After ‘smart cities’ debacle, council approves package of anti-corruption laws
22nd January 2024 · 0 Comments
By Katie Jane Ferneliux
Contributing Writer
(Veritenews.org) – The New Orleans City Council on Thursday (Jan. 18) approved three new city laws intended to strengthen anti-corruption safeguards in city contracting. The ordinances, sponsored by Councilmember Helena Moreno, are a direct response to a series of allegations of bid-rigging and insider dealing related to Mayor LaToya Cantrell’s failed “smart cities” initiative, which was recently the subject of a scathing report by the city’s Office of Inspector General.
The ordinances will require city contractors to cooperate with city investigations, clarify the information that should be included in top officials’ financial disclosure forms and require the city to enter all contracts into its central purchasing database.
“This package has several ordinances that aim to prevent fraud, waste, and corruption in city contracting,” Moreno said last Thursday. “The safeguards are critical after, as I mentioned, the Inspector General confirmed potential violations by city employees regarding the procurement of the smart cities project.”
The smart cities initiative, which was announced in 2021, aimed to create a “city-directed” internet service provider and to outfit or replace existing city infrastructure with data-collecting “smart” devices. It failed in 2022 when the business group that the city selected to run the program – Smart+Connected NOLA – dropped out after reporting by The Lens and The Times-Picayune led the City Council to open a formal investigation into the smart cities procurement process.
The Office of Inspector General’s November report confirmed much of that earlier reporting. It focused on two city employees involved in the smart cities initiative – then-Director of the Mayor’s Office of Utilities Jonathan Rhodes and IT staffer Christopher Wolff – and Ignite Cities (now Elevate Cities), an outside consulting firm that was working with the city to shepherd the deal through.
The watchdog agency found evidence that Rhodes and Wolff had pre-existing relationships with Smart+Connected NOLA, through their side business Verge Internet, even as they were working on the smart cities contract. Further, Rhodes provided potentially valuable information about the smart cities contracting process to Ignite Cities CEO George Burciaga, who also had a pre-existing partnership with some of the Smart+Connected NOLA principals, before the city publicly put the project out to bid.
Rhodes and Wolff failed to disclose their ties to the companies or even the existence of Verge Internet to the city, which, the Office of Inspector General found, may have violated city and state laws, including criminal laws.
The investigation did not uncover any evidence that Rhodes and Wolff received kickbacks related to their work on the deal. And both have previously denied any wrongdoing, saying they weren’t required to disclose their side business dealings because Verge Internet never made any money.
The Office of Inspector General also raised questions about the city’s partnership with Ignite and Burciaga. Officials in the Cantrell administration initially characterized the relationship as informal, saying the company was providing “pro bono” services and that there was no written contract between Ignite and the city. No contract had been entered into the city’s purchasing database.
It was only after the council subpoenaed Cantrell’s top aides as part of its investigation that a signed 2019 memorandum of understanding, signed by Cantrell and Burciaga, was uncovered.
Taken together, the ordinances approved Thursday attempt to address some of the major problems identified in the November IG report.
One of the major missing elements in the report was Burciaga, who failed to respond to repeated inquiries from the Office of Inspector General. One of the ordinances passed on Thursday will require all parties to city contracts — including memoranda of understanding — to respond to such inquiries, including by providing any records the Office of Inspector General requests.
A second will require the city to upload any and all contracts, even those for pro bono work, to BRASS, the city’s software for procurement and finance. And a third will require city employees to disclose their affiliations with both nonprofit and for-profit entities, even those that make no money.
The ordinances will now be delivered to the Mayor’s Office for final approval.
This article originally published in the January 22, 2024 print edition of The Louisiana Weekly newspaper.
