Atlanta paid contractor accused of bribery at least $7.3 million

The Atlanta contractor who has pleaded guilty to bribing city officials was paid more than $7.3 million for emergency work during the time he was withdrawing cash for payoffs to win city contracts, according to court records and an Atlanta Journal-Constitution analysis of city payments to vendors.

Cascade Building Systems LLC, a company belonging to Elvin "E.R." Mitchell Jr., received 10 payments for emergency services from the city during a six-year period when Mitchell admitted to conspiring to pay more than $1 million in bribes to obtain city contracts, the AJC found.

Dates on invoices between 2011 and 2014 occur within days of withdrawals and other financial transactions that prosecutors say Mitchell performed to pay bribes and launder money, according to an AJC analysis of the criminal charges and electronic vendor payments data.

On Thursday, the AJC and Channel 2 Action News obtained a subpoena sent to City Hall Nov. 30 for records involving Mitchell and C.P. Richards Construction Co., which used Cascade as a minority subcontractor for city work, according to Atlanta city records.

Federal prosecutors have not said if Mitchell’s emergency contract work is the focus of their investigation, but the subpoena includes two requests for those types of contracts from the city.

Prosecutors declined to comment on the payments to Cascade, as did Mitchell’s attorney. Messages for the C.P. Richards’ owner, Charles P. Richards Jr., and the company’s attorney were not immediately returned.

The city has so far not released contracting records involving Mitchell’s companies.

But the AJC’s analysis sheds new light on the work Mitchell’s companies performed for the city during the time of the federal investigation, and how much money the city paid his company. The analysis also raises more questions about the city’s procurement office, whose leadership had the power to award large, no-bid contracts during emergencies.

Cascade, one of four Mitchell companies identified in federal charging documents, was paid on an emergency basis to remove snow and ice and perform other work during Atlanta's infamous Snowjam in January 2014, when icy roads gridlocked the region. Cascade also was paid for emergency flood repairs in 2010 and snow removal during a 2011 winter storm that shut down the city for days.

Companies chosen to perform emergency work bypass the city's competitive bidding rules, and are picked directly by the Department of Procurement on a recommendation from the agency that needs the work. The chief procurement officer reports to the city's chief operating officer who reports to the mayor.

The city’s chief procurement officer may determine when an emergency situation exists, according to the city’s code of ordinances, and “may make or authorize others to make emergency procurements for supplies, services, construction items or professional or consultant services.” Emergency purchases “shall be made with as much competition as is practicable under the circumstances,” the code says.

Emergency contracts that avoid the normal purchasing process are ripe for abuse, William Perry, the head of Georgia Ethics Watchdogs, told the AJC.

“These no-bid contracts are so dangerous,” Perry said, adding they often go to politicians’ campaign donors.

In an emergency, governments must act quickly, and the public understands the urgency, Perry said.

“But I think in the aftermath you have to be able to prove that the person you paid was the most qualified and was the right person for the job,” he said.

Jenna Garland, a city spokeswoman, reiterated that the city is cooperating with the federal investigation.

“We will not rest until this case is fully resolved and justice has been served,” Garland said. “Those involved in any wrong doing should be prosecuted to the fullest extent of the law.”

Mitchell's attorney, Craig Gillen, declined to comment on the city payments to his client's company.

“I’m not going to comment on it, and I’m not going to ask him to comment on it,” Gillen said.

Millions awarded for winter storms

In March of 2015, the AJC obtained a database of hundreds of thousands of vendor payments made by the city of Atlanta from 2009 to 2014. The AJC compared those payments to information detailed in the criminal charges against Mitchell, which were outlined by federal prosecutors in Atlanta last month.

On Jan. 25, Mitchell admitted to conspiring to commit bribery to obtain city contracts, as well as conspiring to launder money during the time of the scheme. He confessed to paying bribes to an unnamed person under the belief that the funds would be paid to one or more city officials “who exercised influence over the contracting process,” according to the criminal complaint against him.

In 2014, the city paid Cascade $5.5 million for emergency work in response to Atlanta’s Snowjam storm in January of that year and another winter storm the following month, according to the AJC’s analysis. The payments were made in February and March 2014, and were for snow and ice removal along with other services.

The city also paid the company $1.1 million for “cleanup and supplies” in response to the 2011 winter storm that shut down the city for days, the AJC found. It also paid Cascade $576,190 for emergency flood repairs in 2010.

Many of Mitchell’s withdrawals, identified by the U.S. Attorney’s Office as being part of the bribery scheme, line up closely with the emergency work awarded to Cascade, the AJC found.

From Jan. 31 to Feb. 24, 2014, Cascade was awarded five emergency jobs related to the pair of winter storms. During that time, Mitchell made five bank withdrawals totaling $38,000 that were part of the alleged money laundering scheme related to the contract scandal, according to federal prosecutors.

The five withdraws ranged from $2,500 to $9,500 and were intended to bypass federal currency reporting laws for large cash withdrawals, according to federal investigators.

Then, on Feb. 19, Mitchell withdrew $150,000 to pay an individual for a city contract, court records state. That transaction came five days before a nearly $2.5 million invoice for emergency storm services involving six crews, according to the AJC’s analysis.

A similar pattern emerged from the records during the winter storm in 2011. On Jan. 18, 2011, an invoice from Cascade was recorded with the city nine days before the first in a series of cash withdrawals that federal prosecutors have identified as being used to pay bribes.

On Jan. 27 of that year, Mitchell withdrew $70,000 to pay a bribe, then took out an additional $200,000 for bribe payments from Feb. 2 to Feb. 8, according to a court document outlining the government’s case. On Jan. 26, the city paid Cascade $1.1 million on the Jan. 18 invoice.

Bob Page, a spokesman for the U.S. Attorney's Office in Atlanta, declined to comment when asked if the emergency payments were part of his office's on-going investigation.

Atlanta city councilwoman Felicia Moore said the council's Finance Committee raised a lot of questions about the city's cost in responding to the 2011 snowstorm.

“The cost was just so high,” Moore said. “The executive branch has full control over emergencies and what they have to do. The council gets it after the fact, when we have to pay the bill.”

Full scope of Mitchell’s work not yet known

Apart from emergency work, Cascade served as a minority subcontractor to C.P. Richards Construction Co. for projects including streetscape repairs in southwest Atlanta, according to city of Atlanta procurement documents.

From 2009 to 2014, the city paid C.P. Richards nearly $10 million on more than 100 invoices, according to an analysis of the city’s vendor payment data. The vendor data does not show how many jobs Cascade got as a minority subcontractor for C.P. Richards or how much it was paid.

One 2013 contract awarded the partners more than $2 million for streetscape work near Greenbrier Mall, according contract documents in a City Council resolution.

Cascade and one other business associated with Mitchell, Jamco Civil LLC, are on file with the city as having applied for status as minority and or female business contractors, eligible to do business with the city and receive bonus points in the scoring of bids.

Jamco listed Mitchell’s wife, Marjorie, as the contact for the company, but used E.R. Mitchell’s email for electronic communication.

Esther Panitch, Marjorie Mitchell’s attorney, told the AJC that her client had no role in the company and that her name was used without her knowledge. “Any construction business done in her name was done without her consent,” Panitch said.

Through Panitch, Marjorie Mitchell said her husband was close friends with Richards.

The AJC, Channel 2 and other media outlets have made numerous requests for records that would shed more light on Mitchell’s work for the city as either a prime or a subcontractor.

Atlanta Mayor Kasim Reed's administration has cited the federal investigation to deny requests for those documents, moves that First Amendment experts say likely violate the state's sunshine laws.

Reed said Thursday, following his State of City address, that federal prosecutors had given the city the "go-ahead" to turn over the documents, and that the city is to comply with a large release of 1.3 million pages of paper records on Feb. 10.

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Data reporters Jeff Ernsthausen and Jennifer Peebles and Channel 2 Action News investigative reporter Jodie Fleischer contributed to this report.

Atlanta bribery probe: the money trail

Federal prosecutors allege that Elvin “E.R.” Mitchell Jr., who pleaded guilty to one count of conspiracy to commit bribery and launder money last month, withdrew large sums and laundered funds in 2011 and 2014 to pay unnamed persons with influence over city contracts. The timeline below matches up some of those withdrawals with some of the invoices submitted to the city by Cascade Building Systems, one of Mitchell’s companies, for emergency work during winter storms in those years.

Jan. 18, 2011: $1.1 million in two invoices for emergency snow removal.

Jan. 27, 2011: $70,000 withdrawal for bribe.

Feb. 2-8, 2011: $200,000 in withdrawals for bribe.

Jan. 31 and Feb. 1, 2014: $322,000 combined in two invoices for emergency services work in response to snow storm.

Feb. 5, 2014: $7,000 withdrawal to avoid federal financial transaction reporting.

Feb. 7, 2014: $2,500 withdrawal to avoid federal financial transaction reporting.

Feb. 10, 2014: $9,500 withdrawal to avoid federal financial transaction reporting.

Feb. 11, 2014: $182,582 combined in two invoices for emergency salt and snow removal.

Feb. 12, 2014: $748,254 invoice for emergency snow removal.

Feb. 14, 2014: $2.3 million combined in six invoices for emergency storm response.

Feb. 14, 2014: $9,500 withdrawal to avoid federal financial transaction reporting.

Feb. 18, 2014: $9,500 withdrawal to avoid federal financial transaction reporting.

Feb. 19, 2014: $150,000 withdrawal for bribe.

Feb. 24, 2014: $1.9 million invoice for emergency storm response.

Sources: City of Atlanta vendor records; U.S. Attorney’s Office