MBCIA demands $1.9 million payment for Whitby projects
MACON, Georgia (41NBC/WMGT) – Documents obtained in an open records request show that the Macon-Bibb County Industrial Authority (MBCIA) is demanding nearly $2 million from three construction companies. The industrial authority claims it paid the companies more than it was supposed to for certain jobs since 2015.
Lester Miller, a local attorney, stated in a news release that he obtained documents from the MBCIA in an open records request.
“I want to thank the current leadership at the Industrial Authority for their prompt and thorough response to my open records request,” said Miller. “At a time when our local government is cash-strapped, I was, frankly, shocked to learn that approximately $2 million in tax revenue was allegedly paid for work that was never done and, in some instances, on property that did not exist. It is my understanding that an investigation is underway. Without a doubt, those responsible should be held fully accountable.”
The news release was attached with the documents he requested. There are three separate letters from the MBCIA to W M Construction (WMC), Armstead Management LLC (Armstead) and New Age Concept and Consulting LLC.
A 2017 audit from the MBCIA shows that former Chairman of the MBCIA Board, Cliffard Whitby, violated a code of ethics while in office. Auditors found that Whitby’s brother-in-law is an officer of Armstead and that Whitby’s daughter is an officer of New Age Concepts and Consulting, LLC. During Whitby’s time in office, the MBCIA paid Armstead $1,477,404 and New Age $1,195,947.
W M Construction/ Armstead Management LLC
In one letter sent out April 2, 2018, MBCIA requests $1,107,218.00 for work that WMC and Armstead “never performed or completed” in 2015 through 2017.
MBCIA states that it hired Warren Associates, Inc. to go back to the sites those two companies were paid in full to work on.
The MBCIA is requesting $1,002,600 reimbursement for 9 different projects from October 29, 2015 through March 22, 2017 at Allied Industrial Park that were invoiced and never performed.
Also requested, is $36,585 for work at 400 Poplar that was invoiced on January 9, 2017 by Armstead, but never performed.
The last request in the letter is for a $68,033 reimbursement for work at the Air National Guard Building on July 19, 2017 and August 3, 2017, which was never done.
That letter gives Armstead and WMC 10 days for reimbursement. The 10 days are up on April 12, 2018.
New Age Concept and Consulting LLC/ W M Constructions
A second letter from the MBCIA also dated April 2, 2018 demands $771,681 from WMC and New Age Concept and Consulting LLC for work that was “never performed or completed”. Warren Associates, Inc. was also hired to investigate these projects.
The letter states $239,180 was invoiced in full from May 16, 2016 through May 11, 2017 for work at Allied Industrial Park that was never performed.
The MBCIA also calls out both agencies for work at Airport North and Industrial Highway Properties. MBCIA is demanding $504, 851 for invoices from February 2, 2015 through October 10, 2016. The letter states that there is no way some of the work claimed could have been done since the industrial authority had not yet owned some of that acreage. The investigation also shows that some of the work New Age and WMC allegedly did, was previously done by another contractor hired and paid by the authority.
An invoice for 400 Poplar Street from New Age was also submitted and paid for, the document shows. The MBCIA is requesting $27,650 for the work that was paid and never done.
Both New Age and WMC had 10 days to reimburse the industrial authority, which are up April 12, 2018.
Duplicate Check from WMC/ Armstead
The last document attached in Miller’s open records requests is a letter from the MBCIA from December 14, 2017. The industrial authority is demanding $76, 850 from both WMC and Armstead for receiving the same payment twice for the same job. This was also mentioned in the 2017 audit.
Whitby History with the MBCIA
Cliffard Whitby was the MBCIA Chairman at the time of these projects. Whitby was indicted by a federal grand jury in August of 2017 for bribery and money laundering. The indictment showed that Whitby bribed former Bibb County School Superintendent Romain Dallemand with $400,000 over the course of six years. Whitby resigned from the MBCIA the day after he was indicted.
Full Macon-Bibb Industrial Authorituy Statement
The Macon-Bibb County Industrial Authority (MBCIA) is awaiting response from letters sent to three (3) contractors demanding reimbursement of funds that were improperly paid to them for work not done or done unsatisfactorily. The Authority distributed these demand letters to the contractors in question on April 2, providing 10 working days for an adequate response.
The issue of potentially improper distribution of Authority funds to these contractors came to the attention of the MBCIA Board last August, following the resignation of former Board Chairman and Executive Director Cliffard Whitby shortly after his indictment of bribery charges related to his dealings with the Bibb County Board of Education.
Immediately following the former Chairman’s resignation and during a transition of MBCIA leadership and further review, the Authority discovered documents reflecting apparent invoicing irregularities with these contractors.
The Authority immediately contacted its outside auditors and requested a review of such documents and files, which included contracts and records of payments to these contractors. The auditor’s review identified billing irregularities in connection with payments to several contractors who had been paid to perform construction, renovation and demolition work at various properties owned by the Authority.
These contractors had been identified through an RFP process conducted in conjunction with the Office of Small Business Affairs in 2015. The goal of the work to be done under the RFPs was to accomplish needed repairs, demolitions and rehabilitations to Authority properties hopefully utilizing local and minority vendors. The contractors in question were paid from the Authority’s own funds for internal projects unrelated to any economic development projects with private industries or prospects.
The auditor’s review revealed these same contractors appeared to be owned by persons related to the former Chairman. At the recommendation of the auditors, in order to evaluate the work performed in connection with these projects, and to determine if the payments to these contractors were fair and equitable, the Authority retained a respected construction firm to forensically inspect the work for which the Authority had received from and paid invoices to these contractors. The forensic investigation was completed in March 2018, and it also returned evidence of further irregularities in the invoices and payments.
The results of the forensic investigation were presented to the MBCIA Board and Staff on April 2, 2018, at which time the Authority issued letters to these contractors demanding a response and reimbursement, within 10 working days, for monies paid for the projects that were not completed and/or from invoices that were deemed invalid by the Authority and its investigative team. The Authority is awaiting a complete response from the contractors, with an expectation for eventual reimbursement, by April 18, 2018.
Based on the concerns identified in the auditor’s review and the forensic contracting investigation, all of this information has been provided to federal and state law enforcement for further investigation. The Authority has and intends to continue to cooperate fully with federal and state authorities. The MBCIA has taken proactive steps to protect and prevent similar events from occurring again and is in sound financial position.
“This has been an ongoing process since the departure of the former Chairman, and we will continue to thoroughly evaluate information and evidence as it becomes available,” says Robert E. Fountain, Jr., Chairman of the MBCIA. “All the while, we will continue to carry out the mission of this Authority to grow the tax base and facilitate quality job growth in Macon-Bibb County.