New Orleans’ “smart cities” project has fallen apart in recent months, after allegations of contract-fixing and self-dealing prompted a formal City Council investigation and the seizure of at least one city official’s computer by the New Orleans Office of Inspector General.
The selected contractors have dropped out, and it is effectively dead in the water.
But there is a second, related $3 million city WiFi project that hasn’t yet been shelved. And records obtained by The Lens show that it’s embroiled in many of the same conflicts of interest that sank the larger smart cities project.
Once again, it appears that two city officials helped develop a city project that would benefit a preselected company, Cambium Networks. Cambium previously worked with Verge Internet, a side business co-founded by those two city employees. Cambium has also worked with some of the companies behind Smart+Connected NOLA consortium — the winning bidder on the now-abandoned smart cities project.
“We keep peeling back an onion and there’s more layers,” Councilman Joe Giarrusso told The Lens last week after reviewing some of the documents obtained by The Lens. “I want to reserve my judgment until all the layers are peeled back. This is another piece of the puzzle that we’re finding.”
The project would provide a new WiFi service at 10 recreation centers for $3 million, plus $300,000 a year to maintain the new equipment after that.
When the city put the project out to bid in November 2021, it didn’t seek just any brand of WiFi equipment. The invitation to bid was specifically to find a distributor of equipment made by Cambium Networks. The winning bidder was the only company that responded — a Texas-based Cambium “elite reseller” called Frontera Consulting.
The city hasn’t provided a complete explanation for why they decided to go with Cambium, rather than one of several competing companies that make similar products.
Emails and statements obtained by The Lens show that the city was in discussions with both Cambium and Frontera as early as January 2021. Notes from weekly “public WiFi” meetings show that the two companies did design work for the project, and that the city attempted to negotiate a contract with them in February, months before the public bid was released.
Emails also show that the two city employees behind Verge Internet — IT staffer Chris Wolff and director of the Mayor’s Office of Utilities Jonathan Rhodes — were both involved in developing the project and public bid.
Cambium has ties to the two companies that led the Smart+Connected NOLA consortium: wireless giant Qualcomm and investment firm JLC infrastructure. Several of Cambium’s products are powered by chips manufactured by Qualcomm. And in 2020, Cambium became a formal member of Qualcomm’s “smart cities accelerator,”
Recently, The Times-Picayune reported that Qualcomm had submitted a proposal for a city project in Los Angeles in 2021 that listed both Verge Internet and JLC as part of the “team.” And the metadata suggested that Wolff wrote the document himself, the newspaper reported.
Cambium is also listed as a team member on Qualcomm’s Los Angeles proposal.
“After reviewing all the documents it’s obvious that we have a significant problem with conflicts and disclosures, or lack thereof,” Councilman JP Morrell told The Lens in a statement. “This investigation is ongoing.”
The city has not provided a clear explanation as to why it chose to solicit Cambium equipment specifically, rather than WiFi equipment in general.
The city also didn’t fully address questions from The Lens about how it justified negotiating with Cambium and Frontera months before the public bid was released, even though state law requires a public bidding process for a project of this size.
In an initial statement, a spokeswoman for Mayor LaToya Cantrell’s office told The Lens that the city chose Cambium because it already had a contract with the state of Louisiana.
“Cambium has already been procured as an approved technology vendor by the state,” city spokeswoman Melissa Newell said. “As such, Cambium is available as a vendor for the City of New Orleans to use which is why the City chose to work with them.”
However, there is no state contract with Cambium. Nor is it a state-approved vendor, according to the Louisiana Office of State Procurement.
When The Lens pointed that out, Newell acknowledged there was no state contract. The confusion, she explained, was that Cambium had been selected by a state-approved national government purchasing cooperative. That, Newell said, would allow the state’s Office of Procurement to review and officially adopt the Cambium contract, which would allow local government bodies to purchase Cambium equipment without going through a public bid process.
But the Office of State Procurement never adopted the cooperative’s Cambium contract. Meaning the city’s original explanation — that it chose Cambium for the ease of using an existing state contract — doesn’t add up.
Even if Cambium did have a state contract, the city’s explanation would still be questionable. That’s because one of Cambium’s main competitors, Cisco, actually does have an active contract with the state of Louisiana. Cisco sells equipment that provides the same type of broadband service described in the Cambium project.
The city did not offer any further explanation for why it chose Cambium.
In a statement, Cambium’s Chief Marketing Officer Mary Peterson said that “as a result of existing deployments in the City of New Orleans, we were invited to do design work for a small number of Proof of Concept projects.”
A Cambium spokesperson declined to clarify who exactly invited Cambium, and whether it involved either Qualcomm or Ignite Cities — a “pro bono” consultant and Qualcomm business partner that worked with the city on the smart cities bid. They also declined to explain whether the “proof of concept projects” were related to the public bid for Cambium equipment, or what “existing deployments” they were referring to.
As for Frontera, Newell said the company was introduced to the city through an official with the city of McAllen, Texas, where Frontera recently completed a similar WiFi project. She did not respond to questions about whether these early negotiations with a future bidder were consistent with state public bid laws.
The co-founder of Frontera, Drew Lentz, told The Lens he was brought on board by Cambium.
“They said, ‘hey we want to be able to put our best foot forward, would you guys be interested in being the contractor who does this?’ And we said absolutely. It’s what we do, it’s our business.”
Lentz said that his firm followed every law, ethics rule and procurement protocol that was required, and that it puts significant effort into avoiding even the appearance of impropriety. He said he couldn’t directly speak for everyone else, but said, “I really can’t imagine there’s anything nefarious.” But he said he would continue to watch the developments in New Orleans and hope for the best.
“Man, I really hope that there isn’t anyone doing anything bad or negative. Because that’s so bad, not just for this project, but for the city overall,” Lentz said. “I would hate to think there’s people out there doing things that aren’t sincerely trying to help. … To find out the people we were talking to, and who were being open and honest and genuine with us, that they may not have been, it’s pretty sad. It sucks for New Orleans more than anything else.”
The city last month sent The Lens a “digital equity timeline” that claimed the contract with Frontera was completed in March. But more recently, both the city and Frontera say it hasn’t been signed yet.
“I haven’t seen the final contract,” Lentz said. “We haven’t heard anything that says it’s not going to go forward, or conversely that it is going to go forward. So we’re in a holding pattern.”
‘Completely separate project’
In response to questions about the connections between Qualcomm, JLC and Cambium, city officials argued that the larger smart cities project and the $3 million WiFi project are “completely separate projects with completely different public solicitations.”
The two projects did have separate public bid processes. But in the past, the city has pitched them as closely connected. In one recent letter to the City Council, Rhodes clearly described them as one single project.
The city opened bids for the larger smart cities project in April 2021. Out of five responses, the city selected a proposal from Smart+Connected NOLA — a consortium of businesses led by Qualcomm and JLC infrastructure, a Chicago investment firm that counts NBA legend Earvin “Magic” Johnson among its founders.
Broadly, the consortium proposed creating a new internet service to compete with existing providers like Cox Communications, as well as a private network for city government that would allow the installation of thousands of so-called “smart” devices, like streetlights and traffic signals.
These “smart” devices are packed with cameras and other sensors to collect data, which would be used to optimize city services, bolster public safety agencies and sell to third-party companies for extra city revenue. The Lens reported last year on the privacy issues raised by the proposal, as well as the lack of basic details, like how much it would cost.
But a rival bidder on the project, Cox Communications, filed a formal protest shortly after the city picked Smart+Connected NOLA, arguing the public bid process was rigged.
Cox pointed out that Qualcomm and JLC had previously announced a formal partnership with Ignite Cities to deliver the exact type of project they were developing in New Orleans. The protest included emails showing that Ignite Cities had played a significant role in developing the public bid as a “pro bono” consultant to the city, and was even given early access to the draft bid documents before they were released to the general public.
The city dismissed the protest, arguing that because Ignite Cities wasn’t officially listed as a Smart+Connected NOLA partner and wasn’t being paid by the city, it didn’t have a financial stake.
After the City Council subpoenaed a trove of emails and other records from the Cantrell administration, some council members said the new evidence showed that Ignite Cities was clearly working to land meetings and contracts for its clients, rather than acting as a neutral adviser for the city.
Those emails also showed that Ignite was successful at connecting Qualcomm and JLC directly with the city. Ignite, Qualcomm and JLC all negotiated with city officials for nearly a year prior to the public bid. Those meetings culminated in a January 2021 presentation from Qualcomm, Ignite and JLC directly to Mayor Cantrell.
The emails show that right after the Cantrell meeting, the city began ramping up the work to write and release the smart cities RFP. And it appears that at the exact same time, the city also began accelerating the Cambium project.
Lentz, the co-founder of Frontera, said Cambium introduced him to New Orleans city officials, including Wolff, in January 2021.
The city hasn’t explained why the two projects were bid separately, even though they were closely related. In April, Rhodes wrote a letter to the City Council to explain the status of the broad smart cities public bid.
Rhodes said that although the project overall would require a multi-year contract — which requires City Council approval — the city had decided to move forward with a one-year agreement — which does not require council approval. (At that point, multiple council members had become skeptical about the proposal, and Councilwoman Helena Moreno said the one-year agreement was an attempt to “circumvent” the council’s authority.)
Rhodes’ letter to the council listed four deliverables that would be developed during the one year agreement with Smart+Connected NOLA. The first thing listed was a $3 million contract to install WiFi equipment at 10 NORD centers. It noted that the equipment would cost $300,000 a year to maintain, and that the funding for those ongoing costs would be determined in the multi-year agreement the city was still negotiating with Smart+Connected NOLA.
The city did not respond to questions about why the two aspects of the project were split into two public bid processes. It also didn’t respond to questions about whether Qualcomm or Ignite Cities had a hand in bringing Cambium on board and connecting them with the city.