as well as coins -- and even an option, the first of its kind in the United States, to pay for parking by cell phone.

Nagin administration officials said this week that they expect the new system to be running by mid-January and pledged that the "smart" cards and cell phone option will be operational later in 2005.

The project is being handled by a 50-50 partnership between Standard Parking, a national firm that has operated parking lots in New Orleans for 25 years, and Parking Solutions LLC, a local minority-owned company with political ties to City Hall.

The Nagin administration has signed a three-year, $2.1 million contract with the joint venture, including options for three one-year renewals. The company is responsible for operation and maintenance of the meters, which the city projects will generate $4.5 million in 2005, a 15 percent increase over this year's take.

Ultimately, plans call for 400 of the new meters to be scattered about the Central Business District, the French Quarter, the Warehouse District, along Magazine Street and in the Uptown and downtown medical districts. About half of them have been installed so far, with the balance of the job scheduled to be completed by Feb. 1.

The joint venture owns the meters but the city will acquire them under a lease-purchase arrangement. Under the contract, leasing fees will come out of the city's monthly payment of $173,000.

The city will own the meters at the end of the six-year agreement. Their estimated life span is 10 to 12 years.

The space-age look of the new meters, which dwarf the old model, has drawn criticism from some residents of the French Quarter, who say the green towers are out of scale for the historic neighborhood.

"We've heard from some people who say the meters are too modern for areas like the Quarter and Magazine Street," said Mark Boucree, Parking Solutions' chief operating officer. "But we think once everyone sees the convenience they offer, they'll get used to them."

Administration officials hope to put the meters in operation in stages, with the first areas set to go on line in about two weeks, after signage is in place and an informational campaign is under way.

In addition to accepting credit cards and debit cards, the new meters -- like the ones now in use -- will take all coins except pennies. Paper currency, which company officials say has a tendency to jam the mechanism, cannot be used.

The city will retain about 1,000 of the 3,600 or so of the meters currently in use. Those meters, though they accept coins only, were designed to accept a "smart card," and officials with the company that installed them said they have long been ready to introduce one. But Nagin opted to go with the new meters instead.

Officials in the administration say a key selling point of the new devices was their ability to offer a "pay and display" system, already used in several U.S. and European cities, that lets motorists buy parking time that isn't tied to one particular space.

Under the system, two meters located in the middle of the block replace the six to 12 devices that now line many streets. Just like existing meters, the new ones will allow a motorist to buy up to two hours of parking time.

But instead of displaying the time remaining, the new machine spits out a receipt. A motorist will have to return to the vehicle and display the ticket -- which will prominently feature the expiration time -- on the dashboard.

Administration officials say the new system offers ancillary benefits: For one, motorists can move their car to another metered space while there is still time remaining on the ticket. Also, the printed receipt provides a handy record that can be used for accounting and reimbursement purposes.

More revenue expected

The administration's increased revenue projection is based on several factors.

Most important, city officials say the new system will bring the city revenue from 4,500 parking spaces citywide, an increase of about 900. Part of the increase will come from charging people to park in areas where parking is now free.

In addition, they say the new meters will allow a few extra parking spaces to be squeezed out of a street because there are no spaces per se. For example, parking areas that now contain seven striped spaces might now fit eight vehicles. But then, there's nothing to stop sloppy parkers from hogging space, thus reducing the number of customers.

Finally, under the new system, the administration says drivers now will take their unused parking time with them. As a result, no one will be able to park for free.

Old meters just paid for

The new meters are arriving just a few years after WorldWide Parking Inc., the Maryland-based company that formerly held the city parking meter contract, finished installing the current generation of meters. In fact, the Nagin administration made the final $400,000 payment on WorldWide's equipment just a few months ago.

WorldWide bid on the new contract, but the Nagin administration selected the local partnership in March, citing technological factors and the 50 percent minority participation.

WorldWide, which had no local partner, went to court to block the award of the contract, arguing that as the lowest responsible bidder, it should have been selected. The Nagin administration countered that the lowest-bid criterion was inapplicable because the contract is for a professional service.

The lawsuit was dismissed by a federal judge.

At the time of the contract award, Marc Meisel, president of WorldWide, questioned the administration's projections that the new meters would increase revenue. Furthermore, he said the meters now on the street likely would last another 25 years.

The new meters are solar-powered, but also have a battery back-up. The system is linked to a computer network that will allow company and city officials to monitor each meter and determine in real time whether it's working, how much revenue it has taken in and even whether it is low on paper for receipts.

Under its contract with the city, Parking Solutions must keep 98 percent of the meters in service at all times or face cash fines. Company officials said the computer monitoring system will allow them to fulfill that requirement easily.

Cell phone innovation

The ability to activate the meters by cell phone is their most radical innovation and a first of its kind in the United States, according to Boucree.

The system, invented by Mint Inc., a company based in Toronto, Canada, allows customers to purchase parking time without leaving their vehicles.

Motorists interested in using the service will first have to phone a number listed on the meter to set up an account that Boucree calls an "electronic wallet." Once a motorist has registered a name and license plate number with Mint Inc., the company will send the customer a windshield sticker that city parking control officers -- using hand-held computers -- can scan to determine whether the parking fee has been paid.

The company also will automatically phone customers a half-hour before their time at the meter expires. If they desire, customers also can call again to obtain more parking time -- up to a legal maximum of two hours.

Boucree said plans call for this payment system to be operating by May.

Chief Administrative Officer Charles Rice said the Nagin administration is looking into a change in the law that would permit a motorist -- for a nominal extra fee -- to park in a metered space for longer than two hours.

Plans call for the "smart" cards to be on sale by the summer.

Parking Solutions officials say they have started preliminary discussions with the Regional Transit Authority to develop a single debit card that could be used on parking meters, buses and streetcars.

Parking Solutions is owned by three local African-American businessmen. In recent months, Nagin has touted the 50-50 partnership as a prime example of his administration's commitment to steer government work to black-owned companies.

Two of the local firm's principals, Keith Pittman and Tyrone Rodgers, have ties to the administration.

Pittman and Rodgers are former business partners of developer Sean Cummings, a Nagin appointee who heads the New Orleans Building Corp., which is responsible for selling or developing certain city-owned properties.

Rodgers is the stepson of public-relations executive Bill Rouselle, who has advised Nagin and who has close ties to the BOLD political organization. Pittman worked as an aide to City Councilman Oliver Thomas, a leader of BOLD.

Boucree recently resigned his management position with Standard Parking, where he oversaw 40 facilities for the company.

This is the second contract the Nagin administration has awarded to Standard Parking and Parking Solutions. In May, the partnership was hired to operate three parking lots for French Market Corp.

Mayor's top aide quitting to join law firm -- Times Picayune June 28, 2005

June 28, 2005 Tuesday


LENGTH: 634 words

HEADLINE: Mayor's top aide quitting to join law firm;
Rice cites pressures of politics on family

BYLINE: By Martha Carr and Gordon Russell, Staff writers


Confirming a rumored shakeup in the top tier of Mayor Ray Nagin's administration, an emotional Chief Administrative Officer Charles Rice said Monday that he is resigning his post to take a job at a law firm.

Rice, who joined the administration in June 2002 as city attorney, said the pressures of political life had taken a toll on his family, particularly his two sons, ages 8 and 10.

"Probably the most telling point was about six months ago, when my 10-year-old wrote me a letter," Rice said, fighting back tears. "He basically said, 'I want you at home more.' And for me, that was it."

Rice, 41, will remain in his post until the end of July. Nagin said he hopes to name a permanent successor by then. Without mentioning any candidates for the job, he said he plans to look internally first, a remark that fueled rumors he is eyeing Economic Development Director Don Hutchinson for the post.

Hutchinson did not return a request for comment.

Rice will join the law firm of Barrasso, Usdin, Kupperman, Freeman & Sarver LLC, a group that broke off from the Stone Pigman firm two years ago and does mostly commercial litigation. Rice, a former litigator for Entergy, said he has received multiple job offers but that this was the best fit.

"People need to realize when you are so-called 'marketable,' people come to you with opportunities," Rice said. "For me, this was the right time, and I think I'll be wildly successful in whatever I choose to do. Hopefully I'll be able to capitalize on some of the relationships that I've developed here."

Both Rice and Nagin, through his spokeswoman, denied Friday that any such move was in the works. However, Nagin said Monday that he has been aware for six months that Rice was looking for a new job and was just waiting for Rice's final notice.

Nagin said Rice's most impressive contribution was his effort to award a larger share of city contracts to African-American-owned businesses.

"He pushed very hard for minority business to participate at unprecedented levels," Nagin said.

Nagin also commended Rice for helping pass the city's largest bond issue, overseeing 260,000 pothole repairs, revamping the sanitation department, helping balance the city budget and awarding a new parking meter contract: the latter a controversial move that drew plenty of fire.

"I predict that as time goes on, people will say that that was one of the best moves the city of New Orleans has made in recent history," Nagin said.

But the parking meter contract and at least two others awarded on Rice's watch weren't universally viewed as good business.

The joint venture that won the meter contract got the job despite the fact that its price was 62 percent higher than the lowest bid the city received.

Rice defended the deal, saying the "pay and display" meters were technologically superior to the cheaper ones, and that the joint venture's bid was more attractive in part because a black-owned company was an equal partner in the venture.

In another contract flap, without seeking bids, Rice bought 600 trash cans with advertising panels from a company that had a business relationship with his brother, Terrence Rice, even though other firms routinely offer such receptacles for free. The contract also gave the city less of the advertising revenue than is standard in such arrangements.

Rice deflected questions about his brother's involvement with the firm. He said the cans were a better deal than the ones the city had previously used, and said their claim of being "bombproof" made for added safety. More recently, Rice said the contract to sell advertising on the cans would be rebid on terms more favorable to the city.

Wednesday, April 4, 2007

Chutzpah on wheels -- Times Picayune Editorial, Nov. 13, 2002

November 13, 2002 Wednesday

LENGTH: 521 words

HEADLINE: Chutzpah on wheels

Glenn Haydel wants his patronage back.

Early in Marc Morial's mayoral administration, Mr. Haydel, who is Mr. Morial's uncle, and two partners bought control of Metro New Orleans Transit Inc. -- and a lucrative management contract with the Regional Transit Authority -- from allies of former mayor Sidney Barthelemy. Subsequently, the management contract ballooned to $746,000 a year, and the firm and its subcontractors took in nearly $7 million from the RTA.

After buying out his partners earlier this year, Mr. Haydel sold a majority interest in Metro New Orleans Transit to Mayor Nagin's brother-in-law, Cedric Smith, after the new administration took office. But Mayor Nagin was outraged when he learned of the deal and said that the contract would be "history."

Now Mr. Haydel is accusing Mr. Smith of gaining control of the transit management company through "fraud, misrepresentations and duress" and is suing to dissolve the sale.

In truth, Mr. Haydel has no good reason to complain, and going to court to keep control of a fat patronage contract takes a lot of gall.

The suit alleges that Mr. Smith repeatedly said the RTA management contract would be in danger from the incoming Nagin administration unless Mr. Smith became majority owner of the company. Mr. Haydel presumably was in no position to complain about the incursion of politics into public contracting, since his company has benefited handsomely from such patronage over the years.

What Mr. Haydel didn't know at the time, the suit suggests, was that Mr. Smith didn't have the influence he was peddling or that the new mayor hadn't blessed the Metro deal. Mr. Haydel apparently had no idea that Nagin administration staffers sometimes refer to Mr. Smith as "our own Billy Carter."

It is impossible to feel bad for Mr. Haydel. For one thing, he admits to selling 70 percent of a lucrative business for a mere $700. If this is Mr. Haydel's notion of sound financial judgment, and his company has a contract to help manage the RTA, it's no wonder the authority has been in such parlous condition for so long.

More fundamentally, Mr. Haydel was trying to take advantage of the system. If his own allegations are true, Mr. Haydel was trying to hang on to a piece of a bloated contract by giving a sweet deal to someone whom he took for a political insider.

Still, it's surprising that Mr. Haydel filed suit. People who try to profit from unethical activities rarely call in the authorities when they think they've been fleeced. Maybe Mr. Haydel got the idea from state legislator Kyle Green, who unsuccessfully sued Gov. Foster for double-crossing him on a backroom deal.

In truth, it doesn't matter who controls Metro. There is little or no need for a management contract at the RTA, which has its own managers. Mr. Smith has zero experience managing a public transit system, yet Mr. Haydel still promised him a $300,000-a-year salary plus 70 percent of the company's profits. If Mr. Haydel could still make money while giving Mr. Smith such generous terms, it clearly isn't providing many worthwhile services to the RTA.

Thursday, March 29, 2007

Mayor treading water on board seat -- Times Picayune Feb. 28, 2004

February 28, 2004 Saturday


LENGTH: 914 words

HEADLINE: Mayor treading water on board seat;
Nice trip for a couple of city workers; The naked truth about Mardi Gras; Nagin borrows an idea for his costume

BYLINE: By Martha Carr and Gordon Russell; Staff writers

Benjamin Edwards' term on the New Orleans Sewerage & Water Board expired three months ago. But Mayor Ray Nagin seems to be in no hurry to replace him.

The mayor said recently he is searching for the "right person" to take Edwards' spot on the 13-member board. There's a chance that the right person could turn out to be Edwards himself, but it sounds pretty remote.

"He's got people lobbying me for him to stay on the board, and I just haven't made a decision," Nagin said. "If I do do something, I would probably find another minister or preacher in the community that is interested in serving."

Meanwhile, Edwards, executive director of the 9th Ward's Third Shiloh Missionary Baptist Church, is staying on with the understanding he could be removed at any time, Nagin said. That should keep the sometimes controversial member, who has a reputation for meddling in the board's day-to-day operations, in line with the administration for now.

"It's harder for him to join a coalition that may not be in on our agenda," Nagin said.

Edwards was appointed to the board in 1989 by Mayor Sidney Barthelemy to fill the unexpired term of businessman Arnold Broussard. In 2000, Mayor Marc Morial reappointed him to a full nine-year term, retroactive to 1994. His term expired Nov. 14.

For months it has been widely assumed that the mayor would replace Edwards, who voted with the 6-5 majority in October 2002 to kill a Nagin-backed move to privatize some board operations. Nagin said he has yet to make a decision, partly because it has been difficult to find a suitable person willing to serve nine years.

Since he was elected, Nagin has appointed two board members: Gary Solomon, who succeeded Stafford Tureaud Sr. for a term expiring in 2009, and Tommie Vassel, who took the place of Ronald Guidry Sr. for a term expiring in 2011. Tureaud and Guidry both voted against privatization.

. . . . . . .

NICE WORK? You know what they say: It's Nice work if you can get it -- especially if it's in Nice, France.

New Orleans Chief Administrative Officer Charles Rice and Director of Music Business Development Scott Aiges, along with members of the Mahogany Brass Band, will return this weekend from a weeklong Carnival trip to the Riviera hub that Nagin's press office swears was to promote business opportunities.

This much, at least, is true: The area's storied topless beaches have yet to crank up for the season, the weather in the south of France being a tad chilly still.

Administration officials said the trip was a follow-up to a "cultural partnership" agreement signed by Nagin and the mayor of Nice last year that calls for the "exchange of resources, expertise, and creative talent."

The agreement "builds upon our cities' natural similarities, particularly when it comes to music and Carnival," Nagin said in a statement.

Those similarities include rich jazz and Carnival traditions. For instance, Nice's king of Carnival is apparently escorted by faux executioners down the city's streets and symbolically burned in a bonfire. Perhaps, as part of the cultural exchange, New Orleans could import the tradition of the symbolic execution.

Next year, Nice will host a Carnival celebration that will highlight traditions throughout the world, and New Orleans officials hope to be in that number.

"They're inviting everyone to take part in this sort of uber-Mardi Gras, so we think there's some opportunity for New Orleans float builders," Nagin spokesman Chris Bonura said.

The city's tab for the trip was about $4,000, Bonura said, in part because the city of Nice offered free accommodations and other perks.

"It was a real bare-bones investment," he said.

. . . . . . .

SPEAKING OF BARE: Nagin's press office sent out a news release on Ash Wednesday with an unintentionally hilarious typo.

Trumpeting the success of Mardi Gras 2004, the release said: "Early economic indicators reveal that this year's Carnival celebration was slightly better than average when it comes to the number of revealers and the economic impact."

And here we thought the city was trying to discourage that sort of behavior.

Bonura took responsibility for the gaffe like a true government soldier. He sent out a corrected news release with the preface: "It has been REVEALED to me that some of you are REVELING in a Freudian slip I made in a press release. I'm working to reverse the REVELATION that I mistook REVELERS for REVEALERS. I would venture to say that New Orleans did have quite a few REVEALERS yesterday. Perhaps my slip-up is a REVELATION of my own Mardi Gras REVELRY and the price I'm paying for it today."

. . . . . . .

AND SPEAKING OF REVELERS: On Mardi Gras, Nagin sported a rather clever costume inspired by a recent column by Times-Picayune columnist Stephanie Grace. The column tagged the mayor as an "idea man" who presents bold plans but thus far has failed to carry out many of them.

Nagin's outfit included a light bulb perched on a top hat and yellow cards featuring Grace's mugshot and outlining some of his more controversial notions: selling the airport, combining the civil and criminal sheriffs' offices, and so on.

While Grace's column apparently irked some Nagin staffers, Nagin's Mardi Gras getup suggested that the mayor hasn't lost his sense of humor.

Grand jury seeks S&WB records -- Times Picayune June 29, 2006

working link
June 29, 2006 Thursday


LENGTH: 1587 words

HEADLINE: Grand jury seeks S&WB records;
Subpoenas involve board member, firms

BYLINE: By Gordon Russell, Staff writer


Federal investigators are examining the connections between longtime New Orleans Sewerage & Water Board member the Rev. Benjamin Edwards Sr. and six companies that may have received S&WB contracts, according to two grand jury subpoenas sent to the agency.

The subpoenas seek records of any contracts, payments and correspondence involving Edwards or the companies. But the most detailed requests in the orders revolve around Edwards, a 9th Ward pastor whose 16-year tenure on the board has been marked by repeated controversies over his involvement in the agency's contracting practices.

The first subpoena, dated March 20, seeks Edwards' personnel file and confirmation questionnaire as well as memos he has written or that mention him. The government is also seeking "payments to" Edwards, and records of any work the water board has done on behalf of his church, Third Shiloh Missionary Baptist Church, and a nonprofit he runs, Third Shiloh Housing, according to the documents.

Edwards said he had not been subpoenaed and denied any wrongdoing. He said that, as one of 14 water board members, he has no power to grant contracts and he scrupulously avoids having any business relationships with companies that do business with the board.

"I don't know why someone would think I have the power to award a contract," he said. "That's not how it works. They give me a lot of credit, but I ain't that powerful."

Both subpoenas also requested information from the board about Management Construction Consultant Inspection Inc., or MCCI, a company that, according to state records, was not formed until three months after it began doing work for the water board last year. One of the company's principals, Bishop O.C. Coleman of Greater Light Ministries, is a minister who is friendly with Edwards. Coleman is named in the second subpoena, as is his church.

Coleman, who has previously said he did nothing wrong, refused to answer questions on the subpoenas.

The second subpoena, dated May 19, was issued by the federal grand jury days after The Times-Picayune reported on two contracts worth a total $2.5 million that MCCI received in the weeks after Katrina. The company was hired by S&WB's prime contractor Montgomery Watson Harza to help it inspect damage to the city's sewer and water systems after the storm, according to S&WB records.

The second subpoena traces the links mentioned in the newspaper story. But the first subpoena makes clear that investigators had opened a probe into Edwards and his links to various contracts, including one involving MCCI, well before the article was published.

Officials from Montgomery Watson, a national engineering firm, would not respond directly when asked whether the company had received a subpoena. Rather, the firm issued a statement saying it was "proud of the hard work and dedication our team demonstrated" in the wake of the storm.

Coinciding donations

Both Coleman and Edwards donated generously to the same candidates in the recent city elections -- often on the same day and in the same amount.

In one case, both listed the same address: 4948 Chef Menteur Highway, an abandoned bank building near Louisa Street that MCCI named as its headquarters when the company incorporated.

While Coleman and Edwards gave to many politicians, Mayor Ray Nagin was by far the biggest beneficiary. MCCI gave the Nagin campaign $10,000, while Edwards kicked in another $5,000.

On his own, Edwards also spent what he estimated to be more than $200,000 trying to get the mayor re-elected. Most of that money, an "independent expenditure" that as such was not subject to state limits on political contributions, went to pay for billboards with Nagin's likeness and campaign slogan in various evacuee hubs, including Atlanta and Houston, according to Edwards. He said he also paid for radio ads in out-of-state markets supporting Nagin.

Nagin has said he was not involved in MCCI getting the sewerage and drainage contracts, and that he was not even aware the company had gotten the jobs until a reporter asked about it in May.

Questions about MCCI

After Katrina, MCCI received emergency subcontracts from city agencies, one dealing with the water system, one with sewerage and one with drainage, according to S&WB and city records.

In each case, Montgomery Watson served as the prime contractor.

Details on MCCI's part in the drainage contract are sketchy. The main contract was worth about $24 million, but city officials have not provided details about subcontracts, saying they deal only with prime contractors.

To supply workers to help analyze the state of the sewer and water systems, MCCI billed $2.5 million. Records show the company charged taxpayers $90 to $106 per hour per worker, mostly to take off manhole covers to visually assess damage. The firm billed somewhat less for its work on the water contract, which also involved taking account of damage.

Many of the company's invoices were signed by a "B. Edwards," the documents show. Benjamin Edwards has said it is not his signature and that he did not work for MCCI. Two MCCI employees said they were paid about $20 an hour.

One worker, Darold Hughes, said he was not familiar with Benjamin Edwards, but that he had been hired at the firm by a Bruce Edwards.

The other worker, who spoke on the condition of anonymity, said that "B. Edwards" was Bruce Edwards, Benjamin Edwards' brother. His account was confirmed by a source close to the investigation.

Benjamin Edwards said he has a brother named Bruce Edwards but he is not involved in MCCI. A phone number and address for Bruce Edwards were not available, and Benjamin Edwards declined to provide a way to contact his brother.

Coleman said he does not know the identity of the "B. Edwards" who signed his company's invoices.

How MCCI came to be hired -- given that it didn't exist on paper at the time it got the contract -- remains unclear. The firm has no office or telephone number listed in local directories.

Hughes said he signed up to work for the company by visiting the S&WB's offices near Carrollton and South Claiborne avenues, where willing workers could fill out job applications.

Other links to firms

While the grand jury's second subpoena appears aimed at ferreting out links among Edwards, Coleman and MCCI's work, there is also a reference to JLJ Construction, a company that does not appear on any of the S&WB contracting documents reviewed by The Times-Picayune.

It's not clear what role prosecutors think the company might have played, if any, in the MCCI work. But the firm and its owners, James L. and Daisey Mae Jones, are listed in the first subpoena, issued in March. That subpoena also mentions Edwards and MCCI.

The March subpoena contains notable echoes of a story published in Gambit Weekly in 2001, which detailed several instances in which Benjamin Edwards intervened in contracting matters on behalf of certain firms. One of the companies for which Edwards lobbied on multiple occasions, according to Gambit, was Exceptional Temporaries, which provided workers and tools to the board for specific jobs and is listed in the subpoena. Edwards did not comment for the Gambit story but has in the past denied doing anything inappropriate.

Edwards also stuck his neck out for JLJ Construction, which received more than a dozen water board subcontracts, Gambit reported -- including one to clean up lots owned by Edwards' nonprofit.

The Joneses could not be reached for comment.

The March subpoena also requests documents from three other firms: Fleming Construction, Prosperity Consultants Management and Prosperity Management Co., none of which were cited in the Gambit piece.

Jack Fleming, vice president of Fleming Construction, said his firm had not received any subpoena and he has "no clue" what prosecutors might be investigating. He said his company had done work in the past for the S&WB, but not since Katrina.

Randall Moore of Exceptional Temporaries said his firm had not received a subpoena. He said the firm had worked as a subcontractor for Fleming Construction several years ago.

Efforts to reach the director of Prosperity Consultants Management, based in Monroe and organized in January, were unsuccessful.

It's not the first time investigators have examined Moore. He pleaded guilty to a single federal felony charge last year for his role in a kickback scheme involving a massive energy contract at City Hall. He agreed to cooperate with prosecutors in that case, in which several defendants are set to go to trial in September.

Benjamin Edwards was originally appointed to the S&WB by former Mayor Sidney Barthelemy and was retained by former Mayor Marc Morial. Nagin has not reappointed Edwards, but has allowed him to continue serving although his term expired in late 2003.

Edwards has long been a staunch advocate for minority-owned businesses getting a fair slice of the S&WB's work. He said he suspects his outspokenness is what sparked the current federal probe.

"Every mayoral administration, someone decides to do an investigation of Ben Edwards, whether it's Gambit, The Times-Picayune or the U.S. attorney," he said. "I'm a person that stands on morals. I believe it's incumbent to do business with disadvantaged companies that are local and pay local taxes, that's what it is.

"I'm not going to change from my position. And it's clear that's what it's about. It's pure politics."

. . . . . . .

Tuesday, March 27, 2007

Storm work deals go to inside players -- Time Picayune, Nov. 26, 2005


LENGTH: 2747 words

HEADLINE: Storm work deals go to inside players;
Contracts could hurt state's image

BYLINE: By Gordon Russell, Staff writer


Weeks after Charles Rice left his post as chief administrative officer of the city of New Orleans in June, the city sanitation department sought to hire a contractor for storm debris removal.

The day before Hurricane Katrina made landfall, Mayor Ray Nagin signed a contract potentially worth tens of millions of dollars with Omni Pinnacle of Slidell.

Omni's offer wasn't the cheapest of the six offers the city received. But the city didn't have to pick the low bidder, an experienced firm, because the job was considered a professional service rather than a finite task.

City sanitation director Veronica White, who oversaw the selection process, was hired into her city post by Rice. Rice, meanwhile, has turned up on Omni's payroll in his new position as a lawyer. Omni has also been represented in contract talks with the city and the Army Corps of Engineers by Rice's brother, Terrence Rice, according to a corps official.

The Rices' work for Omni is just one of many instances in which the politically connected have landed work as subcontractors in the few hot economic markets of post-Katrina New Orleans. Whether the job involves debris removal and staging, roof tarping, trailer sales or building inspection and cleanup, people with familiar names and faces are making money -- often in areas where they seemed to have no particular expertise before the storm. It's a sign, observers say, that perhaps the Louisiana way wasn't washed away with the storm's floodwaters.

Apart from the Rices, those who have found work related to Katrina's aftermath include a powerful lobbyist, a couple of state representatives, and, for a time, a St. Tammany Parish Council member. With the exception of the St. Tammany contract, which also involves Omni Pinnacle and which resulted in the filing last week of federal extortion charges against Councilman Joe Impastato, none of the contracts appears to involve anything illegal.

The impression that the Louisiana political and business worlds are inextricably entwined could hurt the state's chances of getting the federal help it needs, said Rafael Goyeneche, president of the Metropolitan Crime Commission.

"Our recovery depends on every dollar coming into this area to be used effectively and efficiently to rebuild our state and city," said Goyeneche. "I can't emphasize enough how precarious our position is."

Shaw Group Inc.

In spite of its ties to the Rices, Omni is far from being at the top of the politically connected contracting food chain.

That distinction arguably belongs to the Baton Rouge-based Shaw Group Inc., which has landed deals worth at least $300 million in areas as diverse as dewatering, tarping and building inspection. While the company's bona fides have not been publicly challenged -- it is one of the state's few Fortune 500 companies and has expertise in infrastructure repair -- competitors have attacked the size and value of some of the contracts Shaw has landed.

Shaw's political connections are well-known. Until just weeks ago, its chief executive officer, Jim Bernhard, was chairman of the state Democratic Party. Bernhard also was a strong supporter of Gov. Kathleen Blanco in the 2003 gubernatorial runoff, and he was chairman of Blanco's transition team.

For good measure, one of the firm's lobbyists is Joe Allbaugh, who was George W. Bush's chief of staff when Bush was governor of Texas, and ran Bush's successful 2000 presidential campaign. Allbaugh then served as director of the Federal Emergency Management Agency under Bush until 2003.

The company has said it has received the work because of its experience in post-disaster services. But responding to criticism about the contracts, the Federal Emergency Management Agency last month pledged to rebid a $100 million contract with Shaw covering a variety of services that the agency awarded with little or no competition.

Feeling the sting, perhaps, Shaw has recently launched a public-relations campaign including television ads in which Bernhard, using a highlighter pen to scrawl across the screen, touts the firm and its contributions to the state's economy.

Capitol clout

Compared with the Shaw Group, many of the other politically connected companies and individuals who have landed storm-related work rank as small fry. But that doesn't mean they're scrounging for scraps.

Randy Haynie, who is often described as the state's most influential lobbyist and who also has enviable access to the Blanco administration, landed a subcontract with ECC Operating Services, one of four companies that each received debris-removal contracts worth up to $500 million apiece with the Army Corps of Engineers.

Corps documents indicate that Haynie was hired for public relations, but the corps has refused to release specific figures on what any subcontractors, including Haynie, have been paid. Haynie did not return phone calls seeking comment.

Haynie's work is no doubt far less lucrative than three deals worth $108 million landed recently by a motorcycle shop owned by the father and uncle of state Rep. Gary Smith, D-Norco. Under the contracts, Bourget's of the South, which until recently lacked the state license needed to sell new trailers, is to supply FEMA with 6,416 travel trailers, according to FEMA.

Rep. Smith is the registered agent for the company, according to state records. But his father and uncle have said that their success in winning contracts has nothing to do with the political clout of Rep. Smith, who sits on the House Special Committee on Disaster Planning, Crisis Management, Recovery and Long-Term Revitalization.

State records show that Rep. Smith also serves as the agent for a firm called Alliance Construction, which incorporated weeks after the storm and soon landed a subcontract for debris hauling with Ceres Environmental Services Inc., one of the region's four main haulers. Federal officials have so far been unwilling to divulge the amount of such subcontracts.

Rep. Smith did not return calls about that contract.

One other state legislator, state Rep. Troy Hebert, D-New Iberia, also has his hand in the world of debris removal. Hebert has said he has worked as the subcontractor of a subcontractor of a subcontractor in hurricane debris removal. But he scoffed at the notion that political influence had anything to do with his landing work.

"I've been having a tractor since I was 14," he said. "I worked cleaning up Hurricane Andrew. If I was on the level of (a first-tier sub), then you could accuse me of that."

Local players

Debris pick-up is also the job for which the city of New Orleans hired Omni Pinnacle, the firm Charles Rice represents.

City officials denied that Rice played any role in Omni getting the contract in August. Rice said he has never negotiated with the city on Omni's behalf. And Terrence Rice said he has only attended meetings on behalf of his own firm, T. Rice and Associates.

In selecting Omni, the city bypassed DRC Emergency Services of Mobile, Ala., a company with debris removal contracts in many parts of the country that submitted the lowest price.

City sanitation director Veronica White said price was "one of several evaluation criteria on the proposal," and that Omni "ranked the highest when all criteria were evaluated." She did not say which factors put Omni over the top.

But DRC's officials are raising questions about Omni's selection.

"I'm shocked to learn that we were the low bidder and were not awarded this contract," Bob Isakson, head of DRC, said recently when told about the city's choice. "I'm certain our qualifications were more than sufficient."

It's unclear when Charles Rice began working for Omni. He and Omni's owner, Ronald Reine, both said their relationship sprang up after the firm received a city contract as Katrina approached New Orleans. When asked for a copy of Charles Rice's contract, however, Reine said through a spokeswoman that he could not locate it. Charles Rice and Reine also said Rice never contacted city officials while representing Omni.

Omni's position as the city's main debris collector lasted until Sept. 23, when the parties agreed to suspend the deal because the Corps of Engineers' policy is to pay only 90 percent of the cost as long as the city continued to supervise debris removal. To have the corps pick up the full cost, it would have to oversee the contract.

The corps' top contractors for that work in New Orleans were ECC and Phillips & Jordan Inc., two national disaster-management firms. But that did not mean Omni was out.

On Sept. 17, an agreement was struck under which Omni would become a "first-tier" subcontractor under both ECC and Phillips & Jordan, said Allen Morse, a debris expert for the corps. He said Omni was represented at the meeting by Reine and Terrence Rice. The city was represented at the meeting by White of the sanitation department, Morse said.

"They were trying to see if Omni could be absorbed by the prime contractors," Morse said.

Through spokeswoman Betsie Gambel, Reine said Terrence Rice had never represented him at anything except perhaps a job fair. Told that a corps official had said otherwise, Reine -- whose company walked off the job Friday citing unpaid invoices -- retorted: "Is this the same corps that owes me $20 million?"

Terrence Rice, through e-mail, said that the only meetings he attended "were on behalf of T. Rice and Associates and only T. Rice and Associates."

The Rices' work for Omni when the firm had a direct contract with the city did not necessarily violate any ethics rules, which say high-ranking public officials cannot do business with an agency they served until two years after the date they left the agency.

Charles Rice said he was well aware of such laws. He said he even sought recently an advisory opinion from the ethics board as to whether he could represent clients with business before the City Council or other city agencies.

The board said unequivocally that he could not do business with the city administration and initially forbade him from working with the council and other agencies. Rice said the board intends to revise the latter part of that opinion.

But in any case, Rice said, his only meetings on behalf of Omni had been with corps officials.

"The facts are, I appeared at a meeting with the Corps of Engineers and Omni Pinnacle, and I attended a meeting between Omni Pinnacle and Phillips & Jordan," Rice said. "I have never, and I repeat never, appeared at any meeting between Omni Pinnacle and any city officials."

Reine likewise said there was no connection between his hiring of Charles Rice and his success at City Hall.

"I did not know either Terrence or Charles until way after the city contracts were signed," Reine said through Gambel. "Since I met them, I have had minimal contact with them. Terrence represented me in a job fair. Charles has reviewed some contracts.

"No one ever spoke with the city on my behalf. I've never had any firm lobbying on his behalf for this or any city contract."

Federal charge

The contract Omni had with New Orleans is not the only controversial deal involving the firm and a political figure. Another contract in a different parish, has sparked the first post-Katrina public corruption indictment in south Louisiana.

Federal prosecutors last week charged St. Tammany Councilman Joe Impastato with extortion after he allegedly told a St. Tammany Parish landowner that he could set him up with a subcontract through Omni for a price. Impastato has denied that he's done anything illegal.

According to the federal complaint, Impastato demanded half the subcontract's $200,000 value. While Omni has not been charged with any wrongdoing, the complaint suggests that Impastato was able to deliver favors and retribution through Omni.

The contract that Impastato allegedly promised the landowner indeed materialized, the federal document said. But after the landowner refused to pay the graft, Omni stopped using the landowner's property, the complaint said. Prosecutors declined to directly answer questions about whether they believed Omni was complicit in the alleged scheme.

Reine declined to comment on the matter, citing the ongoing investigation. He said his company is not under scrutiny.

Subcontract awarded

Terrence Rice wound up with a subcontract from ECC when that firm took over New Orleans' prime debris-collection contract from Omni.

Allan Katz, a spokesman for ECC, said that Terrence Rice's company, T. Rice & Associates, had "performed several services for ECC and performed them well."

He did not say what the services were. Terrence Rice declined to answer questions about his work.

Another business owner who has also wound up with a lucrative subcontract from ECC, according to the firm, is Michael Sullivan, owner of TSG Solutions. Charles Rice has described Sullivan as a friend and occasional dinner companion. Sullivan won two subcontracts from city agencies during Rice's tenure as chief administrative officer, with deals netting TSG at least $1.3 million, according to city records. But Charles Rice said his friendship with Sullivan blossomed only after TSG firm received its city contracts.

Sullivan's resume says his firm's focus is "strategic planning, economic development and business development." Gambel, who is representing TSG as well as Omni, said TSG is mainly "doing debris hauling and solid-waste work." She added: "They've invested in a number of pieces of equipment to get the job done."

The company's work force now numbers about 40, Gambel said. She said that the work hews closely to TSG's mission of working in "construction-related fields."

Another well-known actor in political circles who has been retained by ECC is Bernard "Bunny" Charbonnet, a New Orleans Dock Board member and a leader of the political organization COUP.

Charbonnet, whose planning firm has offices in three states, said he initially received a contract worth up to about $500,000 to provide a project manager and about 10 other employees to oversee debris removal. He said he left the job after taking in about $100,000 because "it wasn't a good fit."

"It's nothing against ECC," Charbonnet said. "It just wasn't good for my company."

Subs tied to city

Some of the politically connected companies involved in the post-Katrina work have gotten work through The Shaw Group, which is the prime contractor for building inspections in New Orleans.

Shaw's major subcontractors include some companies well-known around City Hall. Among them: the engineering firms Three Fold Consultants, N-Y Associates and Citywide Testing and Inspection, the last one owned by Roy Glapion Jr., son of a late city councilman. All three firms have been active players in local politics, and Citywide and N-Y in particular have often been tapped for public contracts, public records show. All three companies have donated to Nagin's campaigns, with Three Fold giving a total of $6,000 and Citywide and N-Y Associates $10,000 apiece, state campaign finance records show.

Representatives of N-Y referred questions about their work to the Shaw Group. Officials from Three Fold and Citywide did not return phone calls.

The engineering firm Montgomery Watson Harza, which holds a contract for catch-basin cleaning and other debris-removal services, is also employing a familiar roster of subcontractors, including Three Fold and Citywide, and Sullivan's TSG.

It's unclear exactly how important connections to state or local politics are in the awarding of contracts or subcontracts. Officials at all levels have said that they seek the best deal they can get with a prime contractor, and then leave the hiring of subcontractors to that company.

And while elected officials have argued publicly that as much work as possible go to local firms, they say they don't lobby on behalf of particular ones.

Some degree of politics-as-usual is OK, Goyeneche said -- but there's a line that shouldn't be crossed.

"There's a tremendous push right now to see that local firms get more of this business," he said. "I'm sure they're contacting local political leaders to get those, and I'm sure they're using intermediaries to get that work.

"Should people not call on politicians and ask for favors? I don't believe that's the case. I think you can call on a friend to ask him to consider your firm, but don't go beyond that. You can't say, 'If you hire my firm, I'll do this for you.' "

. . . . . . .

Staff writers James Varney and Martha Carr contributed to this report. Gordon Russell can be reached at or (504) 826-3347.


Shaw not among Fortune 500: A story in Sunday's editions identified The Shaw Group of Baton Rouge as a Fortune 500 company. While Shaw was listed as one of the nation's 500 largest companies in 2003 and 2004, the firm did not make the list in this year's rankings. (11/24/2005)

LOAD-DATE: November 26, 2005

It's not just Louisiana

Was Rice shown the door at City Hall? Times Picayune July 2, 2004


LENGTH: 1003 words

HEADLINE: Was Rice shown the door at City Hall?;
ALSO: City Hall's revolving door; Power to the worker

BYLINE: By Gordon Russell and Frank Donze and Martha Carr, Staff writers


The unanswered question about the departure this week of Charles Rice, the second chief administrative officer to resign during Mayor Ray Nagin's three years in office: Did he jump ship, or was he pushed?

Did Rice go because he was tired of the job's demands, wanted to spend more time with his kids, and had a tempting offer with a law firm on the table? Or did Nagin want Rice out?

The party line is that Rice's departure was completely voluntary, but the truth may be in the middle.

At Monday's news conference, Nagin warmly lauded Rice, a sharp contrast with the tepid sendoff he gave his first CAO, Kimberly Williamson Butler.

The mayor commended him for everything from pothole repairs to new parking meters -- and tried to put to rest any speculation about Rice being forced out.

"This was his decision," he said. "If he wanted, he could come back as CAO tomorrow."

Rice was similarly effusive. In a teary speech, he said he thinks of Nagin "as a brother."

But some people close to Nagin have suggested otherwise. They suggested a story like more like this: Nagin's most important political asset is integrity. Rice, while never accused of any malfeasance, was front and center on a few deals that emitted an odor of patronage -- among them the no-bid deal for trash cans that went to a company with ties to his brother -- leading to grumbling among certain aides and head-shaking from Nagin supporters.

Others say that Nagin didn't push Rice, but that his stock with the mayor had fallen -- and his influence with it. They say the power of an once-omnipotent office, , partially neutered in the Butler days, was further diminished by Nagin's recent tweaks to City Hall's contract-selection process, which shifted more power to the city attorney's office. Seeing the writing on the wall, Rice may have pursued an exit strategy.

But some Rice fans believe he had grown tired of taking the hits for the administration's decisions.

Another slice of the New Orleans political world -- not all of it Nagin-friendly -- saw Rice as a man who could be reasoned with, a breath of fresh air in an administration not always known for diplomacy.

"This is going to be the biggest void," Councilman Oliver Thomas said. "He was the go-to guy for the mayor."

. . . . . . .

SHRINKING CIRCLE: For several months, there has been talk that Nagin didn't want to see any more top aides leave before the February election.

But now Rice has left, adding to the long list of high-ranking advisers who have begged off before the close of the first term -- a number that dwarfs that of previous administrations.

Since Nagin took office, the departed include Butler, Economic Development Director Beth James, top political adviser Garey Forster and Communications Director Patrick Evans.

Of the original "inner circle," the only one left standing is Greg Meffert, chief technology officer -- a post that didn't exist when Nagin took office. Other high-ranking appointees still in the fold include top housing aide Alberta Pate, Executive Counsel Kenya Smith, Finance Director Reggie Zeno and City Attorney Sherry Landry, who took over that position for Rice when he became CAO.

By comparison, the top tier of former Mayor Marc Morial's administration remained nearly intact into his second term. And those who left did so because they had gotten an obvious promotion; political aide Paul Sens, for instance, left to run for the Municipal Court bench.

To some observers, the turnover suggests Nagin didn't do the greatest job of hiring top executives. But Nagin addressed those critics this week, saying that in the corporate world he came from, longevity is rare.

The mayor, who led Cox Communications of Louisiana before becoming mayor, said that he generally expected his top brass at Cox to move on to bigger and better things every couple of years. In staying three years, Rice exceeded his expectations, Nagin said.

. . . . . . .

END GAME: The unusual three-step process used to seat a city employee on the New Orleans Civil Service Commission has reached its final stage, and the decision is now in the hands of the City Council.

Council members have three weeks to choose from among the three top finishers in a recent balloting to winnow the five-candidate field. The three top finishers, selected by city employees in a runoff election, are: Jerry Davis, longtime personnel administrator for the Civil Service Department, 436 votes; Howard Eugene Noland, a support services administrator with the Sewerage & Water Board, 435; and police officer Neville Payne Sr., 320.

Eliminated were Recreation Department analyst Marie Henley and water board engineer Barham "Bob" Moeinian, who received 297 and 286 votes, respectively. The five finalists survived a first round of balloting that featured 10 contenders.

If the council takes no action, Davis, the top finisher, will be automatically appointed to the five-member board, which handles appeals of disciplinary actions against city employees and oversees City Hall's other personnel actions, from establishing wages to testing prospective workers.

City workers got the right to place one of their own on the panel in 1993. Before then, all members were chosen by the council from lists of nominees submitted by local universities. A seat was designated for a city employee after the closing of St. Mary's Dominican College.

While the other four commissioners receive a $50-per-meeting stipend, the employee representative gets no compensation other than time off from work to attend meetings. All commission members serve six-year terms.

The representative will replace Pamela Davis, compliance manager for the city's Neighborhood 1 housing program, who finished second in the 1999 election but was later picked by the council. Davis did not seek re-election.

Nagin in-law wants out of Metro partnership -- Times Picayune March 19, 2003

March 19, 2003 Wednesday


LENGTH: 1002 words

HEADLINE: Nagin in-law wants out of Metro partnership;
Consulting firm had contract with RTA

BYLINE: By Frank Donze; Staff writer

Cedric Smith's brief association with a consulting firm that has held a lucrative Regional Transit Authority contract for the past decade has produced nothing but headaches for him.

Smith, the brother-in-law of Mayor Ray Nagin, has been depicted as a shakedown artist in a lawsuit filed by his business partner. And Nagin's staff has portrayed him as a New Orleans' version of Billy Carter -- a reference to former President Carter's brother, who tried to cash in on the presidency by cutting deals for himself.

Weary of the political intrigue, Smith now says he just wants out.

Smith recently told his lawyers to take whatever steps are necessary to divest himself of his majority ownership in Metro New Orleans Transit Inc., which he acquired in August from investment banker Glenn Haydel, former Mayor Marc Morial's uncle.

Haydel has since asked a court to void the transaction, charging that Smith engaged in fraud by portraying Nagin as a supporter of the deal.

After learning about Smith's involvement last November, Nagin told RTA Chairman Jimmy Reiss to cancel the Metro contract immediately. Reiss has done so, prompting another suit by Haydel charging the RTA with breach of contract.

Timing questioned

After his involvement came to light, Smith apologized to Nagin for what he admitted was an error in judgment. But while Smith said he had no desire to retain his Metro ownership, he said he wanted to hold onto the controlling interest until he could go to court to repair the damage to his reputation from what he called Haydel's false claims.

Smith had a change of heart, however, after Haydel amended his suit, adding allegations against Nagin, Reiss and the RTA.

"I do not want my dispute with Haydel to become a vehicle for him to attack others," Smith wrote in a March 12 letter to his lawyers David Sherman and Julian Murray. "I have therefore, decided to return the stock to Haydel unconditionally."

While he expressed surprise at the turn of events, an attorney for Haydel said his client is ready to accommodate Smith.

"Mr. Haydel is obviously glad that he's not going to have to litigate this issue," Scott Yount said.

"The only thing we question is its timing, considering we have an outstanding subpoena for documents to the mayor and the city of New Orleans seeking information relative to issues involved in the suit," Yount said.

Sherman said no one should be surprised by Smith's decision.

"From day one it's been Cedric's intent to tender the stock," Sherman said. "The reason why he's doing so now is because it's apparent Mr. Haydel is using this litigation to further his interests with the city and the RTA."

Both sides said Tuesday they hope to complete the ownership transfer by April 1.

Political infighting

The machinations behind the Metro deal are extraordinary even by New Orleans' standards of political infighting.

While Haydel has said Smith approached him about the deal, Smith says it was the other way around. In fact, Smith alleges that Haydel and other Morial allies came looking for him and methodically seduced him into signing the agreement.

Haydel counters that he is the aggrieved party, having been victimized by Smith's fraudulent claim of having Nagin's full support for the business arrangement. In his suit, Haydel charged that Smith repeatedly suggested that the RTA contract "would be in jeopardy" if Smith were not made majority owner -- allegations that Smith vehemently denies.

Smith has said that he never mentioned Nagin's name during his months-long discussions with Haydel that culminated over the summer, when Haydel sold him a 70 percent interest in Metro for $700.

The sale price appears to be way out of line considering that Metro and its subcontractors have been paid nearly $7 million by the RTA since Haydel acquired the firm shortly after Morial took office in 1994.

But Yount, Haydel's lawyer, maintains that there is a logical explanation for the $700 transaction.

"When Glenn was approached by Cedric about the purchase, he (Haydel) was looking for a partner, someone to do some work for the benefit of the company," Yount said. "He also was told by Smith that he needed him (Smith) to keep the contract. Keeping the contract was Mr. Haydel's primary concern."

$300,000 salary

Under the contract he signed with Haydel on Aug. 29, Smith, who has never worked in the transit industry, was guaranteed an annual salary of $300,000 and a year-end bonus of 70 percent of Metro's profits. The deal also called for Haydel to receive a $300,000 salary and 30 percent of the company's net revenue.

Although he said he has not received any salary from Metro, Smith said he was paid a $25,000 consulting fee by Haydel before signing the deal. Smith said the fee was for work on an administrative reorganization proposal for the transit system.

Although he was prepared to present his $700 check at the time of the signing, Smith said, Haydel told him it was not necessary. Smith said he still has not paid Haydel any money.

Haydel has said he paid considerably more than $700 when he and two associates bought Metro in 1994 from Gerald Mouton, an ally of former Mayor Sidney Barthelemy, but he has declined to elaborate on the price.

In September 2001, the RTA board controlled by Morial appointees approved a five-year, $3.7 million extension of Metro's contract. The $746,000 annual agreement, about $300,000 larger than the previous contract, was set to expire Oct. 1, 2006, nearly five months after Nagin's mayoral term ends.

Metro, the lone bidder for the job, has provided a range of services to the RTA since Haydel took it over, including union contract negotiations, legal advice and oversight of capital improvements.

Haydel has said he won't walk away from the deal until the RTA pays him $900,000 in past-due fees and penalties.

LOAD-DATE: March 19, 2003