Federal prosecutors expect the owner of a prominent construction company to plead guilty to his role in an alleged bribery scheme involving more than $1 million in payments to secure city of Atlanta contracts.
The plea deal, expected before the end of the month, jarred City Hall with the revelation that for years, some lucrative city contracts may have been for sale.
Legal experts said the deal and allegations are signs that others with ties to city government are targets of the investigation. Elvin R. “E.R.” Mitchell Jr., 63, the owner and principal of E.R. Mitchell Company, was arraigned Tuesday on federal bribery and money laundering charges. Experts said he is likely cooperating with federal authorities.
“It looks like they’re on to something here and other shoes will drop going forward,” said Joe Whitley, a former U.S. Attorney in Atlanta and chairman of the Government Enforcement and Investigations Group at the law firm Baker Donelson.
“My sense is this is the first step in several more events concerning this investigation, including potential charges against others,” Whitley said Wednesday. “As we speak, there probably are discussions between the U.S. Attorney, the FBI and those parties.”
Atlanta criminal defense attorney Don Samuel said “you should assume [Mitchell is] cooperating.”
Mitchell allegedly conspired with an unnamed individual in the construction industry to pay bribes to another unnamed person connected to the city. Mitchell believed some of the money would go to one or more city officials with influence over government contracts, according to a charging document filed in U.S. District Court in Atlanta. The scheme allegedly occurred from 2010 to 2015.
Craig Gillen, a noted Atlanta defense attorney who represents Mitchell, declined to comment. Attempts to reach Mitchell were not successful.
The explosive allegations come against the head of one of the city’s best known minority contractors and a company that has been a fixture in the region’s public procurement scene for decades.
‘Brazenly sought to buy … contracts’
E.R. Mitchell Company and its subsidiaries have taken part in major government construction projects for the DeKalb and Fulton county school systems, the city of Atlanta, Hartsfield-Jackson International Airport and the Georgia World Congress Center.
“Mitchell brazenly sought to buy government contracts,” U.S. Attorney John A. Horn said in a news release Tuesday.
The FBI and the criminal investigation division of the IRS are heading the investigation.
Whitley said the investigation has likely taken months if not years.
City Attorney Cathy Hampton said the law department has been aiding the Justice Department, and “we will continue to do so.”
“Any allegation that the City’s procurement process has been compromised in any way undermines the public’s trust in government,” Hampton said in a statement.
A spokeswoman for Mayor Kasim Reed said the mayor was attending the U.S. Conference of Mayors meeting in Washington, D.C., and was unavailable for comment. She declined to say if the city knew the individual or individuals targeted by the federal probe.
Atlanta City Councilwoman Felicia Moore, who’s been a watchdog of Reed’s administration and two prior mayors, said it’s troubling that Mitchell has agreed to plead guilty.
It means that he’s not only admitting to bribery, but admitting that someone with the city helped him, Moore said. The implication is that somewhere in the city’s process of checks and balances, something is either broken or someone figured out how to beat the system, she said.
“We’ve got understand who are the people, what role do they have in the government, and how they were able to assist without general knowledge of things occurring,” Moore said.
Decades in business
Mitchell’s father, E.R. Mitchell Sr., who died in 2012, founded the company in 1960 after a successful career as one of the first construction superintendents with Flagler Construction, according to an obituary at the time.
The elder Mitchell also helped found Capitol City Bank & Trust in the 1990s, one of Georgia’s largest minority-owned banks. The bank later would fail in recent years, swamped like many local banks by real estate loans that soured following the Great Recession.
The younger Mitchell is the owner of E.R. Mitchell Company, Cascade Building System LLC, E.R. Mitchell Group, Inc. and EC & WT Construction Company, Inc., doing business as the E.R. Mitchell Construction Company, according to court records.
Mitchell is a member of the board of advisors at the Robinson College of Business at Georgia State University and is on the advisory board of Atlanta-based nonprofit Visiting Nurse Health System.
His businesses have been involved in controversy before, with probes into questionable dealings going back at least two decades.
Among the most recent, Mitchell’s companies were partners with construction giant Heery International in managing DeKalb County Schools construction projects under a 2007 education SPLOST. The pair were suspended by the school system and later fired, triggering a years-long legal battle, with the contractors alleging false termination and the country schools alleging billing fraud and mismanagement.
Mitchell later settled with the school system and switched sides, working with the schools in their case against Heery. The legal morass ultimately led to the termination of then-Superintendent Crawford Lewis. DeKalb schools and Heery settled the case after protracted litigation and monumental legal fees.
In 2006, the AJC reported E.R. Mitchell Construction was no longer allowed to bid on Fulton school projects as part of a settlement with the system over disputed charges following a forensic audit of construction spending at four county schools. The firm also paid the schools $1 million to resolve the dispute.
Moore said, whatever transpires with the current federal probe, the city has work ahead of it to ensure the integrity of its procurement systems.
“It’s important for us to figure out and to understand exactly how that happened, because there may need to be additional check and balances from the council on procurement issues,” she said.
Staff writers Kelly Yamanouchi and Raisa Habersham contributed to this story.