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

Our Own Billy Carter -- Times Picayune October 11, 2002

October 11, 2002 Friday


LENGTH: 617 words

HEADLINE: Our own Billy Carter

When Ray Nagin took over as mayor, his plan wasn't merely to give a different group of political hacks a chance at the trough. He promised to clean up city government and to run it in a businesslike manner.

Now his own brother-in-law, Cedric Smith, has provided a vivid illustration of the problems that the new administration has to fix.Apparently without Mayor Nagin's knowledge, Mr. Smith bought a majority share of Metro New Orleans Transit, which holds a $746,000-a-year contract to help the Regional Transit Authority with contract negotiations, finance, legal advice and oversight of capital improvements. Never mind that Mr. Smith has no experience running a public transit system.

After learning of the deal from a Times-Picayune reporter Wednesday, Mayor Nagin was appropriately outraged. He said that the "contract, one way or another, is history."

That reaction is encouraging. But the real test of Mayor Nagin's mettle is whether he moves quickly to get New Orleans out of the Metro contract -- which was appalling long before Mr. Smith got involved.

If there were an award for sleaziest political deal in New Orleans, Metro's contract with the RTA would be a leading nominee. The services included are basic management duties that the RTA's management staff should be able to handle.

Yet the contract, which has been in place since former Mayor Sidney Barthelemy's administration, keeps getting fatter and fatter. The company's fees grew from less than $160,000 a year in 1995 to about $450,000 a year, before the RTA board renewed the contract last fall for five years at an annual price of $746,000. It can't be a coincidence that when the board, appointed by then Mayor Marc Morial, approved that contract extension, Metro was owned by Glenn Haydel -- the then-mayor's uncle -- and two partners.

What's especially obscene is that, with each change of administrations, a new politically connected buyer steps forward. Mr. Haydel and his partners bought the company from associates of Mr. Barthelemy after Mr. Morial took office. After buying out his partners this year, Mr. Haydel has now sold control to Mr. Smith. Plane tickets may not be transferable, but the right to help yourself to the RTA's money certainly is.

Mr. Smith says he wasn't required to inform the mayor that he had bought control of Metro. And while Mayor Nagin says he was shocked to learn of the deal, he and his advisers clearly worried about Mr. Smith. Before taking office, Mr. Nagin sent Mr. Smith a letter telling him not to try to make money or gain favors from his relationship with the new mayor. Nagin staffers have dubbed Mr. Smith "our own Billy Carter," after President Carter's embarrassing brother.

Mayor Nagin says his brother-in-law did raise the possibility of buying into Metro in April. He also says he told Mr. Smith that doing so would be a bad idea and that the city would likely try to get out of the deal.

Under the terms of the contract, getting rid of Metro without cause could cost the city $500,000. But it might not take much effort to identify a cause: that the contract isn't needed and that the authority isn't getting its money's worth. It's impossible to believe that a company now controlled by someone with zero experience in public transit could provide $746,000 worth of benefits to the RTA every year.

In July, Mayor Nagin authorized the arrest of his cousin in a taxi corruption sweep. He should show the same willingness to put the public interest before family concerns in the Metro case. Getting out of the contract was worth exploring before. Doing so -- at the lowest possible cost to the city -- is imperative now.

LOAD-DATE: October 11, 2002

Seems to be an editorial, but not listed as such on LexisNexis

Saturday, March 24, 2007

Parking Meters -- Times Picayune Editorial April 30, 2005

Copyright 2005 The Times-Picayune Publishing Company
Times-Picayune (New Orleans)

April 30, 2005 Saturday


LENGTH: 229 words

HEADLINE: The best thing ever


If only New Orleanians had known the import of the new parking meters sprouting up around the city, they might have demanded them sooner.

Charles Rice, Mayor Ray Nagin's chief administrative officer, put things in perspective this week.

In response to criticism from French Quarter residents about the appearance of the meters and the way parking rules are being enforced, Mr. Rice spoke in sweeping terms.

Not only are the credit card-ready meters more convenient, they will also "bring New Orleans into the 21st century," he said.

Pause for dramatic effect.

"So we can compete with the Atlantas and the Houstons."

New Orleanians surely would be happy to compete with the Atlantas and the Houstons for economic development. Those cities are among the most vibrant in the South, and the New Orleans area has lost some well-paying jobs to Houston.

But who knew that updated parking meters could help with job creation? Obviously, the company supplying the meters will benefit, and so will the people paid to hand out tickets. And maybe, instead of spending all their time looking for quarters, people will have more time for genetic engineering and aerospace research.

Or maybe Mr. Rice is trying to make the meters seem so fabulous in the hope that residents will forget that the city paid too much for them and gave the contract to a politically connected supplier.

Good luck with that.

Friday, March 23, 2007

Garbage Cans, Charles Rice -- Times Picayune Nov. 7, 2004

November 7, 2004 Sunday


LENGTH: 2064 words

HEADLINE: Trash bin contract smells, some say;
No-bid deal in N.O. raises questions

BYLINE: By Gordon Russell, Staff writer


A no-bid deal that gives a New Orleans firm the exclusive right to sell advertising on hundreds of city-owned trash cans in the Central Business District has raised eyebrows among others in the industry, who wonder why they weren't given a chance to compete for the potentially lucrative job.

Moreover, the company selling the ads and supplying the cans, Niche Marketing USA, had a business relationship with Terrence Rice, the brother of New Orleans Chief Administrative Officer Charles Rice, at the time the deal was announced, according to the company president. The company's chief executive later denied that Terrence Rice had worked with Niche.

City officials have been tight-lipped about the deal, refusing on numerous occasions during the past three months to answer basic questions about it. They say they have no paperwork on the arrangement because it is technically a subcontract between Niche Marketing and Waste Management, the city's trash collector, which buys the receptacles, known as "Jazzy Cans," from Niche at the city's direction.

The Nagin administration's reluctance to provide details on the matter has been unusual, given the aggressive stance the mayor has taken against patronage and in favor of transparency in the awarding of city contracts.

According to Charles Rice, Niche representatives had demonstrated the cans, purported to be bombproof, to him and other city officials. Along with the antiterrorism feature, the cans also contain four panels to display advertising.

City officials were impressed, Rice said, and so far have ordered Waste Management to buy 600 from Niche Marketing, using money donated by private companies to the mayor's "Imagine It Clean" campaign. The cans, which are not manufactured by Niche, cost $750 apiece, for a total of $450,000, Rice said.

Though the cans belong to the city, Rice said the city has no written agreement or contract with Niche Marketing on the company's exclusive franchise to sell advertising on them. However, he said the city does have a letter in which Niche promises to give 15 percent of its ad revenue to the city.

City officials have yet to provide the letter to The Times-Picayune, though the newspaper submitted a public-records request in August asking for all contracts and agreements between the city and the company. City officials also did not respond to a request for information about how much revenue the city has earned from the arrangement. Relatively few ads appear to have been sold so far.

Mixed messages

Charles Rice declined to directly answer questions about whether his brother had a relationship with Niche Marketing.

"That's something you would have to ask my brother about," Charles Rice said. "But I think you've spoken to Niche, and I think they've given you that answer."

Terrence Rice has not responded to numerous e-mails and phone messages.

Shortly after the cans were unveiled at a Nagin news conference in July, a receptionist at Niche Marketing answered a reporter's call asking for Terrence Rice by saying she would take a message for him.

In a later conversation, company President Stacey Mays-Douglas said Terrence Rice "no longer works here."

When asked what job Rice had performed, Mays-Douglas answered: "He was simply selling advertising. His goal was to sell ads on the Jazzy Cans."

Not long afterward, Kerry Brown, the firm's attorney, called The Times-Picayune and said Mays-Douglas "may have been mistaken." He said Terrence Rice "had been utilizing office space" leased by Niche but "has not received a penny from Niche."

He added that "there is no employer-employee relationship" between the company and Terrence Rice, and that Rice "has not received a paycheck, directly or indirectly." Brown described Rice as a "jack-of-all-trades."

Later, Niche CEO Rodney Whitney, who founded the firm, categorically and vehemently denied that Rice had any ties to the company.

"Terrence Rice has no relationship with Niche. He has never had a relationship with Niche," Whitney said.

Asked why the company's No. 2 official had said otherwise, Whitney said: "I don't know why she told you that. Evidently, you weren't talking to the right person."

'Imagine It Clean'

When asked why the city did not go through a bid process or a request for proposals to buy the new cans or to select an advertising vendor, Rice said a bid process was unnecessary and would have been unfair to Niche. He said the city's contract with Waste Management allows the city to direct the trash hauler to buy garbage cans and does not require a bid process.

The money for the cans came from the "Imagine It Clean" campaign, which Nagin's press office describes as a public-private initiative. Money for the effort had been donated by private companies, including $150,000 from Harrah's and $50,000 apiece from Waste Management and from Browning-Ferris International, another major trash hauler.

Technically, Waste Management has bought the cans at the city's direction, and then been reimbursed by the city, Rice said. A similar process was used for 508 new cans, costing $675 apiece, in the French Quarter and along St. Charles Avenue.

Waste Management bought those cans through Celtic Distributors, a company run by James "Dutchie" Connick, who is a lobbyist for Waste Management and also is the brother of Jefferson Parish District Attorney Paul Connick Jr. In that case, city officials apparently did not order Waste Management to buy cans from a specific vendor.

Rice added that when Marc Morial was mayor, the city was buying cans through Waste Management that cost $1,000 apiece, so the new cans represent a substantial savings.

Chuck Dees, area vice president for Waste Management, said his company had purchased a large number of concrete-based cans, adorned with the "Mayor's Clean Team" logo, for $490 apiece through Dutchie Connick. The company also bought a smaller number of fancier cans for the French Quarter at $840 apiece under the direction of the Morial administration, Dees said.

The Nagin administration did not respond to questions about which cans cost $1,000 apiece.

Lawsuit against Niche

When asked if a bid process might have resulted in a better price, Rice said he wanted the cans marketed by Niche, which he said embodied "patented technology" making them bombproof. Niche is the exclusive distributor of such cans in Louisiana, he said.

Rice said he took Niche officials at their word that they were the sole providers of such cans. Niche also "showed me a patent," Rice said, though the company's attorney said Niche has yet to receive a patent.

Rice said it would have been unfair to seek bids to select an advertising vendor because the idea of putting ads on trash cans was Niche's.

"Look at this realistically," Rice said. "If you brought me an idea, would it be fair for me to steal it and profit from it? This was their idea."

However, a federal lawsuit against Niche filed last month by City Media Concepts, a company based in New York City, alleges that Niche parroted the design and concept of City Media Concepts, which has placed similar cans in Times Square.

The suit claims a violation of City Media's "trade dress" and trademark. In a nutshell, that means that the company has pioneered a trash can with a certain look and features, much in the way that McDonald's restaurants have certain looks and features, said Andy Langsam, City Media's attorney.

"You and I could not open a hamburger chain and call it McDougal's," Langsam said. "Or, if we called it Sam and Andy's, but it had golden arches, they'd stop us, too."

The suit asks the court to seize all litter cans provided by Niche and to order the company to change its design.

As evidence for its claim, City Media pointed to Niche's Web site, which used language strikingly similar to that used by City Media to pitch its product.

In a letter to Niche, Langsam demanded changes to the site owing to its "blatantly copied portions of our client's copyrighted materials."

As an example, the letter noted that City Media's Web site described its cans this way: "Crafted of heavy steel and weighing over 325 pounds, the Receptasign kiosk's sleek frame houses an outsized 45-gallon container that discreetly hides greater quantities of unsightly refuse."

Niche's site until recently described its cans like this: "Crafted of heavy metal and cement weighing more than 900 pounds, 'Jazzy Cans' have a 39.9 gallon container area, and a dome top that discreetly covers large quantities of unsightly refuse."

Said Langsam: "That told us that they knew of us, they copied us, this wasn't accidental."


Niche's Web site was redesigned shortly after the company received the letter from Langsam. Kerry Brown, the firm's attorney, said he suggested the changes after receiving the letter because he always advises clients to try to work out disagreements amicably rather than get bogged down in costly litigation.

"I want to get rid of any and all possibility that we did something wrong, because we didn't," he said.

Brown said the suit is baseless and promised that it will be dismissed within a week. He said Niche's cans differ substantially from City Media's because they are bombproof rather than bomb-resistant. He said the company has applied for but not yet received a patent.

"City Media does not have a mitigating can, a can that's capable of absorbing explosions," Brown said. "That's what Niche brought to the city. And City Media didn't see that."

Brown said he and Langsam had already agreed in principle to a settlement that essentially would involve City Media dropping the case. He said he couldn't discuss the exact terms.

But Langsam gave a different version. He said Brown had called him, explained that Niche, which was sued in federal court in North Carolina earlier this year in an unrelated action, could not afford to defend another suit. Brown wanted to discuss a settlement, Langsam said.

Langsam said he agreed to drop the claim only if Niche either agrees to remove all the trash cans from New Orleans' streets within two months, or pays City Media a licensing fee for each one. He would not disclose an amount.

Brown said he disagreed with Langsam's version of events but declined to offer his own.

"He's not going to get what he's asking for," Brown said.

Other companies irked

City Media is not the only company taken aback at the appearance of Jazzy Cans on New Orleans' streets.

Representatives of several companies that produce and sell display advertising said they would have welcomed a chance to bid for the right to sell ads on the garbage cans, but there was apparently no bid process to purchase the cans or sell advertising space on them.

"We did not receive an RFP (request for proposals) or anything," said Jodi Senese, a spokeswoman for Viacom, a major player in the outdoor advertising market.

Asked whether the company would have bid given the chance, Senese said: "It's in line with our business. It is an out-of-home advertising product, and we're in the out-of-home advertising business. We would have evaluated it and made a decision based on that."

Several other companies in the outdoor advertising business said they, too, would have welcomed a chance to compete. But none wanted to speak on the record for fear of hurting their chances of getting future city business.

It's possible the city could have gotten a better deal had it sought bids for the job.

Peter Arbor, vice president of operations for City Media, characterized Niche's arrangement in New Orleans as a sweetheart deal.

City Media pays for the cans it provides in New York, Arbor said, and also continues to own and maintain them around the clock, with crews that come out hourly to wipe the cans off so the advertising remains visible. That's not cheap, he said.

City Media shares 10 percent of its ad revenue with New York City, he said.

By comparison, New Orleans must buy and maintain the cans Niche provides. And although the city gets 15 percent of the ad revenue, the extra 5 percent doesn't nearly cover the other costs, Arbor said.

"It appears on the surface that it's a very good deal for Niche," Arbor said.

But Brown said Niche's cans are of far better quality and thus far more expensive than City Media's. Also, it's unfair to compare the advertising markets in New Orleans and New York City.

"They get tons more for advertising," he said. "You're comparing Times Square to Poydras Street."

. . . . . . .

Garbage Cans, Rice -- Times Picayune Jan. 18, 2005

January 18, 2005 Tuesday
Correction Appended


LENGTH: 2204 words

HEADLINE: City's trash bin contract called wasteful;
Other firms say they can do more for less

BYLINE: By Gordon Russell, Staff writer


As part of a no-bid deal with a local advertising company that enjoys close ties to the Nagin administration, the city of New Orleans paid $450,000 for garbage cans similar to those that competing businesses routinely provide for free.

Representatives of at least three companies that sell advertising on trash cans like those now dotting the streets of New Orleans say they would have been eager to provide the cans at no cost in exchange for the right to sell the ads that go in panels on the four-sided bins. To boot, two of the three said they also would have given the city a bigger piece of the ad revenue than the 15 percent the city is getting from the company that got the deal, Niche Marketing USA.

Nagin's chief administrative officer, Charles Rice, defended the city's decision to buy the cans, saying among other things that bidding would have been unfair to Niche, which he said submitted to the city the idea of advertising on cans.

But one of the three companies that said it would have provided the cans for free, Verres Media, submitted a proposal about two years ago that mentioned its ability to provide cans with advertising. At the time, however, the city was looking for a wide-ranging branding and marketing strategy, not trash cans, and the bid was overlooked.

Had the city gone out to bid on the trash cans, Verres officials said they would have resubmitted their previous offer, which would have saved the city $450,000 up front, and likely generated more money down the road.

And had the city entertained bids other than the one from Niche Marketing, it also would have heard from Eyeball Media, based in Atlanta, according to that firm's president, Richard Mashburn, who called Niche's contract "a sweetheart deal."

Eyeball provides similar cans with advertising to the city of Atlanta as well as private businesses. The company pays for the cans, maintains them and shares anywhere from 15 percent to 25 percent of the ad revenue with the client. Typically, cities get 25 percent, Mashburn said.

Mashburn, who checked out Niche's cans on a recent trip to New Orleans, said he intends to send a letter to city officials offering to help sell ads and giving the city a 25 percent cut.

"The way I look at it, the more the merrier," Mashburn said. "We would love the opportunity to come down there and sell."

City Media Concepts, a firm based in New York City that makes advertising cans similar to those the city bought from Niche, also provides and maintains similar receptacles at no cost. The firm typically shares 10 percent of its revenue.

Better terms from other vendors isn't the only problem rivals are finding with the Niche deal. City Media filed a federal lawsuit against Niche in October alleging that Niche's cans parroted City Media's design and concept. The suit says City Media's "trade dress" and trademark have been violated -- in essence, that Niche appropriated a trash can with a certain look and features that were pioneered by City Media.

The suit asks the court to seize all litter cans provided by Niche and to order the company to change its design.

City Media officials have said they would allow Niche to keep its cans on the street if the company paid an unspecified licensing fee. Niche officials have countered that the case has no merit. No trial date has been set.

Instead of conducting a bid process, the city opted to deal exclusively with Niche, which has ties to the brother of Chief Administrative Officer Charles Rice as well as to a lawyer who worked for Rice when he was city attorney.

Not only has the city paid for the cans -- which, at $750 a pop, have cost a total of $450,000 -- but Niche is forking over only 15 percent of the revenue from its sales, which so far have been less than brisk.

The city recently received the first of the royalty checks that are supposed to arrive twice a year. The total: $5,969. At the current pace, it will take the city 38 years to recoup its investment.

It is unknown how many ads the company sold to make that figure. Niche Chief Executive Officer Rodney Whitney refused to answer questions, but sales appear very slow: It is difficult to find any ads that are not "house ads": those that promote cleanliness, a donor to the "Imagine It Clean" campaign or Niche itself.

In Atlanta, Mashburn said he has been able to fill 63 percent of his ad space in nine months. If his company had access to the 600 cans in New Orleans and was able to sell ads at similar rates and at a similar pace, New Orleans would receive a check totaling almost $100,000 every six months.

Mashburn also noted that the city's decision to finance the purchase of the cans may have contributed to the slow pace of sales because Niche isn't on the hook for any real costs.

"If everything's coming out of your own pocket, you've got a real incentive to sell," Mashburn said. "Otherwise, you die."

When Christian Nardi of Verres Media saw the new trash cans popping up all over downtown New Orleans, he got a queasy feeling. That was my idea, he thought. When he learned about the terms the city had settled on, the queasiness turned to anger.

"I thought I got the shaft," Nardi said. "I felt like all the work I did on the proposal was for the city to take my idea and give it to someone else."

Verres' proposal, presented in early 2003 in response to a call by the Nagin administration for marketing ideas, centered on "traffic channelers," barricades with advertising used in airports and on outdoor walkways to steer pedestrians.

The process drew five responses, none of which the city pursued.

Verres' proposal also featured a picture of a trash can with four ad panels similar to those the city began buying from Niche last summer, and noted that the company could provide them as well.

Nardi said he made clear to city officials that the cans would be made available to the city under the same terms he offered for the traffic channelers. His terms: Give the cans to the city for free, maintain them and give the city 40 percent of the revenue from ad sales.

Nardi said he and an uncle who is his business partner "were both in awe of the idea that teachers are buying their own paper and books for students, and meanwhile the city is spending $750 apiece on trash cans that we offered the city for free."

But officials in the Nagin administration vigorously dispute elements of Nardi's account. In particular, they say, Nardi emphasized channelers, not trash cans, and that he never explained in writing the terms under which he could provide the cans.

"I read through every one of those proposals in exhaustive detail, and I would never remember he presented trash cans," said marketing director Matt Konigsmark, who coordinated the request for proposals for branding ideas. Konigsmark was not involved in last year's procurement of the trash cans.

"It is clearly an afterthought," Konigsmark added. "This whole proposal is focused on channelers, and then there's one page that said, 'Oh, by the way, we can do this.' There are 20 pages in the book, and 19 of them were on the channelers."

A review of the document shows that the garbage cans are indeed mentioned only in passing. The proposal also does not state that the financial terms would be the same as for the channelers.

But Nardi said he mentioned the garbage cans when he delivered the document to Konigsmark and made clear that the same terms would apply. Konigsmark said he does not recall such a conversation, and that even if it occurred, the members of the evaluation committee, which included Rice, would have relied on the written proposal to make its decisions.

"I certainly wasn't aware of the financial aspects of it," Konigsmark said. "He may have been willing to do it on those terms, but he didn't make that clear."

Konigsmark added that he read certain aspects of Nardi's proposal to mean that the city would have to help the company sell ads. "We're not really staffed to do that," he said.

Nardi said he was never expecting that kind of help. Rather, he wanted the city to assist in smaller ways, such as giving the company a letter it could use when soliciting potential customers.

"We wanted an endorsement," Nardi said. "We wanted their contacts, not for them to help us sell."

Rice has publicly defended the decision not to seek a better deal for the city through competitive bidding. After all, he said, the idea of trash cans with advertising on them occurred to him only because Niche representatives gave him and other city officials a demonstration of the cans, purported to be "bombproof."

In fact, that anti-terrorism feature makes the cans different from the cans that Niche's competitors offer for free, Rice said through a spokeswoman. But even if Niche's cans cost more than others, many of which claim only to be "bomb-

resistant," Niche's deal is unusual in that the company was not required to spend any money up front.

Rice said he was impressed with the cans and decided to have the city's trash collector, Waste Management, buy 600 of them, to be reimbursed by the city.

The pass-through arrangement freed Rice from having to follow public bid laws. Though he could have conducted one anyway, he said a bid process would have been unfair to Niche.

"Look at this realistically," Rice said in a November interview. "If you brought me an idea, would it be fair for me to steal it and profit from it? This was their idea."

Last week, Rice took a slightly different tack, saying his decision to deal with Niche -- which is owned by an African-American, Whitney -- stemmed from a desire to fulfill the mayor's goal of nurturing minority-owned businesses.

"The mayor stated he wanted to increase and build the African-American middle class and to increase African-American entrepreneurship," Rice said. "This was a young, energetic African-American company, and in keeping with the mayor's vision, we decided to work with them."

But though Rice said the city's dealings with Niche are purely about promoting black business development, there are close connections between Rice and people affiliated with the company.

Terrence Rice, Charles Rice's brother, was working for the firm when the deal was announced, the company president said at the time. The company's chief executive later denied that Terrence Rice had worked with Niche.

Terrence Rice has not responded to questions about his relationship with the company. Charles Rice, meanwhile, refused to take questions on the matter, referring them to his brother and company officials.

In addition, Bobby Smith, whom Charles Rice hired as an assistant city attorney shortly after his own installation as city attorney in 2002, left City Hall in March 2004 and now works for Niche Marketing.

Smith's departure from City Hall, where he was earning $61,000, came about three weeks after Niche Marketing was incorporated, according to state records.

Nagin spokeswoman Tami Frazier said Rice was unaware of Smith's relationship with Niche. She also noted that Rice was not city attorney at the time of Smith's departure and said Rice had not kept track of him.

Asked whether he thought the purchase was a good one, Nagin said: "When I reviewed this transaction many months ago it looked like a good deal to me. I also recall this program being funded by private dollars. I have no other comments since I have not looked into the specifics in quite some time."

In fact, half the money spent on the cans came directly from the city's coffers. The other half came from the "Imagine It Clean" fund, which received large contributions from city contractors Waste Management, Browning-Ferris Industries and Harrah's New Orleans. The money was spent at the city's discretion.

The controversy about the cans goes beyond whether the deal was a cozy one. Some New Orleanians also are offended by the cans themselves.

City Councilwoman Jacquelyn Brechtel Clarkson, who represents the French Quarter and is generally a staunch ally of Nagin, wrote Sanitation Director Veronica White a letter in November asking that the so-

called "Jazzy Cans" be removed from the Quarter. Clarkson said she had received several complaints about the commercial cans.

White responded that the cans "represent part of the Mayor's 'Imagine it Clean' campaign and as such it is not at my discretion to remove them without his authority." White said she would forward Clarkson's request to the mayor.

Clarkson said she had not heard back from the mayor and doesn't expect to. "He has more important things to do," she said.

Clarkson's efforts were cheered by some Quarter activists who said the cans are out of place, only more so since they are often placed near ad-free trash cans that were hailed at the time of their installation, just a few years ago, for being good-looking receptacles adorned only with a fleur-de-lis.

Nathan Chapman, president of the French Quarter neighborhood group Vieux Carre Property Owners, Residents and Associates, lauded Clarkson for her efforts to rid the area of the newer, more commercial cans.

"We do feel they're not fitting within the historic ambiance of our city's most historic district," he said. "I just think the French Quarter is our showcase for the world, and it cheapens our image. Advertising on trash cans is not the symbol of the city that we ought to be putting out there."


Licensing contract awarded: An article in Tuesday's editions about a contract for downtown trash cans that display advertising erred in saying that the city of New Orleans had not picked a contractor to develop a separate sponsoring and licensing program for products and events bearing the city's imprimatur. In fact, the city last year awarded such a contract to a joint venture comprised of three firms: DD Marketing Inc. of Pueblo, Colo.; Trumpet LLC, a New Orleans advertising agency; and Rehage Entertainment Inc., a promotions company with offices in New Orleans and New York. (1/20/2005)

LOAD-DATE: March 12, 2005

Copyright 2004 The Times-Picayune Publishing Company
Times-Picayune (New Orleans)

Garbage Cans, Rice -- Times Picayune May 2, 2005

Copyright 2005 The Times-Picayune Publishing Company
Times-Picayune (New Orleans)

May 2, 2005 Monday


LENGTH: 761 words

HEADLINE: New bids planned for trash can ads;
N.O. is after bigger slice of revenue pie

BYLINE: By Gordon Russell, Staff writer


Mayor Ray Nagin's administration plans to seek new bids in June for a controversial contract to sell advertising on hundreds of trash cans the city placed around town last year.

The no-bid contract now in place is held by Niche Marketing USA. Niche touted the cans as "bombproof" in convincing the mayor's "Imagine It Clean" campaign to mix city money and private donations and spend $450,000 on them. Niche also committed to sell ads on the sides of the cans and give City Hall a 15 percent cut of the revenue.

The controversy over the contract partly stemmed from ties between Niche and Charles Rice, Nagin's chief administrative officer, who recently issued a letter announcing the city's intention to seek new bids. When the deal was announced last summer, a Niche official said Rice's brother, Terrence Rice, worked there. Subsequently, the company's chief executive, Rodney Whitney Jr., denied that Terrence Rice was an employee.

Also, Niche employee Bobby Smith once worked for Charles Rice at the city attorney's office.

And the questions didn't end there.

While the city was buying 600 "Jazzy Cans" at $750 a pop, at least three competing businesses told The Times-Picayune that they routinely provide similar cans to cities for free in exchange for the right to sell ads on them. And two of the three said other client cities usually collect more of the proceeds than the 15 percent cut New Orleans settled for.

So far the city's return on its $450,000 investment has been paltry. The first of what are supposed to be biannual checks from Niche arrived in January. The total: $5,969. More than three months later, sales still appear to be sluggish.

Rice's letter said the city plans to issue a request for proposals for advertising sales by June 3, a few weeks before Niche's second royalty check is due. Beginning that same date, Niche "will no longer be authorized to sell advertising on the Jazzy Cans," the letter says.

However, the company isn't being fired outright. In a letter to Whitney, the ad firm's CEO, Rice encouraged Niche to submit a proposal.

In a written statement, Rice said he decided to seek bids "in an effort to be cost-efficient and provide better quality service to the citizens of New Orleans."

Rice also said the city has no plans at the moment to buy more cans "but will leave that open for the winning vendor to purchase cans if needed."

The decision to issue the request for bids comes two months after Richard Mashburn, president of Atlanta-based Eyeball Media, wrote to the city offering to sell ads on the trash cans. Mashburn, who has trash can advertising contracts in Atlanta, Memphis, Tenn., and other places, offered to sell the ads in New Orleans on a nonexclusive basis, meaning Niche could continue its own sales effort.

In the letter, Mashburn offered to give the city 25 percent of the money from the ads he sold, a sharp improvement on the 15 percent paid by Niche.

Mashburn has yet to receive a response to his letter. But he said he was encouraged by the city's willingness to seek fresh proposals and said he plans to bid.

"We're going to send a certified letter to Mr. Rice requesting that we be on the request for proposals list," he said. "We'll make a nice offer, one that's going to be hard to turn down."

Two other vendors in the trash can advertising business also said they're likely to enter bids.

Christian Nardi of Verres Media, who pitched the idea of selling ads on pedestrian "traffic channelers" or garbage cans in a 2003 proposal to the Nagin administration, said he'll probably bid.

Nardi's earlier proposal was in response to a request from the city for ways to make money through "branding" the city. Though that proposal focused on traffic channelers, it also made clear that his company could provide trash cans. The company was offering the city 40 percent of the revenue.

Meanwhile, City Media Concepts, which sells advertising on trash cans in New York's Times Square and elsewhere, will also likely bid on the New Orleans business, according to Vice President Peter Arbor.

When City Media became aware of Niche's New Orleans contract last year, it filed a "trade dress" suit against the local firm.

Essentially, the suit claimed that City Media pioneered a trash can with a certain look and features and that Niche had parroted it.

The suit has since been settled, said City Media's attorney, Andy Langsam, adding that the terms of the settlement are confidential.

Kerry Brown, Niche's attorney, did not return phone calls seeking comment.

. . . . . . .

Nagin & Rodney -- Louisiana Weekly January 2002

Inside Political Track

By Christopher Tidmore
January 21, 2002 talkback

Who Are You?...

The biggest question in the media in recent days has dealt with the source of a group of ads attacking State Senator Paulette Irons. The TV and radio spots have targeted the New Orleans Mayoral candidate as unethical in the light of the Attorney General's opinion that concluded she had violated the state's dual officeholder law.

Irons, following a televised debate last week publicly charged that the campaign of Police Chief Richard Pennington was responsible for the ads. It was an allegation with which Pennington violently disagreed.

In a statement released on January 16th, the superintendent said, "Paulette Irons has made serious accusations against me and my campaign regarding a television commercial. These accusations are absolutely and unequivocally false, and I challenge her to furnish proof of my involvement."

An investigation by The Louisiana Weekly has discovered that several of the ads were purchased by Ray Walker. In an exclusive, this newspaper has learned that Ray Walker is the father of Pennington supporter and contributor Reginald Walker.

Campaign finance documents reveal a series of contributions from Reginald Walker to the Pennington for Mayor campaign. When asked what the relationship between the younger Walker and the Chief was, Pennington Press Secretary Pierre DeGruy said, "I do not know who Reginald Walker is. He is not a campaign advisor, I can tell you that."

Why Are You Here?

Justice Revius Ortique has conducted a unique fight at Armstrong International Airport. The Aviation Board member has maintained an office at the front of the Southwest/Continental Terminal for some time, but with the new security checkpoints, he was asked to give it up.

The reason was simple. The long lines of travelers that have begun to plague New Orleans's International Airport could be cut by 50% if Ortique gave his space to the burgeoning security force. However, such arguments did not motivate him to leave. The Aviation Board formally requested that he move. He refused. Mayor Morial asked him to relocate. Ortique said, no, sir. Congressman Vitter's office begged him to vacate after it received numerous complaints. Ortique said, forget it.

Sources close to Ortique revealed that he feared the loss in prestige that would come if he left his large and prominent office at the front of the airport. His leverage within the governing Aviation Board would decrease, the source said that Ortique reasoned. The decision would affect him too much personally.

Finally, where political influence did not work, corporate power did. A delegation from Continental and Southwest Airlines apparently met with the Aviation member in a closed-door conference. No comprehensive report has come from any of the participants, yet afterwards, a reportedly frustrated and shaken Ortique said that he would leave his space.

Ortique could not be reached for comment about the meeting, and the Public Information Office of Armstrong Airport only commented, "Mr. Ortique has left the office."

Also At Armstrong...

Bob Tucker, friend of New Orleans Mayor Marc Morial, has endeavored to win the $20,000,000 management contract at the Airport for some time. Of the original six applicants for the private operations contract, only Tucker's AMC and Parson's Aviation remain.

A private poll of the Aviation Board allegedly reveals that the majority of the members want Parson's, an international firm that operates airports all over the world, to get the contract. The members were reportedly impressed by Parson's experience and expertise. However, sources reveal to The Louisiana Weekly that "friends of Tucker and Morial" have blocked Parson's bid

The reason, they explain, is that the airport contract lasts for five years and would protect many of the patronage and profession service contracts currently held by Morial allies. They cite as proof the disqualification of the first technical committee.

The Aviation Board empowered that technical committee to determine who was the best qualified for the contract. The advisory panel ruled that Parson's should have the bid. A move came from several members of the Aviation Board to disqualify the technical committee and empower another.

According to one individual close to the bid process, "It should have been finished six months ago. We are trying to get some ruling from the FAA [to push the Parson's bid]. They have been less than straightforward with the board on the way they handled it...They have manipulated the process."

Who Are You For?...

One of the most confusing questions in New Orleans politics in this past week has dealt with who City Hall insider and Morial confidant Roy Rodney is supporting for mayor. Rumors some weeks ago implied that Rodney would back Councilman Troy Carter as his friend and ally Ira Middleberg had.

In fact, a rumor campaign to that effect circulated around the city. Even the entry of Rodney's business partner Ray Nagin into the race did little to quell the idea that the Morial insider planned to team up with Carter. Political insiders immediately took to the story because of its allure. It seemed to hearken to a move by Morial's political organization L.I.F.E. (Louisiana Independent Federation of Electors) to back Carter. With the news that fellow Morial alum Middleberg had jumped on board made the story even more believable.

There was just one problem. The rumor was not true. For the most part, the L.I.F.E. members have sat out of this contest. Some back Pennington. Most are waiting for the runoff before they publicly make their stand. However, their leaders are desperate not to show a division in the ranks.

When this newspaper contacted Mr. Rodney and asked the simple question: who he was supporting and was the candidate Troy Carter, as the rumors alleged, it was his secretary who returned the telephone call in Rodney's place and said definitively that the attorney did not support Carter. So, this reporter responded, "Who is he supporting?"

The secretary said, "I can't tell you that."

"You can't tell me that? Why not?"

"I just can't?" she concluded, and implied that comment would be the last that Rodney would release to the press.

As strong as a political position as L.I.F.E. continues to hold in the Crescent City, there is an attitude held by many of the candidates this season that a strong connection to the Mayor is the political kiss of death, considering the reform attitude that prevails in the city today. One can observe this displayed in the lengths that the Pennington camp goes to separate itself from Mayor Morial and show the Chief's independence.

One source says that Rodney does indeed support his friend and business partner Ray Nagin, but one can never tell in the somewhat Byzantine atmosphere that has descended upon this year's fractured election.

Just for the record, any implication or statement that this column might have made to connect Roy Rodney to Troy Carter is inaccurate, and we retract it.

Where Are You?...

In early 2001, when the legislature reduced Harrah's New Orleans casino taxes by $50 MILLION, they required that employment not drop below 90% of the base employment.

Columnist C.B. Forgotston has learned that as of December 22, 2001, there are a total of 2,437 employees or 26 fewer employees than on November 20, 2001. That is 230 fewer employees or 91.34% of the base or 563 fewer than the alleged 3,000 employees the legislators were told they had to save.

The Weekly has also learned from a source that the Foster Administration is formally considering a provision to include removing the statutory "floor" on the number of employees in the upcoming special session for economic development.

Who's For You?...

City Council District A candidate Jay Batt has received the endorsement of the Regular Democratic Organization (RDO), continuing an ongoing string of endorsements for Batt at the expense of incumbent Councilman Scott Shea.

The successful businessman and civic leader has also received the endorsement of the prominent Gay Rights group LAGPAC and earned the nod of their rival, the Forum for Equality. Batt has also won the politically influential endorsements of Jim Singleton's B.O.L.D. organization and Ed Murray's T.I.T.S. All of these politically influential groups had endorsed Shea in their first match-up 18-months ago.

On the money front, the last fund-raising report showed just slightly more than $30,000 in the Shea warchest, more than six figures less than the amount Batt had raised. If money and political support have slowly left Shea, will the power of incumbency be enough to avoid a runoff with Batt? Only time will tell.

Where Are You Going?...

Members of the New Orleans Right to Life Committee are embarking on their annual lobbying sojourn to Washington D.C. They plan to walk the halls of the Capitol, meet with Louisiana's Congressional delegation, and march on behalf of the pro-life issue. They were scheduled to leave on Sunday, January 20th.

What Should We Do?...

When discussing whether New Orleans should privatize its Sewerage and Water System, the voters might find it beneficial to learn of the experience that one of the bidders on the Orleans contract had when it took charge of the water systems in Atlanta. This editorial from the Atlanta Journal-Constitution outlines the problems with one of the three companies pursuing New Orleans' local management agreement.

"When United Water won a 20-year contract to run Atlanta's troubled water system - the largest private contract of its kind in North America -- the company forecast annual savings for the city of at least $2 million. Just three years later, United now wants the city to pay more.

"During the last days of the administration of Mayor Bill Campbell, the giant company pressed to increase its long-term contract by $80 million, far in excess of the legal limit allowed by the city's purchasing code. But thanks to the courage of two city officials, the new administration of Mayor Shirley Franklin will have a chance to re-examine United Water's contract. It should make that examination a priority.

"The United Water juggernaut was stopped by Atlanta Water Commissioner Remedios Del Rosario. Alone among those whose names were required to sign off on additional money for United Water - including Campbell and financial and legal officers - she refused to sign, calling the contract change unethical. Fortunately, Del Rosario received strong backing from Councilwoman Clair Muller, chairwoman of the Council Utilities committee. Muller called United's request "absurd" and threatened to sue if the company insisted on charging extra for work she believed part of the contract bargain.

"It was a bad idea to give United Water a 20-year contract in the first place. Other cities have retained more leverage and extracted greater accountability in private contracts by requiring more frequent rebidding. Milwaukee and Indianapolis, for example, have sewer system contracts with United for less than 10 years.

"But Campbell didn't take the time he should have in handling his first major contract to privatize a city service. In the middle of a tense re-election campaign, he was in a big hurry to get a deal that he could sell to voters.

"After he was re-elected, he didn't follow through to make sure United Water did its job well. Burdened with a decrepit infrastructure and a poorly trained and inefficient work force, the Atlanta water system was surely the perfect privatization candidate. But without careful oversight, there was no guarantee that a private company would do any better.

"Nor was there any guarantee that United Water would make a profit off the contract. Its executives gambled that it could run Atlanta's water system efficiently, save the city some revenue and still make money for itself, and sometimes in private enterprise the risk doesn't pay.

"Now, the company is complaining about "unanticipated" problems - waterline breaks, the cutting of lines by cable companies, the monitoring of water use during the drought, and delays in capital projects. (By the way, if telecom companies cut waterlines, why not force them to pay for the problem instead of city ratepayers?) Basically, it wants to renegotiate its contract for more money.

"Nothing doing. The new city administration has some leverage with United Water because Muller insisted on a provision allowing the city to terminate the contract "at will." The city might incur some costs in doing so, but if United can't live up to its low-bid contract, it might be cheaper to look for a new bidder."

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