Guilty plea, FBI raid of vendor roil debate over Atlanta contracting

7:09 p.m Friday, Sept. 29, 2017 Local

Citing a guilty plea this week by Atlanta’s former purchasing director and a raid by the FBI on the office of a longtime city vendor, a local watchdog group and several mayoral candidates renewed calls Friday for reforms to the city’s procurement process and a halt to the awarding of certain large-scale contracts.

Amid an ongoing federal bribery probe of city hall, Adam Smith, the former top purchasing officer, pleaded guilty Tuesday to accepting more than $30,000 in payments from an unnamed vendor. On Thursday night, an Atlanta television station reported on an earlier federal raid of the offices of engineering firm PRAD Group, which worked on design projects at the Atlanta airport and with the city’s watershed department.

Footage of the raid, which happened on Sept. 20 and had not been previously reported, showed federal agents removing boxes of documents from the company’s Sandy Springs offices.

A spokesman for the FBI declined to comment on the raid or confirm whether it was related to the bribery investigation. A spokesman for the U.S. Attorney’s Office did not return a message seeking comment, nor did PRAD officials.

PRAD, or joint ventures involving PRAD, were paid at least $60 million for work from 2009 to 2014, an analysis of city invoices obtained by The Atlanta Journal-Constitution showed.

Since 2015, it appears PRAD and its partners billed the city another $39 million, according to purchase order data examined by the AJC.

It’s not clear how much of the total PRAD was actually paid.

The raid on the company comes as the city is weighing the awarding of contracts for more than 80 new shops at Hartsfield-Jackson International Airport.

Hyosub Shin/The Atlanta Journal-Constitution
September 26, 2017 Atlanta - Former chief purchasing officer Adam Smith, left, leaves the federal courthouse after pleading guilty in the Atlanta City Hall bribery investigation on Tuesday, September 26, 2017. HYOSUB SHIN / HSHIN@AJC.COM

City officials have been working on a tight time frame to award the contracts by the end of the year, before Mayor Kasim Reed’s term ends in January. It’s a fast track that has frustrated many airport concessions firms, which say they need more time and are concerned about what the next mayor and council might choose to do with the contracts.

Friday, an ethics watchdog and a number of candidates in the race to succeed Reed called on his administration to halt massive procurements, such as the airport retail contracts that don’t expire until next year.

“I’d like to see the Reed administration throw up their hands and surrender this process to the next administration,” said William Perry, executive director and founder of Georgia Ethics Watchdogs.

An executive at PRAD, Jeff Jafari, has ties to a newly formed company bidding on the airport procurement.

A message left for Jafari was not immediately returned.

Noted Atlanta criminal defense attorney Steve Sadow, known in legal circles for not shying away from trials, confirmed he represents Jafari. But Sadow said it would not be appropriate to comment on the federal raid, which was reported first by Fox 5 Atlanta.

The bribery probe erupted in public in January when contractor Elvin “E.R” Mitchell Jr. was charged and then pleaded guilty to conspiring to pay more than $1 million in bribes from 2010 to August 2015 to win contracts. A second contractor pleaded guilty in February.

The Atlanta Journal-Constitution
Contractor Elvin “E.R.” Mitchell Jr. returns to his car after pleading guilty in January in the Atlanta bribery scandal. (HENRY TAYLOR / HENRY.TAYLOR@AJC.COM)

Smith, the purchasing chief, was fired by the city in February the same day federal agents entered his office with a subpoena and seized his city-issued computer and smartphone. They also demanded emails, documents and other material.

In a statement, Reed’s office said it has been “working in full cooperation with federal authorities” since August 2016, months before the investigation became public, “and assisting them remains our top priority.” The statement said “outside counsel has helped review our procurement processes and safeguards.”

“We do not believe, however, that the operation of city government should be ground to a halt,” the statement said.

City and airport contracting can become a political thicket. Recent years have brought a number of delays and disruptions in the contracting process. It’s not unusual for the city to end up restarting the process, in some cases citing the disqualification of some firms due to incomplete documents and/or a lack of competition.

City Council President Ceasar Mitchell, who isn’t related to E.R. Mitchell, again pushed for a moratorium on non-urgent city contracts for services that don’t begin until next year so that the next council and mayor can have their say-so.

“With the guilty plea earlier this week of the former purchasing director and this raid of a city vendor, it only underscores my point the council needs to stop, re-examine the procurement process and consider procurement reform legislation,” said Mitchell, a candidate to succeed Reed

Former City Council President Cathy Woolard, who also is running for mayor, said, “At this point, I have absolutely no confidence in our procurement process at all.”

But she also used the revelations to attack rivals. In a statement, she knocked Mitchell, other current council members and former city Chief Operating Officer Peter Aman for not doing enough to protect the system from “corrupt practices.”

“Going back to 2010, safeguards were not put into place to preclude or discover the bribes that occurred,” she said in a statement.

Aman, in response pounded Woolard, Mitchell and City Councilwoman Mary Norwood for contracts awarded to PRAD in their respective tenures on council and for failing to enact “real ethics reform.”

Aman said the role of COO was removed from the vendor selection process, but said during his tenure “anytime I saw something wrong, I had it investigated and had people held accountable.”

Adam Smith pleaded guilty Tuesday to accepting more than $30,000 in payoffs over two years.

While the PRAD Group is a planning, engineering and design firm, Jafari also has ties to airport concession firms.

And Jafari, along with his wife and business partner, have been campaign contributors to Reed and council members including Keisha Lance Bottoms, Michael Julian Bond and C.T. Martin, records show.

Jafari was at a meeting in August for businesses interested in contracts for airport shops as part of the massive retail revamp at the world’s busiest airport.

He signed in as a representative for the Airport Retail Concessions Group’s team, which on Wednesday submitted proposals for four of ten retail contracts for at Hartsfield-Jackson.

During that August meeting, Jafari asked city and airport officials about the political uncertainty surrounding the contracts in light of the upcoming mayoral election.

“Are we taking that chance as a team that we are going to submit this (proposal) and it might be all thrown out because new regime comes in?” Jafari asked.

The comments drew applause and murmurs from other airport contractors.

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