A government watchdog group says it is worried about the perception of cronyism with Atlanta's massive food and beverage contracts at the airport.
The director of Common Cause says part of the problem is campaign contributions to Mayor Kasim Reed from companies trying to win lucrative airport contracts.
FOX 5’s I-Team counted up more than $80,000 contributed to Reed from nearly three dozen airport concession companies.
The mayor returned some of the money.
One government watchdog group wants to limit contributions like those.
William Perry, of government watchdog group Common Cause, says the recent I-Team investigation of airport food bids has many thinking the city is headed for legal trouble.
“There is no question it is going to boil down to lawsuits,” Perry said.
The I-Team recently reported on the controversial move by the city to rebid its airport food and beverage contract. It is a massive bid, with potentially billions of dollars of business at stake. The city wants to replace most of its food and beverage locations throughout the airport and select vendors for the new international terminal.
But when the bids came in, even though there were 54 proposals still eligible, the city announced too many vendors made too many mistakes on their proposals and decided to throw all the bids out and start all over. Industry insiders were stunned.
“Definitely all politics. It appears the right people didn't submit the right package, so we got to make it right for them,” said Greg Hogle.
“There are really only two decisions here - one was either to go forward and just keep rolling, drop the other firms or completely re-bid,” Mayor Reed said.
The I-Team reported that one politically-connected company, Delaware North, made mistakes on all three of its large bids that covered restaurants and bars on three different concourses -- mistakes that could have caused Delaware North to be eliminated.
At the time those mistakes were made, Delaware North had Mayor Kasim Reed's campaign co-chairman, Daniel Halpern, Rapper Jay Z, and politically-connected airport concessioner Mack Wilbourn as three of its participants.
“We didn't know who the companies were that had the errors. That was not shared with me. It's never been shared with me and anyone who says that is a liar,” Reed said.
The second round of proposals has been turned in. Dan Halpern told us he has no business relationship with Delaware North but would not elaborate.
“What we are not seeing is the reason why those bids are thrown out,” Perry said.
Common Cause has studied the history of scandals and insider dealings at the airport -- a shopping list of everything from insider connections going back to the Hartsfield family to a bribery conviction against former Airport Commissioner Ira Jackson.
“Cronyism and corruption at Atlanta airport happened for decades,” Perry said.
Perry says his organization wants legislation that would prevent companies who want contracts from the city from giving money to city leaders. He points to Delaware North Companies in Buffalo, New York. Delaware Company executives, their wives, and a child contributed $22,000 earlier this year to Mayor Kasim Reed's campaign.
“They gave that amount of money, not because they want a better city of Atlanta, but better opportunities for their business,” Perry said.
Common Cause has twice asked the mayor and city council to adopt legislation to limit contributions from people who want city contracts, in hopes of eliminating even the appearance of wrongdoing.
“We thought Mayor Reed would be the one to end it, to step forward and make Atlanta a shining light in terms of the type of, what we call institutional bribery. We could put a stop to it and he can do it,” Perry said.
Mayor Reed wrote his administration has handled all airport bids in a fair, ethical and transparent manner. He states those who refer to corruption or cronyism should back up their allegations or stop smearing people's reputations.
Delaware North Companies also wrote stating it regularly contributes to political campaigns based on its business interests and has acted in compliance with Georgia laws.
Reed’s entire response is listed below:
Response to call for Mayor Reed to enact pay-to-play reform:
As a state lawmaker for 11 years, I supported every ethics reform bill that came before me. The City of Atlanta has enacted ethics legislation that is as strong or stronger than any major government in the state of Georgia. However, without campaign contributions, candidates who are not wealthy would never be able to spend the time required to meet voters, communicate their ideas or develop their platforms. They would have to focus solely on raising money, which I believe would put them at a fundamental disadvantage and severely limit the pool of qualified candidates for office at the expense of voters.
Still, I have taken the unprecedented step of returning $24,600 in campaign contributions from airport vendors since the release of the initial Request for Proposals for airport concessions in March. William Perry, executive director of Common Cause Georgia, was quoted in a July 20 article in the Atlanta Journal-Constitution as follows: “But we think what Mayor Reed is doing is great. It is very encouraging and surprising. Usually campaigns don’t return money unless there is a scandal. This is an example that should be followed.” To the best of my knowledge, no mayor of this city has ever voluntarily returned campaign contributions during any portion of a procurement process.
Furthermore, it is worth noting that my Administration has bid $2 billion or more for all city-wide contracts, including $1.3 billion for the airport alone, since January 2010 with little or no concerns or problems.
Response to concerns about airport cronyism:
I am aware there have been concerns about procurement practices at Hartsfield-Jackson Atlanta International Airport in the past. My administration has handled the current airport concessions bid, as well as other airport procurements and decisions over the past 23 months, in a manner that is fair, ethical and transparent.
We began the airport concessions bid process nearly a year ago. On January 19, 2011, the city and the airport dedicated a full day to sharing information about the bid process for the concessions contracts with the public. To increase awareness and participation, we asked local chambers of commerce and government leaders to inform their constituents. We invited the media, sent news releases and posted information on the airport website. More than 550 people attended the event, at which city and airport officials from various departments discussed the program’s goals, structure and timeline. Then, we hosted a public pre-proposal conference in late March. When Chief Procurement Officer Adam Smith made the decision to re-issue the request for proposals, we spoke openly with the media to make sure the public understood our rationale.
My administration also has taken other definitive action to ensure transparency at Hartsfield-Jackson airport, such as:
• In January 2010, my administration issued a new request for proposals for the airport bond underwriters to ensure transparency and eliminate any hint of controversy for the issuance of $1.6 billion in bonds.
• My administration managed the most open and competitive process ever for selecting a new Aviation General Manager. I appointed an independent search committee, chaired by Carol Tomé, Chief Financial Officer of The Home Depot Inc., to lead a nine-member panel that partnered with executive search firm Heidrick & Struggles to identify and vet qualified candidates from across the nation.
• My administration opened up the airport’s financial data, an unprecedented action in city government which helped spur Delta Air Lines to invest an additional $30 million in the Maynard H. Jackson International Terminal.
• Under the leadership of City Attorney Cathy Hampton, my administration brought the Corey advertising contract litigation to a close after more than a decade of legal wrangling.
The fact of the matter is that Hartsfield-Jackson is the world’s busiest passenger airport and the economic engine of metropolitan Atlanta. Those who continue to bring up references to corruption and cronyism should have the character and integrity to back up their allegations, or refrain from smearing the reputations of the dedicated employees who manage what is arguably the most successful airport in the nation. If anyone has factual information regarding a violation of ethics, they should report those facts to the city’s ethics hotline rather than making vague and unverifiable allegations in the media.
By multiple objective standards, Hartsfield-Jackson, the world’s busiest passenger airport, is highly successful. In October, the airport received either reaffirmed or upgraded credit rating assignments from Fitch Inc. and Moody’s Investors Service relating to bond issuances for financing the construction of the new international terminal and to outstanding bonds. Today, we learned that the City of Atlanta's Department of Aviation's $1.5 Billion Refunding Bonds have been nominated by the Bond Buyer as the 2011 Deal of the Year for the Southeast Region.
The airport’s concessions program was named the 2011 Best Overall Concessions Program by Airport Revenue News. The airport also received the 2011 Best Concessions Customer Service award and the Best Concessions Program Design award among large airports for the second year in a row.
My administration’s track record and the unprecedented steps we have taken at the airport over the past 23 months should matter. The facts should matter. Our record should matter. It’s time to stop resurrecting ghosts from the past and focus on the present and the future.