Atlanta bribery scandal leads to more checks on emergency contracts

A lone SUV makes its way North on a slushy Metropolitan Parkway in Southwest Atlanta on Thursday morning February 13, 2014, as snow falls again over the Metro.

A lone SUV makes its way North on a slushy Metropolitan Parkway in Southwest Atlanta on Thursday morning February 13, 2014, as snow falls again over the Metro.

In the wake of the ongoing City Hall bribery probe and scandal and revelations that “pay-to-play” cost Atlanta millions after the 2014 ice storm, the Atlanta City Council is putting in new controls to hold those responsible for issuing emergency contracts accountable.

Atlanta department heads who sign off on contracts costing more than $100,000 or 20 percent above market rates during emergencies will now have to explain the spending to council, including why a particular contractor was chosen and any connections the contractor have to City Hall officials.

The moves by the council come two weeks after The Atlanta Journal-Constitution and Channel 2 Action News reported that a contractor at the center of the City Hall bribery investigation made millions on emergency contracts during 2011 and 2014 winter storms.

The council has previously explored changes to the emergency contracting process.

But the effort  got a boost after an AJC/Channel 2 investigation found Elvin “E.R.” Mitchell, a prominent Atlanta contractor, was paid $5.2 million for emergency response to the February 2014 ice storm. The AJC reported that Mitchell’s company, Cascade Building Systems, charged prices for equipment and supplies that far exceeded other companies’ cost estimates, or prices paid by the Georgia Department of Transportation.

Councilman Howard Shook pushed for the change. “This will require an extra level of detail and transparency to act as a disincentive for abuse,” he said.

The new rules — adopted earlier this week — are part of numerous pieces of legislation Council has introduced to bring more transparency to City Hall since the federal probe was revealed in late January. Those attempts include requiring all future contracts be posted online and for city councilmembers to upload their expenses to the Web.

In a statement, Mayor Kasim Reed’s office said, “The new ordinance approved by the City Council on Monday is a thoughtful proposal and will promote transparency and accountability concerning emergency procurement. This is a meaningful step in the right direction, and we fully support it.”

Changing emergency contracting got a boost after it was revealed that Elvin "E.R." Mitchell, a prominent Atlanta contractor, was paid millions to help respond to the ice storm of February 2014. The February 2014 storm followed the better known "snowpocalypse" in January 2014, which crippled the area's roadways, forcing hundreds of people to spend the night in cars or to seek shelter in stores and thrust Atlanta into national headlines.

Because of lessons learned in the first storm, the area was better prepared to deal with the February stome and there were fewer problems.

Mitchell's company, Cascade Building Systems, was paid $5.2 million for emergency clean up from the February 2014 storm, far above costs incurred by the Georgia Department of Transportation and exceeding estimates from competing companies, according to an analysis by The Atlanta Journal-Constitution and Channel 2 Action News. Mitchell has pleaded guilty to conspiracy to bribery in the investigation.

In general, city of Atlanta contracts are awarded through competitive bids to the lowest qualified bidder, except in a handful of cases, including during an emergency. The city’s code defines an emergency as “a threat to public, health, welfare or safety under emergency conditions.”

The Chief Procurement Officer is already required to submit in writing an explanation for an emergency contract, but the new rules dictate that that information be made available online or to council within three days following the contract's execution, according to the legislation.

The rules also require the department to use existing contracts if available, a move to encourage the city to better plan for potentially unforeseen issues.

City Councilman Alex Wan said the new requirements will not impede the city from making quick decisions in an emergency nor is it an attempt to add layers of bureaucracy to the process.

The legislation does not say what will happen if a department head does not comply. Shook said the goal is to make department heads own the decisions they make publicly and encourage them to think twice before agreeing to questionable contracting.

“It is by no means going to turn a dedicated criminal straight, but we are going to have a lot more information from which to judge,” he said

City Councilwoman Felicia Moore said councilmembers raised concerns about the overall costs of the storm as soon as the information was available back in 2014, but did not receive the level of detail of how the money was being dispersed that federal investigators uncovered.

“I made the point back then that we paid more than the state of Georgia,” she said. “I was sounding the alarm that this doesn’t make any sense.”

Ron Shelby, a professor at Georgia State University’s Center for State and Local Finance and a former official for Galveston County, Texas, said there is no market rate when an emergency takes place. Government is at the mercy of suppliers, leading to exorbitant pricing.

Smart cities plan by identifying costs of potential calamities before they happen.

“You need to be prepared and do that contracting months in advance,” he said.

Shelby said the new rules are a smart move, but said it will need some real teeth to be effective. He said non-compliance should be noted on a performance review, be a cause for suspension or worse.

“Something needs to be in place to let people know that they are serious about this,” he said. “The one punitive measure is they get fired.”

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