Contractor paid $185K in bribes for Atlanta contracts, government says

Attorney Lynne Borsuk, left, and her client Charles P. Richards Jr., leave the federal courthouse in downtown Atlanta on Wednesday after charges were announced against Richards in the Atlanta City Hall bribery probe. BRANDEN CAMP

Attorney Lynne Borsuk, left, and her client Charles P. Richards Jr., leave the federal courthouse in downtown Atlanta on Wednesday after charges were announced against Richards in the Atlanta City Hall bribery probe. BRANDEN CAMP

Federal prosecutors on Wednesday charged a second contractor with conspiring to payoff officials to win contracts at Atlanta City Hall.

Charles P. Richards Jr., the owner of a Lithonia construction company, was led into federal court in handcuffs and leg irons to be arraigned in the widening federal probe of corruption in Atlanta’s government.

From 2010 to August 2015, Richards allegedly paid at least $185,000 in bribes to an unnamed person, believing some of the money would be given to city officials with influence over contract awards, prosecutors alleged.

Richards paid the money so that his companies, C.P. Richards Construction Co., and C.P. Richards & Associates, would be given contracts, according to the federal charging document. Those payoffs are connected to $1 million in bribes paid over the same time frame by Elvin “E.R.” Mitchell, prosecutors say.

Mitchell pleaded guilty last month to his role in the scheme and is cooperating with prosecutors. Richards is expected to plead guilty at a hearing scheduled Feb. 16 before U.S. District Court Judge Steve Jones, and is also expected to cooperate with the government.

Richards, 64, and Mitchell were longtime friends, according to Mitchell’s wife, who is suing her husband for divorce, and both took over construction businesses from their fathers.

Since at least 2009, they teamed up to win city work in joint ventures, and also won contracts individually, according to an Atlanta Journal-Constitution analysis of city records.

The city paid Richards’ companies at least $9.8 million since 2009, according to an analysis of city vendor data. The vendor data does not show how many jobs Mitchell got as a minority subcontractor for C.P. Richards or how much Richards paid his company.

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

In 2015, the City Council approved a month-to-month extension of a long-standing sidewalk repair and construction contract C.P. Richards had held with the city since 2009.

Meanwhile, Mitchell’s company, Cascade Building Systems LLC, earned at least $7.3 million from the city for emergency work from 2010 to 2015, much of it for winter storms in 2011 and 2014, according to the city’s vendor data.

Prosecutors identified five bribe payments made by Richards, four of which were paid with checks: a $20,000 check on Jan. 29, 2013; a $15,000 check on Jan. 15, 2014; a $50,000 wire transfer on March 27, 2014; a $12,000 check on June 26, 2015; and a $30,000 check on Aug. 7, 2015.

Richards’ was awarded contracts with at least four different city departments: public works; watershed management; parks and recreation; and planning and community development. The company fixed sidewalks and sewers, renovated a recreation center at Grant Park and was involved in numerous streetscape projects throughout the city.

The government has yet to identify the individual who received the bribe payments from the two men to pass along to city officials. No one at City Hall has been named in connection with the scandal, and the contracts awarded in exchange for the bribe money have not been identified.

Richards and his attorney, Lynne Borsuk, declined to comment after Wednesday’s arraignment. Richards put up a $10,000 signature bond and surrendered his passport as a condition of his release.

Charles P. Richards, a contractor who is accused of conspiracy to commit bribery in order to obtain City of Atlanta contracts, leaves the U.S. District Court, Wednesday, Feb. 8, 2017, in Atlanta. BRANDEN CAMP/SPECIAL

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Richards, Mitchell gave to mayor

In both 2009 and 2011, Richards and Mitchell made political donations to Kasim Reed, when Reed was first running for mayor and again when he was an incumbent. Mitchell’s donations totaled about $7,000, according to disclosure reports, while Richards gave $5,750.

A 2011 Reed fundraiser to which the men contributed proved controversial. In March of that year, Mitchell was a co-chair of an event that drew a number of big city contractors. Chairs were required to raise at least $10,000.

Richards was among the contributors, pitching in $2,500 in his company’s name.

Ethics watchdogs called the fundraiser a classic "pay to play" event and Channel 2 reported that the FBI later examined the timing of the fundraiser. Reed said he played no role in selecting the airport vendors and did nothing wrong.

The mayor ultimately refunded about $25,000 that he raised during the time the airport was accepting bids, but not any of the donations raised from the fundraiser Mitchell helped organize.

“I think we’ll continue to see the players in this game tied together going as far back as that fundraiser,” said Georgia Ethics Watchdog chief William Perry. “I think there will certainly be ties.”

A spokeswoman for the mayor said Richards is “neither a friend nor an acquaintance” of the mayor. Last month, the mayor’s staff described Mitchell as “an acquaintance.”

“As of today, Mayor Reed has raised more than $6 million for his mayoral campaigns,” spokeswoman Jenna Garland said in an email. “He raised more than $3 million for his first campaign. His campaigns have held dozens of fundraisers with hundreds of people in attendance.”

City to release records Thursday

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.

But a few hours after charges were announced against Richards, Reed’s office said it would produce 1.3 million pages of documents at a news conference Thursday, following through on a pledge the mayor made last week.

Howard Shook, chairman of the City Council’s Finance Committee, said the council may have to wait for details of the federal investigation to find out how the bribery scheme worked, and what the council can do to make that type of corruption more difficult in the future.

“I’ve been racking my brain about what can the Finance Committee do to help tighten things up,” Shook said. “Here’s the problem: If you have a combination of people who are willing to collude, it really doesn’t matter what’s in your (legal) code.”

The bribery timeline

Federal investigators say two construction contractors, Elvin “E.R.” Mitchell, Jr. and Charles P. Richards Jr., paid bribes in exchange for city of Atlanta contracts. Here is a chronological listing of money paid by the two men in furtherance of the conspiracy, as identified by the U.S. Attorney’s Office:

Jan. 27, 2011: $70,000 Mitchell cash withdrawal

Feb. 2-8, 2011: $200,000 in Mitchell cash withdrawals

June 23, 2011: $100,000 Mitchell cash withdrawal (money laundering)

Jan. 29, 2013: $20,000 Richards check

Jan. 15, 2014: $15,000 Richards check

Feb. 5, 2014: $7,000 Mitchell cash withdrawal

Feb. 7, 2014: $2,500 Mitchell cash withdrawal

Feb. 10, 2014: $9,500 Mitchell cash withdrawal

Feb. 14, 2014: $9,500 Mitchell cash withdrawal

Feb. 18, 2014: $9,500 Mitchell cash withdrawal

Feb. 19, 2014: $150,000 Mitchell cash withdrawal

March 27, 2014: $50,000 Richards wire transfer

April 1, 2014: $110,000 Mitchell wire transfer

April 1, 2014: $140,000 Mitchell cash withdrawal (money laundering)

June 26, 2015: $12,000 Richards check

Aug. 7, 2015: $30,000 Richards check

Source: U.S. Attorney’s Office.

Atlanta businessman Elvin “E.R.” Mitchell Jr. pleaded guilty in January as part of federal probe into allegations of bribes paid for city of Atlanta contracts. HENRY TAYLOR / HENRY.TAYLOR@AJC.COM

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