Saturday, January 23, 2010

Huge airport bond deal to be rebid in wake of controversy

Posted By on Sat, Jan 23, 2010 at 1:57 AM

click to enlarge Martin investigation is ongoing
  • Martin investigation is ongoing

Mayor Kasim Reed spent most of this week meeting with bureaucrats in Washington, but he returned today to take decisive action regarding a billion-dollar bond deal that had begun to emit a strong odor around City Hall.

You may recall from our article in late December that a financing package worth $1.2 billion and seen as critical to the future of Hartsfield-Jackson Airport was being held up in part because of an internal investigation into some suspicious goings-on.

Specifically, Councilman C.T. Martin had been aggressively lobbying city finance officers to get a certain minority bonding firm, San Francisco-based Grigsby & Associates, a larger share of the underwriting duties. Then-Council President Lisa Borders described Martin's actions as "grossly inappropriate.”

Also, packages were sent anonymously to Council members' homes containing a letter purportedly written by the city contract compliance officer that advocated on behalf of Grigsby. The investigation came about when the officer allegedly denied having sent the letter.

Which brings us to today. With the Grigsby investigation apparently still weeks away from completion, the Reed administration has moved to scrap the proposed bond team, which now includes Grigsby, and start over from scratch by sending out a formal request for proposal.

A memo sent to Council members this afternoon by interim finance chief Roosevelt Council (how's that for a name?) explains that re-bidding the bond deal will allow the city to "show transparency and avoid any hint of controversy."

It'll do one other thing: allow the delayed bond project to move forward. The city would never have let the bond deal go ahead as-is while one of the underwriters was still under investigation — but the airport needed the money ASAP.

Re-bidding the deal will give the city the opportunity to push the highly litigious Grigsby to the sidelines while providing City Hall with the best legal cover that circumstances allow.

The memo adds that the finance department will announce the new underwriting team on Feb. 12.

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