Mayor LaToya Cantrell’s controversial “smart cities” project fell apart in April as the New Orleans City Council ramped up its investigation into contract-fixing allegations. In the aftermath, the Cantrell administration blamed the “contentious atmosphere” created by the council, and continued to claim that the bid-rigging allegations were completely unfounded.
However, new documents show that one week before the project collapsed, the city’s Chief Procurement Officer Julien Meyer wrote a letter to the city’s preferred contractors saying that city had received new information that “raises doubt about the validity” of their proposal and warrants a reconsideration of the city’s stance on the bid-rigging allegations.
The city’s chosen contractor — the Smart+Connected NOLA business consortium — announced they would drop out of the project in a direct response to Meyer’s letter.
The letter raises some of the very same concerns that are central to the council investigation — that a “pro bono consultant” that helped the Cantrell administration launch the overall smart cities project, called Ignite Cities, had a financial stake in steering the contract towards its business partners in Smart+Connected NOLA.
Meyer’s April 21 letter, which was also sent to Cantrell’s chief of staff, only asked one question: “Do you confirm that Ignite Cities has a business relationship with any member of Smart+Connected NOLA?”
Instead of answering the question, the consortium replied to the email on April 25 by announcing it was dropping out of the project.
Cantrell continues to dismiss allegations despite new information
In the wake of the consortium’s announcement, and despite the new evidence, the Cantrell administration continued to dismiss the allegations and the council’s investigation.
A Cantrell spokesperson told The Times-Picayune that “We are deeply disappointed by SCNOLA’s decision to withdraw from consideration. Given the contentious atmosphere that’s been created around the issue, it’s hardly a surprise. This is a loss for kids that deserved better of us as their city’s leaders.”
On April 26, Cantrell issued an open letter to the council calling the investigation a “spectacle,” and that the “disturbing rhetoric” was meant to “attack” and “obstruct my administration.”
On April 27, a Cantrell administration official that played a prominent role in developing the smart cities project — Director of the Mayor’s Office of Utilities Jonathan Rhodes — appeared before the council to answer questions under oath in response to a council subpoena. Rhodes became central to the investigation after it was revealed that he had co-founded a side business with another city employee, and that the company had worked alongside many members of the Smart+Connected NOLA consortium on a separate project in Los Angeles.
Rhodes, while under oath, told the council that the idea that Ignite Cities had a conflict of interest in advising the city due its business relationship with prospective bidders were “unwarranted allegations.” Rhodes was copied on Meyer’s April 21 email, which explained that the procurement office had new evidence that supported those allegations.
Rhodes and other Cantrell administration officials never mentioned, despite numerous inquiries from council members and the media, that it had new evidence of a financial relationship between Ignite Cities and Smart+ConnectedNOLA. In fact, it fought to keep some of that evidence out of public view.
Meyer’s letter was released late last week as a result of subpoenas the City Council has issued to five Cantrell administration officials as part of its smart cities investigation. This month, the administration sued the council in an attempt to block one out of five of those subpoenas, issued to Cantrell’s Chief of Staff Clifton Davis. Davis was copied on Meyer’s April 21 letter.
When an Orleans Parish judge ruled in the council’s favor last week, the administration announced its intention to appeal the decision. But then, in a somewhat surprising move, the Cantrell administration released the documents to the council on Friday evening. They were first published by WGNO.
Meyer’s April 21 letter was contained in the response to the Davis subpoena — the one subpoena the administration has tried to block in court. Although Rhodes was also copied on the Meyer email, it wasn’t included in his subpoena response. Rhodes’ subpoena was issued nearly a month earlier than the other four subpoenas, and the original due date on that subpoena was three days before Meyer sent his email.
The Cantrell administration didn’t respond to requests for comment. Neither did Ignite Cities nor the member companies of the Smart+Connected NOLA consortium.
‘On information and belief, IGNITE has no economic interest’
The city has known about the contract-rigging allegations for nearly a year.
About a month after the city selected Smart+Connected NOLA as the highest rated bidder for the project, a rival bidder — Cox Communications — submitted a formal protest saying the public procurement process had been corrupted. The protest alleged that the city had conspired with Ignite Cities to steer the procurement process to a preselected winner.
The allegations centered on Ignite Cities role as a pro bono consultant for the city that helped develop and shape the smart cities project and public bid. Emails included in the protest showed that Rhodes asked Ignite Cities for its input on a draft version on one of the public bid documents, and that he sent Ignite Cities a final version of the documents nearly three weeks before it was officially released to the public.
Since then, more emails released through the council’s investigation have revealed that Ignite Cities had an extensive relationship with city officials and played a consistent role in the development of the project. And they indicate that the company was primarily working on behalf of its business partners, rather than acting as an impartial consultant to the city.
The Cox protest questioned the propriety of that relationship. It pointed to prior press releases in which Ignite Cities announced a formal partnership with the consortium’s two leading members — wireless giant Qualcomm and investment firm JLC Infrastructure.
According to a 2020 Qualcomm press release announcing the partnership, the three companies intended to work together to develop “smart and connected” technology for businesses and local governments. Qualcomm would act as the technology partner and JLC would provide the capital. Ignite Cities would “provide its expertise in building municipal partnerships and successfully resolving complex city issues.”
Cox argued that this is precisely what happened in New Orleans.
“This perhaps explains why IGNITE offers to assist Cities on a ‘pro bono’ basis. Its purpose, of course, is to make the collaboration a ‘commercial success’ by affording its partners a competitive advantage in gaining government contracts.”
The city dismissed Cox’s claims in December for two primary reasons. First, officials said that Ignite Cities didn’t have a contract with the city, meaning there couldn’t be an official conflict of interest. Second, they said that the city wasn’t aware of any financial interest that Ignite Cities had in the Smart+Connected NOLA consortium.
“On information and belief, IGNITE has no economic interest in the RFP,” said a response prepared by Rhodes.
Both those claims, however, seem to be contradicted in the new documents from the Davis subpoena. First, it turns out that contrary to repeated assertions from the city, Cantrell actually did sign a contract with Ignite Cities. Councilwoman Helena Moreno had previously revealed that there was a draft memorandum of understanding, or MOU, for Ignite Cities to become a city consultant on smart cities projects.
But as The Times-Picayune reported last week, the Davis emails revealed that Cantrell actually signed the MOU. The city did not explain to the paper why it had previously denied the existence of a contract.
The city’s other justification — that it wasn’t aware of any financial interest Ignite Cities had in the project — was questionable from the start. The consultant’s business partnerships with JLC and Qualcomm were publicized online. Ignite Cities even directly emailed the city a letter in 2019 describing the new partnership with JLC. And the city has never been able to fully explain why Ignite Cities, a for profit business, was doing so much work for free on a project it had no financial stake in.
But in Meyer’s April letter, he said that the city had become more skeptical of the situation based on “information received by City representatives on Monday April 18, 2022, during a meeting with representatives of Smart+Connected NOLA.”
It doesn’t say what the information is, and the city did not respond to The Lens’ questions. But Meyer wrote that it was enough to “warrant” a new look at Cox protest and the information that Smart+Connected NOLA provided to the city.
The letter says the new information “raises doubt about the validity of the proposal submitted by Smart+Connected NOLA.” Along with the letter, Meyer sent an affidavit submitted by the consortium saying they had no conflict of interest in submitting their proposal. Meyer also sent and highlighted the “non-solicitation” provision of the original public bid document, which prohibits prospective bidders from paying a company to help them secure the public contract.
But despite the new information, the Cantrell administration has continued to write off the allegations as completely unwarranted political attacks.
The council’s investigation is still ongoing, as is a separate investigation from the New Orleans Office of Inspector General, which seized computers and electronics from several administration officials last month.