Airport concession winners linked to city officials


Airport concession winners linked to city officials | ajc.com

December 25, 2011

The Atlanta Journal-Constitution
In just nine days, the Atlanta City Council will have a chance to award one of its biggest plums: the contracts to run restaurants and shops at the world’s busiest airport.


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Mayor Kasim Reed’s administration wants the City Council, at its Jan. 3 meeting, to sign off on a list of proposed winners whose contracts cover 150 storefronts throughout Hartsfield-Jackson International Airport.

“In terms of dollar amounts, the concessions of course are enormous,” said City Council member Yolanda Adrean. “We’ve got the busiest airport on planet Earth.”

A concessions contract at Hartsfield-Jackson International Airport can be a long-term cash cow. Many run for 10 years, with gross sales for the total group of concessionaires expected to hit $377 million per year.

Because the stakes are so high, concession deals at Hartsfield-Jackson have sometimes been steeped in corruption and cronyism, including a bribery scheme in the 1990s that landed two city councilmen and one concessionaire in prison, and a lawsuit over the selection of an advertising contractor that cost the city millions.

...(Mayor Kasim) Reed vowed that the process would be honest and transparent... A review by The Atlanta Journal-Constitution shows financial and political links between the mayor and major concessionaires, and also between the businesses and other city officials...

(AJC found that)

• Hojeij Branded Foods Inc. won one of five large packages of restaurant concessions. The company is controlled by Wassim Hojeij, who was a member of host committees for Reed campaign events. Hojeij, his relatives and people linked to his company contributed at least $27,000 to Reed.
• Atlanta Restaurant Partners won both as a prime contractor and as a subcontractor. The partnership is made up of Daniel Halpern, who co-chaired Reed’s campaign, and family members of former Mayor Maynard Jackson.... contributed at least $16,700 to Reed’s campaign... Halpern’s wife Sonya served on Reed’s transition team. After he became mayor, Reed named Daniel Halpern to the board of the Atlanta Housing Authority. Halpern also made campaign contributions to City Council member Lamar Willis, who sits on the transportation committee.
• An entity called HMSHost, one of the biggest winners in the competition for concessions, contributed $6,100 to Reed, although $2,000 was later refunded.
• Entrepreneur Mack Wilbourn gave at least $3,400 to Reed in contributions made personally and through his company, Mack II, which was selected by the city as a prime contractor for restaurants in the airport’s atrium and Concourse A. Because the rules allowed him to do so, Wilbourn also won restaurant spaces as a subcontractor throughout much of the rest of the airport. Wilbourn, who was acquitted of charges in a major airport corruption case in 1994, has also made campaign contributions to City Council member C.T. Martin, who chairs the transportation committee that oversees the airport.
• Paradies-Atlanta II, another longtime player in airport concessions, was recommended as concessionaire for a collection of stores on Concourse E and the new international terminal Concourse F. Company founder Dan Paradies went to prison in connection with the 1994 bribery scandal. (He retired as CEO at that time; his nephew Gregg is now chief executive.) People linked to Paradies-Atlanta donated at least $2,250 to Reed since September 2009, according to campaign finance databases, although some of that money was refunded.
• Delaware North Companies won another of the five large packages of restaurant concessions. In the first half of the year, Reed received multiple donations of $2,500 from the Jacobs family of Buffalo, N.Y., who are affiliated with Delaware North and own the Boston Bruins.
• Some significant contributors did not win contracts. Roberson & Reynolds is one example. Principal Nancy Jafari, her husband Lohrasb, and partner George Reynolds combined to give $16,800 to Reed.

The process, launched last spring and led by airport general manager Louis Miller, hit turbulence early on. The city in September decided to scrap an initial roster of proposals, saying too many of them lacked required documentation.New proposals were solicited and evaluated during the fall. Then, in the first step of the approval process, lists of winners were couriered to members of the City Council’s transportation committee around midnight on Dec. 14, less than 12 hours before they were to meet and vote — a much shorter time than normal. The packet was not on the meeting’s agenda. The rushed schedule — ostensibly to help keep the international terminal on track for its spring opening — was controversial.

...Adrean said the international terminal’s looming deadlines create a sense of urgency... Reed’s administration did not release the scores of the winning bidders to the general public. The AJC requested the documents under Georgia’s open records law, but the city’s lawyers would not provide them, and said the documents are exempt from disclosure until the council approves the legislation and Reed signs it.... Common Cause Georgia, a watchdog group, has pushed for regulations to limit political contributions by companies that compete for airport contracts. The city has no such restrictions in place. Nor do any other metro Atlanta governments...

...This summer, Reed publicly opposed pay-to-play reform, saying the city’s ethics rules for contributions were already “as strong or stronger than any major government in the state of Georgia.”