Contractors sentenced to prison in Atlanta City Hall bribery scheme

October 10, 2017 Atlanta - Elvin “E.R.” Mitchell Jr. walks to the federal court Tuesday morning, October 10, 2017. Mitchell was sentenced to five years in prison for his role in the Atlanta City Hall bribery scheme. HYOSUB SHIN / HSHIN@AJC.COM

Credit: Hyosub Shin

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October 10, 2017 Atlanta - Elvin “E.R.” Mitchell Jr. walks to the federal court Tuesday morning, October 10, 2017. Mitchell was sentenced to five years in prison for his role in the Atlanta City Hall bribery scheme. HYOSUB SHIN / HSHIN@AJC.COM

Credit: Hyosub Shin

Credit: Hyosub Shin

Two contractors who admitted last winter to paying bribes to win city of Atlanta contracts on Tuesday became the first two people sentenced to federal prison for their parts in the long-running pay-to-play scandal.

Elvin “E.R.” Mitchell Jr., 63, a politically connected Atlanta contractor and the federal government’s star witness, was sentenced to five years in prison. A few hours later, Charles P. Richards Jr., 65, of Tucker, a lifelong friend of Mitchell’s and partner in some city work, was sentenced to 27 months.

Since Mitchell came forward and admitted guilt in January, prosecutors have earned guilty pleas from Richards and Adam Smith, the city’s former top purchasing officer, on bribery charges.

In fact, it was learned in court that Mitchell wore a wire in September 2015 to implicate Richards.

The scandal has led to a cloud of suspicion over City Hall about who else — besides Smith might have taken cash in exchange for lucrative city business. The scandal and rooting out corruption also have become some of the biggest issues of the campaign to succeed Kasim Reed as mayor.

U.S. District Court Judge Steve Jones told both Mitchell and Richards at their respective hearings that they betrayed the trust of the public, a foundational aspect of government.

“If citizens don’t have trust in government, it weakens that foundation,” Jones told Mitchell at his morning hearing.

The feds alleged Mitchell and Richards were part of a conspiracy to pay more than $1 million in bribes to an as-yet-unnamed person under the belief some of the money would go to one or more person with influence over contracts.

Credit: Hyosub Shin

Credit: Hyosub Shin

Both men agreed to testify against others in exchange for leniency in sentencing.

“Today serves as a valuable lesson to all that no individual is above the law and compromising or interfering with the City’s procurement system will not be condoned in any way,” a statement from Reed’s office reads. “We will not rest until this case is fully resolved and justice has been served to those involved in any wrongdoing.”

Mitchell was sentenced to the maximum allowed under the statue for the sole count of conspiracy to commit bribery and money laundering, and ordered to pay $1.12 million in restitution. Richards was ordered to pay $193,000 in restitution.

Prosecutors said Mitchell’s sentence could be reduced from the five years pending further cooperation in the federal probe.

“Your honor, I would like to sincerely apologize,” Mitchell told the judge. “I have been and continue to cooperate with the government.”

Credit: Hyosub Shin

Credit: Hyosub Shin

Mitchell, who ran a business called Cascade Building Systems, won more than $7 million in emergency snow removal contracts in 2011 and 2014, and bribes he paid lined up near times when Mitchell was awarded work.

He also was a partner with Richards in an annual sidewalk construction contract that paid the men millions more.

Mitchell and Richards were also ordered to serve 100 hours community service and three years of supervised release. The contractors were released after the hearing and will be notified by the Bureau of Prisons about when and where they will turn themselves in and where they will serve time.

‘Upfront money’

Richards’ attorney, Lynne Borsuk, said her client mentored Mitchell in how to do business “the right way,” but the men drifted apart as Mitchell’s firm became more successful and he took on complicated contracting work with bigger partners.

Mitchell and Richards inherited their companies from their fathers, and both men were struggling to keep their businesses afloat amid the Great Recession.

By 2009, Borsuk said Mitchell came to Richards desperate for help, and it was Mitchell who was the mastermind of the bribery scheme.

“It was called by Mr. Mitchell marketing money,” Borsuk said. “It was not marketing money, it was upfront money.”

In addition to the poor economy and dried up business, Richards was under financial stress, Borsuk said, because he separately owed about $1 million on five speculative residential properties.

Borsuk said Richards took part in paying bribes to keep from having to lay off employees.

“His act was wrong but his purpose for doing so was to help others,” he said.

But Jones said the bribes deprived other companies of the opportunity to earn business and may have cost others their jobs.

Prosecutors have previously said they confronted Mitchell in August 2015 in a restaurant with evidence of tax evasion and bribery.

The following month, Mitchell, wearing a wire, recorded a conversation between the two contractors. In that meeting, Mitchell wanted to know if Richards wanted to pay more “upfront money” to win contracts, Borsuk told the court.

Borsuk said her client didn’t know he was being recorded, and said he didn’t want to pay money upfront.

“He renounced it right there and renounced it on tape,” Borsuk said.

Several friends and business associates spoke of Richards’ work in the community, particularly with youth soccer in a bid for leniency. Borsuk sought a sentence of 18 months.

Richards dabbed his eyes with a tissue as several character witnesses vouched for his work with kids and help to neighbors.

Richards told Judge Jones he didn’t pay-to-play to “get rich,” but to protect his employees. Asked by the judge why he didn’t stop paying bribes, Richards said he had no good answer.

Credit: Hyosub Shin

Credit: Hyosub Shin

“I had opportunities to say no and I didn’t,” Richards said. “I could have. I should have.”

Assistant U.S. Attorney Jeff Davis said Richards wasn’t so clean and urged the judge to stay with the 27-month recommendation.

Though Richards cooperated after he was caught, he paid 12 bribes totaling $193,000 and last agreed to pay a bribe in the taped conversation in 2015, years after the recession ended, Davis said.

“This year has brought into clear focus that corruption in the city of Atlanta is prolific,” Davis said, citing Smith’s guilty plea.

Credit: Hyosub Shin

Credit: Hyosub Shin

The two prison sentences come just weeks after the bribery scandal burst back into public view.

Last month, Smith, the city's former top purchasing officer, pleaded guilty to accepting more than $30,000 in bribes from an unnamed vendor.

Also in September, the Sandy Springs offices of another city vendor, the PRAD Group, were raided by federal agents, though the FBI and U.S. Attorney's Office have declined to say why agents seized documents from the engineering company.

In the time since the federal investigation came to light in January, the feds also cast suspicion on another former City Hall official and political operative with deep personal and financial ties with Mitchell. That official, the Rev. Mitzi Bickers, worked for a number of political campaigns and helped Reed narrowly win the office of mayor in a runoff in 2009.

Prosecutors have subpoenaed Bickers’ records from her time at the city and in her role as a chaplain for Clayton County Sheriff Victor Hill.

The Atlanta Journal-Constitution found in July that Mitchell paid Bickers or companies tied to her more than $1.6 million from 2013 to 2015, within the 2010 to August 2015 time frame prosecutors allege encompassed the bribery scheme.

It is unclear what work she did for Mitchell and his companies in that time. Bickers has not returned repeated calls from the AJC over many months.

She has not been charged or named as a suspect.

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