City's options limited under Banneker settlement
By: Freeman Klopott
Examiner Staff Writer
July 8, 2010
The $550,000 settlement agreement between the District and Banneker Ventures prevents the city from reclaiming millions in previous payments and makes it impossible for the District to sue the company if investigators determine the contract was obtained through fraud.
The July 1 settlement reached by D.C. Attorney General Peter Nickles and Omar Karim, a longtime friend of Mayor Adrian Fenty, ended a Banneker claim that the city owed the company $2.3 million on the parks and recreation contract. The D.C. Council expects to receive an independent investigator's conclusions on the contract next week.
Late last year, the council canceled the Banneker contract after it determined the Fenty administration had circumvented a law requiring the council to vote on contracts exceeding $1 million.
On Wednesday, D.C. Council members Mary Cheh, Harry Thomas and Phil Mendelson sent a letter to Chief Financial Officer Natwar Gandhi requesting that he not issue payments on the settlement because it's still under investigation by the council.
"It's extraordinarily irregular and questionable to settle this without first settling all of the issues against Banneker and on top of that determining first whether Banneker should be paying us," Cheh said.
The settlement requires Banneker to pay its subcontractors a total of about $285,000, allowing the company to keep $265,000 on top of the $2.5 million it already received in a controversial Christmas Eve payment.
Nickles responded to the council members' threats to cancel the payments, saying "I don't think that would be lawful." He added, "it might lead to a test in the courts and they would have a whole bunch of contracts tied up in litigation."
A. Scott Bolden, who represents Karim, echoed Nickles.
"A deal is a deal," Bolden said. "Any effort to thwart these agreements that make sense and allow projects to move forward is extremely shortsighted and will undoubtedly lead to further litigation."
http://www.washingtonexaminer.com/local/City_s-options-limited-under-Banneker-settlement-97968084.html
A letter from three City Council members to Mr. Nickles:
COUNCIL OF THE DISTRICT OF COLUMBIA
THE JOHN A. WILSON BUILDING
1350 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20004
July 6, 2010
Peter Nickles, Attorney General
Office of the Attorney General
1350 Pennsylvania Avenue, N.W., Suite 409 Washington, D.C. 20001
Dear Mr. Nickles:
We write out of concern regarding your recent decision to pay a reported $550,000 in settlement of a claim from Banneker Ventures. Your decision to settle at this particular time appears to be poor judgment and motivated by something other than the best interests of the District of Columbia.
As you are aware, the contract for work performed by this vendor was never submitted to, and thus never approved by, the Council. More importantly, a Special Committee of the Council is conducting an investigation into the contracting process, with conclusion of the investigation expected soon. Among the allegations is that Banneker or its subcontractors overcharged the District and failed to supervise properly the work done. The decision to pay this vendor prior to the conclusion of an investigation, prior to all the facts being known, for contracts that were not properly approved, and for work that may have been overcharged, is contrary to your duty to place the interests of the District of Columbia paramount to all else.
The contracting controversy has been marred since the public first became aware of it by a lack of transparency. The Executive, and particularly your office, have failed to provide sufficient detail about the contracting process, and prevented the Special Committee from questioning members of the Administration involved in the matter. District taxpayers are now twice injured by this matter -- the District having apparently paid an exorbitant mark-up when the contract was first issued, and now paying the vendor a large sum of money for no other reason than to bring this matter rapidly to a close. Indeed so far as we know no member of the Council has been given a copy of this settlement agreement, and we hereby insist that both the public and the Council know the terms of the deal you struck. We are particularly distressed that the best interests of the District will be compromised and that our ability to recover money for poor performance and perhaps even fraud will be lost. Accordingly, we hereby request a copy of the settlement agreement.
We have stressed, repeatedly, that the Attorney General is responsible for representing the public interest and upholding the law. For whatever reason, you still fail to grasp this, and your decision to settle this matter at this point is further evidence of that.
Sincerely
Phil Mendelson, Chairperson
Committee on Public Safety & the Judiciary
Mary M. Cheh, Chairperson
Committee on Government Operations & the Environment
Harry Thomas, Jr., Chairperson
Committee on Library, Parks & Recreation
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