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Wednesday, June 8, 2011

Common Cause: End favoritism, inside deals and pay-to-play at Atlanta airport

To most of us, Hartsfield-Jackson International Airport is a very large, occasionally stressful building where planes take us far, far, far away from the drudgeries of life. To some of the city's well-connected businessmen and women, however, it's a place where they can make lots of cash through vending and construction contracts. Sometimes, unfortunately, unscrupulous behavior has occurred.

Among the ethically questionable happenings over the last three decades: A video arcade operated by two former mayors' wives. A former airport commissioner and councilman who was convicted of federal bribery charges. A multi-million-dollar advertising contract that went to former Mayor Maynard Jackson's friend and which sparked a long-running (and recently settled) lawsuit.

Much of the past skulduggery, Common Cause of Georgia claims, was made possible by favoritism, pay-to-play and inside deals between vendors, politicians and bureaucrats. The good-government watchdog has called on the city to place a $250 cap on the amount airport vendors can contribute to political campaigns. Other states, including such capitals of cronyism as Illinois and New Jersey, have already passed similar measures.

The call for reform comes as airport officials prepare to select new vendors to revamp the hub's restaurants, bars and retail stores — one of its biggest deals in years. The airport deals are expected to be announced in September.

"The solution is not simply better enforcement of current law, or even merely more transparency for more transactions between officials and interested parties," Kennesaw State University Professor Kerwin Swint writes in a report released by Common Cause to coincide with the push for reform. (PDF) "Simply put, we need reforms that eliminate the temptation to award public, taxpayer-financed projects to those who have made campaign donations."

Mayor Kasim Reed today fired back with a statement asserting that campaign-contribution limits would force candidates who aren't wealthy to focus all their energy on raising cash. He also said the vendor selection process would be conducted in a "fair, honest, ethical and transparent manner" and expressed his support for Louis Miller, the current airport general manager, and Paul Brown, its concessions director.

Reed said in a statement: “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 and work at what is arguably the most successful airport in the nation. It’s time to stop resurrecting the past and instead, focus on the present and the future.”

Before we start focusing on the future, however, let's revisit the past real quick. After the jump, a snippet from Swint's paper listing previous instances of insider deals, favoritism, and even outright corruption at the world's busiest airport.

* Video arcade in the main terminal, 1980. Tollie Hartsfield, William B. Hartsfield's second wife, opened a video arcade in the airport's main terminal. One of her partners was Maynard Jackson's ex-wife, Burnella "Bunnie" Jackson Ransom. The arcade operated for about two years and went out of business. "Why those two people got that contract is a mystery, and I don't know to this day," said George A. Berry, Hartsfield's general manager from 1978 to 1983.

* Retail concessions, 1989-1994. In 1989, David Franklin bought 5 percent of W.H. Smith newsstand franchise at Hartsfield, his first business deal at the airport. It was three years after his divorce from Shirley Franklin, and it was during her tenure as Mayor Andrew Young's second-in-command. In 1989, David Franklin was a member of the Atlanta Fulton County Stadium Authority. While on the authority, he met Ed Elson, who owned newsstands at Hartsfield and Chicago's O'Hare Airport. Elson took Franklin under his wing, and when Elson sold his company to the British-owned W.H. Smith, Franklin became its local minority subcontractor. "If anyone has helped me in business, it's Elson. It's not my ex-wife," David Franklin said. David Franklin continued to own 15 retail outlets at airports around the country. The AJC said in 2008, when David Franklin died, "his work was deemed a conflict of interest by some critics when his former wife was elected mayor in 2001. At that point, he claimed 'veto power‘ in Shirley Franklin‘s administration. The mayor strongly rejected his assertion that he was an influential adviser. The two of the couple‘s children worked at David Franklin‘s concessions at the airport.

* Politicians and vendors found guilty of federal bribery charges, 1993/1994. A former Atlanta councilman and a powerful businessman at Hartsfield International Airport were convicted on bribery, conspiracy and fraud charges after a three-week trial that raised legal and political issues. A federal court jury convicted Ira Jackson, a former airport commissioner and councilman influential in overseeing the airport, on 83 counts of mail fraud, 43 counts of accepting bribes and four counts of tax evasion. The violations were part of a scheme in which Jackson illegally received more than $1 million, in addition to bribes, from an airport business to provide favorable treatment to airport businesses he regulated. Also convicted of 83 mail fraud charges and 1 conspiracy count was Dan Paradies, who operates gift shops at Hartsfield and 43 other airports around the country. The case centered on a program for encouraging minority-owned businesses at the airport. While that program has received praise for years, the charges in this case seemed to show the program as having been corrupted into a scheme to benefit white businessmen, politically connected blacks and black political leaders.

* Food concessions, Jackmont Hospitality Inc., 1994. In 1994, Maynard Jackson and his daughter, Brooke, founded Jackmont Hospitality Inc., a food service company that operated a T.G.I. Friday's at Hartsfield's Concourse B. The term "Jackmont" stands for "Jackson's Mountain." Noteworthy, Jackson‘s third term as mayor had been rocked by scandal at the Atlanta airport. Upon leaving office, Jackson became a player at the airport via Jackmont.

* Airport consultants collect fees as much as $800 million, 2002. Atlanta‘s mayor in 2002, Bill Campbell, collected $800 million in fees at the massive airport expansion. Those fees are more than twice the cost of similar fees at other national airports, including San Francisco. The Atlanta consultants including a truck hauling firm that had totaled up 29 city contracts in a decade, construction executives who gave Campbell a luxury car, and a poker buddy of the mayor who received more than $20 million from city contracts.

* Dirt-hauling contract, Ronnie Thornton, 1997-2001. In 2001, the airport was at the center of a controversy over the proposed $350 million contract to build Hartsfield's fifth runway. C.R. "Ronnie" Thornton, a Clayton County businessman, admitted in federal court Oct. 18 that he improperly raised $130,000 for campaign contributions. Thornton, a one-time city contractor and former lawman, testified that then-Mayor Bill Campbell knew about illegal contributions to his 1997 campaign. Thornton testified about his efforts to win favor from Campbell for his plan to sell earth to then-Hartsfield Airport for its fifth runway.

* Indoor advertising contract, Billy Corey, July 2010. A federal jury awarded $17.5 million in damages to an Atlanta businessman who claimed the City of Atlanta and Hartsfield-Jackson International Airport illegally steered a lucrative indoor advertising contract to a competitor with deep political connections. Businessman Billy Corey charged the city violated his rights and its own bidding rules in awarding the contract to Clear Channel and Barbara Fouch, its minority partner, whose business interests at the airport go back to 1981. "It [the contact] has been in the same hands for 30 years. That is what this fight is all about," said Corey said to the Atlanta Journal-Constitution. "After getting into this thing, I saw how corrupt [the process] was." Federal District Judge Charles Pannell Jr. sternly rejected an appeal by Atlanta officials in the Corey case. Pannell cited a "decades-long pattern‖ by the city to "shut out 'outsiders‘" from winning contracts at the airport. The judge stated there was an "evil motive" on the part of the Atlanta officials in their three decades of cronyism.

Here's a PDF copy of Swint's paper.

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