Wednesday, September 19, 2007

What if the Checks Bounce?

Apparently, the administration of our Mayor, the honorable C. Ray Nagin, averted a potential crisis last week. According to Gordon Russel of the Times-Picayune, the city almost endured a shutdown of a wireless network responsible for phone and Internet services for city agencies including fire and police, as well as the city's system of crime cameras.

The shutdown was threatened because the Nagin administration has not paid the bills.
It was averted because he has now promised to pay them. Don't bounce those checks now...

Mark St. Pierre was formerly a managing partner at Imagine Software, which is a company subcontracted by the city through another company called Benetech. Mr. St. Pierre, it seems has fallen out with former partner Greg Meffert, who became the city's technology chief.

According to the Picayune, St. Pierre, who is owed $200,000 by the city, sent out emails threatening the shutdown after learning that employees of his new firm, Veracent, were no longer welcome at City Hall. The city seemed to be making no arrangements to pay St. Pierre for his firm's services.

According to the article, Meffert, for his part, has been claiming ownership of a yacht purchased by Imagine Software, the company Meffert left to become an employee of the city.

This is taken directly from the Times-Picayune:

"During his four-year tenure with the city, Meffert privatized most of City Hall's technology operations, doling out most of the work to Imagine, whose four principals were all his former employees from the private sector. Imagine always worked under subcontracts to larger firms..."

"...Thanks to an executive order signed by Nagin in 2004, when it comes to technology services, the city does not have to follow its own procurement rules and seek competitive proposals as long as it does business with a company that has prenegotiated rates with the federal General Services Administration..."

So essentially, Nagin hired a guy directly from the private sector and allowed him to steer a large percentage of city technology contracts to his former associates. Then Nagin made it easier for him to do so by exempting Meffert from the obligation of a competitive bidding process. This allowed Meffert to continue hand out city technology operation contracts to companies known to subcontract to his former partners.

Am I getting this right?

The situation since Meffert left the city post is even more confusing. The next chief technology officer, Mark Kurt, was also a former Imagine partner. He left the job after issuing a directive that the city would no longer continue using subcontractors and went to work for Ciber Inc., which subcontracted out to Imagine Software and Veracent. Ciber Inc., decided to discontinue work with the city, due to unpaid bills. Its work was picked up by Benetech, who has also been forced out the door, along with its subcontractors, including Mark St. Pierre's Veracent.

Got all that?

I'm not sure I do.

To me, the whole episode merely gives us a taste of how the city tends to do business. Of course we all know about bureaucratic woes, but these non-payments to Ciber Inc. and Veracent seem more purposive than an excuse related to somebody losing the paperwork. It also illustrates a series of troubling marriages and divorces between Nagin, his allies and appointees, and the private sector, particularly in the technology office.

Just check this out from way back in last March:

Along with a campaign war chest of nearly $260,000, lame duck Mayor Ray Nagin is keeping his political action committee locked and loaded.

A finance report filed with the state last month shows that CHANGE Inc. raised $61,000 in 2006. The PAC, run by two of Nagin's closest advisers, spent more than $40,000 and ended the year with a balance of more than $20,000.

Though he says he's not running for anything, Nagin took in 192 contributions totaling more than $410,000 after he defeated Lt. Gov. Mitch Landrieu in last spring's mayoral runoff. CHANGE received just nine contributions and all the money rolled in right before the May 20 election, according to the filing.

Nearly half the cash came from two computer firms with ties to Nagin's former chief technology officer, Greg Meffert. Ciber Inc. of Greenwood Village, Colo., wrote a check for $25,000, the records show, while NetMethods LLC of New Orleans chipped in $10,000.

CHANGE also received a $5,000 check from Joe Marchizza, a regional vice president at Ciber based in Illinois.

Unlike candidates for elected office, whose campaign contributions are capped by law, PACs can accept unlimited sums of money.

Ciber has since 2004 been the prime contractor overseeing Imagine Software LLC, a company set up by a group of former Meffert subordinates from the private sector that has essentially run the Mayor's Office of Technology since 2002.

NetMethods was formed by former Imagine managing partner Mark St. Pierre in 2004. Among other jobs, the company last year installed a network of security cameras in Baton Rouge.

Others in the same circle gave $42,625 to Nagin's campaign directly. The biggest donations came from Imagine itself, which gave $7,500, and from St. Pierre, who gave $10,000, half of it through a second corporation he owns, Veracent LLC.

Can anyone help me make sense of what is going on here? What is the current relationship between Meffert and Nagin?

These types of incestuous political deals and breakups are nearly impossible to pin down. I had to read the article in today's Times-Picayune several times and I'm still not sure I have all the connections down. The New Orleans political web, when the private sector ties are added, turns into a series of spider's traps occupying the same place. So thick and jumbled, it ceases to be transparent. We catch no flies.

What from this particular instance needs follow-up?

In general, how can we, as citizens, document these types of relationships more effectively?


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