Mayor LaToya Cantrell’s administration provided the New Orleans City Council with hundreds of pages of documents on Monday in response to a recent council subpoena related to a controversial, multimillion-dollar “smart cities” project that aims to create a privately owned, but “city-directed” WiFi service to compete with existing providers like Cox Communications, while installing thousands of “smart cities” devices to ramp up data collection, improve city services and raise revenue.
The council sent the subpoena last week after what Council President Helena Moreno said was a lack of answers on the scope of the project, its costs and the involvement of a Chicago consulting firm that has been central to concerns about potential contract-rigging.
“I’ve hated to get to this point, but the lack of transparency and red flags around this proposal forced this course of action,” Council President Moreno said in a Monday press release.
The documents show that the city was communicating with members of Smart+Connected NOLA, the business consortium that would go on to win the public bid, months before the bid was released last year. And they show how the “pro-bono” consultant that helped write the bid solicitation — called a request for proposals, or RFP — was pitching Smart+Connected NOLA-member firms to the city as early as 2020.
They also provide the first look at a one-year draft contract the city is negotiating with Smart+Connected NOLA.
The documents released on Monday are only part of what the subpoena requires. It also directs the director of the Mayor’s Office of Utilities, Jonathan Rhodes, to appear before the council on April 27 and answer questions about the project under oath.
“I sent this subpoena on behalf of myself and other council members who feel that we have been purposely kept in the dark and haven’t received truthful dialogue around the smart cities/public WiFi proposal,” Moreno told The Lens last week.
The subpoena specifically demanded documents related to the Chicago-based consultant, Ignite Cities.
“We cannot deny that there is concern about the potential of contract-rigging in this case,” Moreno said in the press release.
Moreno had previously told The Lens she believed there were “potential ethics problems” with the public bid process that awarded the project to Smart+Connected NOLA, a group led by wireless giant Qualcomm and JLC Infrastructure, an investment firm co-founded by NBA legend Earvin “Magic” Johnson and Chicago investment banker Jim Reynolds, Jr.
In the press release, Councilman JP Morrell also said the open bid process had “obvious procedural defects.”
‘Do we want to put Ignite and JLC logos on this?’
A rival for the project, Cox Communications, submitted a formal protest over the city’s selection of Smart+Connected NOLA as the highest-rated bidder, which began the process of negotiating a contract with the group.
Cox accused the city and Ignite Cities of conspiring to direct the project to a pre-selected contractor. The city dismissed the protest last year, and Cox has not yet appealed that decision in Civil District Court.
Cox’s objections to the process centered on Ignite Cities’ prominent role in developing the smart cities project, and even writing part of it. According to the city, Ignite Cities was working as a “pro-bono” consultant, wasn’t an official member of Smart+Connected NOLA and didn’t have any financial stake in the project.
The city never explained, however, why Ignite, a for-profit firm, would provide its consulting services for free.
But existing evidence, along with new information in the subpoenaed documents, suggest that Ignite Cities does have a financial stake in the project. And hundreds of pages of emails from Rhodes’ inbox show that the firm worked to get Smart+Connected NOLA members in front of city officials, including the mayor.
Emails between Rhodes and Ignite Cities founder George Burciaga show that Burciaga was setting up meetings between the city, JLC and Qualcomm as early as September 2020 to discuss a potential smart cities plan. For example, meeting notes — written by Burciaga — from a Sept. 2020 meeting with Ignite Cities, JLC and city officials says that “all parties are in agreement and will work together to develop a final proposal/offering.”
The Lens attempted to reach Burciaga on the cell phone number listed in the emails. He did not pick up and did not immediately respond to a voicemail requesting comment.
On Sept. 29, Rhodes emailed Burciaga about another project, then ended the email by asking him to help keep “momentum going on public WiFi with Qualcomm and partners.”
Later in the year, Rhodes and Burciaga began preparing for a major presentation in front of Cantrell. In December, Rhodes requested email addresses for people who wanted to attend the Jan. 5 presentation. Burciaga provided a list that included Qualcomm and JLC employees.
On the day of the meeting, Burciaga shared a copy of the presentation with Rhodes.
“Do we want to put Ignite and JLC logos on this? Or otherwise highlight the partnership?” Rhodes wrote, then thanked Burciaga for everything he had done.
A timeline provided by the city shows that officials began working on a draft smart cities RFP that month. On Jan. 7, Burciaga wrote to Rhodes again:
“Great meeting on Tuesday. Per next steps, can we meet at 4pm central on Monday to review procurement requirements and related topics. The balance of the team is working on a draft scope to present to you. Once it’s complete, we will review and adjust it as a team.”
The documents also show that Ignite Cities continued to stay involved in the project after it was awarded to Smart+Connected NOLA. Burciaga was included on the email Rhodes sent to the Smart+Connected NOLA team congratulating them on their winning proposal. And meeting notes show Burciaga was involved in a smart cities project progress meeting as recently as April 7.
In addition to the partnership Ignite has with Qualcomm and JLC, it is also connected to another Smart+Connected NOLA partner, recent reporting from Illinois TV station WCIA revealed. The story — about how another top Ignite Cities executive used his wife’s position as City Clerk of Chicago to move projects forward, both in Chicago and New Orleans, on behalf of clients — also showed that the executive, Reyahd Kazmi, is a lobbyist for IKE Smart City. That company is also official member of Smart+Connected NOLA.
Emails show that Ignite Cities was trying to pitch the city on installing 30 IKE-brand kiosks as early as May 2020, before the broader smart cities project came together. That full smart cities proposal came nearly a year later, and also included exactly 30 IKE-brank kiosks.
Moreno said the missing details became even more glaring as the Cantrell administration began pressuring the council to get on board with the plan. Last month, Cantrell held several events with NBA superstar Magic Johnson — who’s investment firm JLC Infrastructure is involved in the project — to sell the project as “WiFi for All” and encourage the council to support it.
“There’s no magic without the City Council,” Johnson said during a press conference in New Orleans last month.
The reason Cantrell needed the council’s support is because she’s seeking to sign a multi-year contract Smart+Connected NOLA. And all multi-year contracts need to be approved by the council.
But last week, the Cantrell administration confirmed that it was trying to kickstart the project with a one-year agreement, which does not require council approval, as the city works to negotiate a long-term agreement that’s palatable to the City Council. Moreno called it an attempt to “circumvent the council,” although the Cantrell administration denied that.
The day after Moreno sent her subpoena, the subject of the subpoena — Jonathan Rhodes, director of the Mayor’s Office of Utilities — sent a four-page letter to the council giving some additional details on the plan. But although the letter represented the most information the public has received since Smart+Connected NOLA submitted their proposal roughly a year ago, it still fell short of satisfying Moreno’s questions, or clearly laying out what the ultimate form and cost of the project will be.
It did, however, shed some light on what the city imagines will happen at least during the initial one-year agreement. The main task in that first year is installing new WiFi equipment at 10 NORD recreation centers for $3 million. The equipment will cost $300,000 a year to maintain. That will give the city a chance to test out the new infrastructure that the consortium plans to use on its city-wide broadband network.
The draft agreement, included in the documents the city provided on Monday, outlines the consortium’s responsibilities during the one-year pilot, mostly producing a “technology demonstration program” and participating in community outreach. The one-year agreement will not cost the city anything, according to the draft. But Smart+Connected NOLA will also work to negotiate a longer-term, multiyear contract, the draft says.
Clarification: As originally published, this article at one point referred to Smart+Connected NOLA being “awarded the contract” for the smart cities project. The consortium was in fact the highest-rated bidder by a city selection committee in summer 2021, which began the process of contract negotiation. However, a contract has yet to be finalized.