watchdog

Wednesday, May 30, 2007

May 31, 2007

THE TRUE COST OF MINORITY PURCHASING AND WHO BENEFITS

Watchdog has been studying the subject of minority purchasing for some time and it has lots of ramifications. It is one of those subjects that is “politically correct” and the media is very wary of touching and reporting it.

The whole rationale for minority set asides and preferences is that in the past minorities have been discriminated against and there is a lot of truth in that statement. Therefore to make up for past discrimination, it becomes justified to set aside a certain portion of contracts and business that should go to minority firms. This was set in the City Code as shown below.

M/WBE City Code
Sec. 2-325. Minority and women business enterprise procurement program.
(a) Findings. The Memphis City Council hereby adopts the following findings:
(1) Construction, professional services and supply firms owned by M/WBEs in the Memphis
MSA have been subjected, disproportionately, to low participation levels in City of
Memphis contracts and in the Memphis private marketplace relative to their availability.
(2) The City of Memphis has been a direct and a passive participant in a system of
discrimination in the private marketplace in Memphis and, in the absence of the
establishment of certain annual and project goals as well as other procurement
strategies, would continue to be a passive participant in such a system.
(b) Statement of policy. Under all the circumstances and based on the factual predicate which
has been established after careful study and review, the City of Memphis has a compelling
interest to fully remedy the ongoing effects of past and present discrimination against African
Americans and female business owners in both the public and private sectors of its marketplace.
As a passive participant in a system of racial and gender exclusion practiced by elements of the
local construction, professional and supply industries, the City of Memphis has an affirmative duty
to dismantle such a system. This affirmative duty also entails the continuation of initiatives to
encourage the development of local small businesses, in general. Essentially, the City of
Memphis has a compelling interest to assure that public dollars derived from tax collection and
revenues are not utilized to further discriminatory practices.

However the following sections of the City Code do not permit rigid quotas.

Set asides at the City Charter level are not legal. Refer to 2-327 "Goals"
- it states in section (a) - 3, that "The annual goals provided above shall
be reviewed annually by the M/WBE advisory committee. These overall M/WBE
participation goals are only intended to be benchmarks for evaluating the
overall performance of the M/WBE program on an annual basis. These
participation goals are not and, shall not be quotas."

Section B states, "On individual contracts or projects, there is no
requirement that the above annual M/WBE goals be met."

Lastly, Section 2-331 (b) states, "Bid Preference. If upon review of the
results of the annual program goals, the city determines that it has not
achieved the individual M/WBE program goals based on contracts let or awards
made during the preceding fiscal year for women or minority business
enterprises, then the city may consider amending said ordinance to include
bid preference as maybe permitted by law."

The fact that they have not done the last part is testament that it is not a
legally defensible act.
There was a defining lawsuit that was brought by the West Tennessee Chapter of the Associated Builders and Contractors when the ABC chapter and seven local contractors sued the school board claiming the district's 1996 minority participation plan has caused the district to pay more for construction projects that have benefited only a few minority subcontractors.The school board had voted to award those contracts to contractors who had higher minority participation and a higher price tag. The two projects would have cost $411,000 more than the two low bids. The case was decided in 2000 in favor of the ABC and it cost the taxpayers (the School Board) $900,000. The board agreed not to use race or gender as criteria for awarding contracts.
It has been determined in numerous lawsuits around the country that rigid percentages of minority participation are illegal. Minority participation goals have been determined to be legal. Therefore the local government agencies have resorted to other means to achieve their goals and the Uniform Certification Agency and the ACS contract by the City of Memphis is a good example of a scheme to direct contracts to minority firms without the spotlight of open records. But what has been the result of these efforts? What has in fact happened is that a group of certain favored firms and individuals have gotten the biggest piece of the pie. What has been the cost to the taxpayers? Without complete and open records, it is hard to determine but there are some indications which we can point to.
Example #1- MLGW- Thomas Technologies versus Dell Direct.

Here is an email from a source at the MLGW describing the process of this award to Thomas over Dell. The award for "servers" was awarded to Thomas against the recommendation of the MLGW IT department. They were forced to award to Thomas after he applied pressure to the MLGW board. I can tell you for a FACT that he was not low bid. Not even close. They broke the law and the rules by awarding to him. Dell Computers was low and that's who the MLGW Network engineers recommended awarding to. They had done business with Dell direct for years.

Watchdog has posted a lot of information on Thomas Consultants in the past pointing out their successful contracts with the MLGW, the City of Memphis and the County. Here is a partial list of Thomas Consultants deals.
• MLGW for $1,974,572
• MLGW for $1,420,812
• City of Memphis thru the ACS contract for $2,351,055
• Shelby County Government for $934,856.21

The Shelby County situation is interesting in that they recently changed from their old practice of giving business to certain firms to a policy that benefits the taxpayers. Watchdog followed closely (with open records requests) asking for all bids in response to the RFP and all awards) and the result was that the purchasing department and the IT department decided to buy from the Tennessee Dell contract rather than Thomas Technologies saving 30% for the taxpayers. See the attached correspondence verifying this information.

The Herenton Administration has abused it power to award professional contracts blurring the lines between an RFP contract and a professional contract. This abuse is why any future administration should be denied the power to award professional contracts without competitive bids and we will be publishing further information on this subject in the next month.

Click here to read about Shelby County changing course on its computer bids and refusing to pay 30% extra to Thomas

Tuesday, May 29, 2007

May 29, 2007

YOUR SCRATCH MY BACK, I'LL SCRATCH YOURS!!

Following up on my recent article about the need for full disclosure in campaign finance and the need for laws to require electronic campaign contribution and expenditure information, watchdog has attached a somewhat obscure file on the recent campaign by Carlee McCullough for the post of chancery court judge, part II. Take a look at some of the names that appear on the document.

Reginald French, recent candidate for Sheriff, and the owner of Integrate Technologies, a firm that has received millions of dollars in City contracts under the ACS cover contract. Also see attached an October 29, 2002 fax from Carlee McCullough to Lillie Alford of the Uniform Certification Agency (part of the Mid South Minority Business Council) urging her to expedite the approval of Integrate Technologies by the UCA as she has a contract pending for Reginald French.

Elbert Jefferson, currently the new City Attorney, and at the time of the donation, an attorney under Sara Hall, then City attorney.

Paul Rodgers – Owner of LeSure Computer Services – another ACS select
vendor.

Rickey Peete, current City Council member under indictment.

Ricky Wilkins, close friend of the Mayor and a lawyer who gets lots of City legal business.

Ralph Lunati, local topless bar owner.

All of these donations are legal but in the political donation business, the motto is “You scratch my back, I’ll scratch yours.”

Click here to see who contributed to Carlee McCullough's campaign to be a chancery court judge

Click here to read the fax from Carlee McCullough to the UCA urging her to hurry up and approve Reginald French's firm so he could be awarded a contract under the ACS cover

Wednesday, May 23, 2007

DO YOU KNOW HOW TO TELL WHEN IT IS REALLY COLD? IT IS WHEN A POLITICIAN HAS HIS HANDS IN HIS OWN POCKETS!!

May 23, 2007

Watchdog has been working and writing about the absolute necessity of transparency in government and internet access to complete government open records as the only practical answer for good and honest government. As an example, the Shelby county election commission meets today and according to a source they have promised to put all local campaign financial disclosure statements on a new website page after the first of the year. There are two ways to do this. One is to put the printed statements up as a pdf file and the other is to require the local candidates to furnish this information in an electronic format (a spreadsheet such as Excel) and then create a data base so that anyone can easily find out how much a particular person have given to a particular candidate or how much that particular contributor or associated group of contributors has given to that candidate or group of candidates. WHY IS THIS IMPORTANT? The public needs to know who is paying for influence and access and which candidates are they favoring. I have attached two files to illustrate the two options. One is a file on Barbara Swearengen Holt Ware. It is written by hand and in order to put it into a data base, it would be necessary to reenter each item, very labor intensive. The other is a file complied by a local group of activists using the state of Tennessee electronic database and adding some local candidates (not required to file in an electronic form) but which have been put into that format by the local group in order to illustrate and inform the public about what is possible. I call on the state legislature to change the law to require local municipalities to file in electronic form, like the statewide candidates are required to do now, and to do it at this session.

Here is the group of elected local and state candidates that are included in this list.

Barbara Cooper, Beverly Marrero, Bill Gibbons, Brian Kelsey, Bubba Pleasant, CurryTodd, GaryRowe, Henri Brooks, Jim Kyle, Joe Towns, John DeBerry, Kathryn Bowers, Larry Miller, Lois DeBerry, Mark Norris, Mike Kernell, Ophelia Ford, Paul Stanley, Tre Hargett, Ulysses Jones, Ron Lollar, Jim Coley, Mark Luttrell, Reginald Tate, Roscoe Dixon, Harold Ford, Jr, Mike Carpenter, A.C. Wharton, Rickey Peete, Mike Ritz

Click here to see this huge database file showing who contributed to whom and when

Click here to see the hand written Holt campaign forms

Monday, May 21, 2007

May 21, 2007

CAMPAIGN FINANCIAL DISCLOSURE STATEMENTS

Watchdog has been very interested in open records and transparency in government since I started asking for open records information in November 2004. One of the most important open records source is housed at the Shelby County Election Commission. It is the CAMPAIGN FINANCIAL DISCLOSURE STATEMENT.

At the present time it is necessary to go to their office downtown and ask to see the file of a particular candidate. You are then required to fill out a form giving your name and address and it was stated on the form that your name would be reported to the candidate whose file you were asking for. (Now, at the Watchdog’s insistence, that statement has been deleted and hopefully the name is not reported to the candidate as this notification requirement has been deleted by state law).

At a recent meeting I was told by a representative of the League of Women Voters that the Shelby County Election Commission is in the process of planning a new web site capable of including all required local election commission reports. the new web page project is projected to be ready to go by January 2008. I called and the lady that I talked to did not know anything about this. It is available at the state level for statewide candidates, but not at the local county and city level. Hopefully it will be in a data base similar to the state election commission website that allows voters to determine how much an individual donor has given to a particular candidate and to all candidates.

Recently I went down to the office and asked for he files on Herenton, Morris and Chumney. Only Chumney’s file contained a report for the first quarter of 2007. Herman Morris did not have a file as he had not filed for Mayor before the end of the first quarter. (He has since filed and his second quarter report will be due early in July 2007.)

Herenton’s report for the first quarter was not available and I asked where it was. The clerk did not know so apparently he has not filed it. I am assuming that he has filed for Mayor for the October 2007 election. I called the state election finance office and asked about penalties for not filing a required report. I was told that the Shelby County Election Commission would have to send a registered letter telling the candidate that the report was due and not filed and after 5 days, if the report was not sent, then there was a fine of $25 per day for up to 30 days and then a $10,000 fine.

Watchdog believes that only full disclosure and completely transparent government is that only really important thing that can help to restore honest government. Most politicians hate open records because they like to spend your tax money in the dark where no one is looking. I believe that the creditable candidate who promises and eventually delivers open and transparent government where every important document and piece of information is put on the internet will win the election. We need to start with the Shelby County Election Commission and require that all candidates put their reports in a proper electronic format (an electronic spreadsheet) and then the data could be incorporated into a data base which would show who contributed to whom and how much and when and how the money was spent. Money buys influence and the public needs to know who is buying and from whom.

I have attached Chumney’s recent report and the last Herenton report that I have available. The last time I checked, Herenton had around $570,000 in his campaign chest plus whatever he has collected since then.

Click here to see how much Carol Chumney has collected in the first quarter of 2007 and how she has spent some of the money


Click here to see who contributed to Herenton from 2003 to 2005 and how much they contributed

Thursday, May 17, 2007

May 17, 2007

ROBERT LIPSCOMB AND LEMOYNE OWEN COLLEGE SINKHOLE

It is interesting to revisit an open records request that I sent to Sara Hall in 2005. It was concerning Robert Lipscomb and his salaries at the Housing and Community Development Department and the Memphis Housing Authority. His name has surfaced again with his recent proposal to donate $1 million per year for three years to LeMoyne Owen College. He is a graduate of that college.

The public’s reaction to this $3 million dollar bottomless hole is that it should not be done as this is a private college and like other private colleges and institutions, they should fail or survive on their own. However, given the past performance by the City Council, the proposals passage has good possibilities. The Mayor cannot spare money for more police but he can throw money down this bottomless pit.

I have attached the October 12, 2005 letter from Sara Hall explaining Robert Lipscomb’s salary arrangement allowing him to earn more than the Mayor. Also look at the payment to Robert Spence and Ricky Wilkins, special friends of the Mayor. Also I have attached an article reporting on the discovery of seventeen boxes of Beale Street documents found locked in a closet at the Offices of Housing and Community Development at 701 N. Main which of course was headed by Robert Lipscomb. Not one red cent has been collected from John Elkington or Beale Street by the City in all the years of the Herenton Administration.

Click here to read about Robert Lipscomb's combined jobs and salaries allowing him to earn more than the Mayor and Ricky Wilkins and Robert Spence's legal fee bonanza courtesy of the Mayor

Click here to read about Robert Lipscomb's combined jobs and salaries allowing him to earn more than the Mayor and Ricky Wilkins and Robert Spence's legal fee bonanza courtesy of the Mayor

Tuesday, May 08, 2007

May 9, 2007

Minority Reporting Contracts for the FedEx Arena

Watchdog has been working for some time to expose the whole minority contracting giveaways of the Herenton administration. Watchdog has no problem with contracts for minority firms as long as the bidding is fair and open and that the price of the minority edge is revealed to the taxpayers so that they know how much this process is costing them in tax dollars and that they know that the process is fair and even handed. That has not been the record of the Herenton administration.

We show below an example of what we are talking about. More will come later.

The Fedex arena is a good example. We list below part of the contract list for the arena involving three firms that were all to furnish and insure that minority firms were fairly and evenly represented in this $250 million dollars contract. Three firms got contracts as listed below.

• Griffin and Strong $250,574.94
• Monguinn Enterprises Consulting $239,624.97
• Mid-South Minority Business Council $49,999.98

Total for all three $540,199.89

We show below the reports of the three firms as to what they did for the above money. To be fair I must report that Griffin and Strong and Monguinn Enterprises Consulting at least furnished some paperwork and reports for their money. The Mid-South Minority Business Council led by Luke Yancey III sent six bills for $8333.33 and no report or any indication that they did anything for their nearly $50,000 payment except send six bills.

You have to ask yourself about this and why they are sitting on $820,000 in cash as per their IRS 990 report at the end of 2005, up from $684,000 in 2004. What is going on here and why are taxpayers paying for this outfit?

Look at the various reports attached below.

Click here to see what Griffin and Strong did and reported under their contract

Click here to see what Herenton's favorite did for her piece of the pie

Click here to see how the Mid-South Minority Business Council never failed to send a bill but did not report any work for their money

Click here to see the latest available IRS 990 report for the Mid-South Minority Business Council and the pile of cash they are sitting on with the taxpayers help

Sunday, May 06, 2007

May 7, 2007

IT AINT OVER YET AT THE MLGW

The Mayor would like the public to forget about HIS mess at the MLGW and so he fired Joe Lee and Odell Horton Jr. He will take care of them later if he gets reelected. But it is not over and a lot of questions need to be answered. Here is a list.

• What is the final loss in the gas division for 2006? As of November 2006 it was $18 million (a $28 million dollar turnaround from 2005). Who ordered the PGA to be added to the bills during the winter heating season that must now be returned to the ratepayers?
• Why were natural gas prices charged by the MLGW to the ratepayers 26% to 41% higher than the Henry Heb Natural Gas Price Index price? These prices cost the rate payers anywhere from $75 million to $150 million more than the market price of natural gas during this last heating season. Was it a bad guess on futures purchases where MLGW was long on gas futures and most of the smart money was short? Who made the decisions on these purchases?
• An independent public investigation needs to be conducted on the hedging and futures contracts at the MLGW looking at what actually happened and what companies furnished the gas. In an October 7, 2004 statement issued by Joe Lee entitled “First 90 days yields streamlined organization, increases efficiency and collaboration” there was a section titled “Increased Natural Gas Supply Options”. In that section it was stated “ MLGW will soon have access to gas suppliers beyond the Gulf region, as a connection with a third pipeline contractor (ANR) will provide access to supplies from Canada and the Midwest. Texas Gas Transmission and Trunkline, which for many years, have been MLGW’s sole suppliers of natural gas, have each expanded their supply network since last winter, as well, enabling MLGW to draw from resources in the Rocky Mountain region. On October 25, 2005 MLGW issued a News Release containing the following statement “To donate to the “Power of Five” campaign, stop by any First Tennessee Bank location. To kick off the campaign, Panhandle Energy, a natural gas supplier, has donated $250,000. Partners in the “Power of Five” include the City of Memphis; Memphis Light, Gas and Water; and the Women’s Foundation of Greater Memphis.” Was Panhandle Energy a supplier of natural gas during this last winter season?
• The overpayment of PILOT payments (payments in lieu of taxes) by the Gas Division to the City of Memphis amounts to $47 million dollars from 2001 to November 2006. This is in violation of the City Charter and has allowed the City of Memphis to dip into the reserves of the MLGW. This violation of the City Charter needs to be investigated.
• Finally the City Charter and state law states the following. “Any surplus thereafter remaining over and above safe operating margins, shall be devoted solely to rate reduction.” The MLGW is supposed to be operated as a non profit operation. However in the past the MLGW continues to pile up cash, particularly in the electric division to the tune of $53 million in 2004 and $66 million in 2005. At the end of 2005 the total current assets for the three divisions were $369 million versus total current liabilities of $208 million for a net of $161 million, up from $120 million in 2004.

The MLGW has a lot of explaining to do before the Mayor and the City Council can say that everything is fixed and all we have to do is get a new President at the MLGW.

Friday, May 04, 2007

May 4, 2007

SEVERANCE PAY, NO WAY AT MLGW

The call for a severance package for Joseph Lee is ridiculous. I show below a section of the 2004-10-07 notice from Joe Lee entitled “First 90 days yields streamlined organization, increased efficiency and collaboration”

Elimination of Severance Policy

At Mr. Lee’s recommendation, MLGW’s board of commissioners voted to rescind the utility’s severance policy. With the elimination of this policy, the utility has saved in excess of $750,000.


This severance policy was voted on by the board of MLGW on September 2, 2004. Mayor Willie Herenton and new utility president Joseph Lee had criticized this policy as too generous. The board approved the minutes of the Aug. 19 meeting at which it had voted to scuttle the policy that would have granted some executives six-figure severance packages in the event they were fired.

The policy covered all 2,700 MGLW employees and the utility had to reach agreement with the International Brotherhood of Electrical Workers Local 1288. Lee announced the union had consented to the elimination of the policy in exchange for a clause providing for advance notice and other protection for workers in the event the utility was sold.

Tuesday, May 01, 2007

May 1, 2007

ANOTHER OUTRAGE FROM THE MLGW

Help, aliens from the planet Willie have taken over the MLGW and are preparing it for bankruptcy and disposal. They are very clever and resourceful. They get caught providing free utilities to an alien commander on the planet Willie council of elders and then they hire a loud mouthpiece and get the planet workforce to pay for him. This costs more than four times the cost of the free utilities but they suck the blood in small amounts hoping that it will not be noticed. They got caught but what do they care. They expect to win the next election and things will go back to the way they want them to be and the hell with the planet workforce.

JUST HAVING A LITTLE FUN TO RELIEVE THE STEAM AT THE GALL OF THESE PEOPLE. NOTHING SURPRISES ME ANYMORE.

I picked up the morning paper and there it was. I wondered if Mr. Lee was going to pay Robert Spence out of his own pocket but should have known better. The kicker was the $24,999.99 billing cap for any one bill. That takes real gall to avoid oversight and rejection by the board of MLGW and the City Council.

I just got finished reading the Marshall report on line. This is a stinging indictment of Joe Lee that gives the lie to what he and Robert Spence have been saying that there was no active intent to give preferential treatment to Edmund Ford. Since the report is 39 pages, I took the most important parts and conclusions and put them in a 7 page file which I have attached. If you want to read the full report, it is on line at the City of Memphis and is also attached. Have your blood pressure tested before delving into this mess.

Click here to read the best parts of the guilt of Joe Lee and Edmund Ford from the investigative report

Click here to read the full 39 page report