Dan Horn, and Sharon Coolidge

Cincinnati

Sam Malone’s last payday for consulting at the Metropolitan Sewer District was his biggest: $55,000 for four months work.

Top officials at Cincinnati City Hall say they cut the hefty check last June for the former city councilman because they wanted to dump a contract they didn’t like.

But records obtained by The Enquirer show they did it despite concern that Malone’s deal at the sewer district was “inappropriate,” despite a contract that some say didn’t obligate the city to pay, and despite bills that included work he shouldn’t have been doing.

City officials, who run MSD, say the payment was the best way to resolve a difficult situation. Hamilton County officials, who oversee MSD’s budget, say the city shouldn’t have used ratepayer money to give Malone a payout that amounts to $458 a day.

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“The reason they did it is it didn’t cost them anything,” said County Prosecutor Joe Deters, whose office advises county commissioners on the sewer district. “They’re playing with other people’s money.”

Malone began his consulting work under a system City Manager Harry Black and others say was deeply flawed, because it allowed former MSD Director Tony Parrott to sign off on $680 million in spending without oversight from City Hall or anywhere else.

An Enquirer investigation revealed last week that Malone’s contract was among hundreds of spending decisions Parrott made since 2007.

Black, whose predecessor, Milton Dohoney, gave Parrott that authority, ended the practice more than a year ago. He said the decision to pay Malone was part of his campaign to clean up the city’s procurement process.

“It was necessary to close out that contract,” said Black, who signed off on the $55,000 payment. “We viewed it as an urgent matter and that is how we approached it.”

Malone worked as a subcontractor for the Columbus law firm Bricker & Eckler, which has provided legal services to MSD for years, but his invoices went to both the law firm and Parrott.

The $55,000 check was made out to Bricker & Eckler, but emails between city officials show it was to cover Malone’s invoices. It would be the last check he would collect for consulting related to MSD’s Small Business Enterprise program, which helps local and minority-owned firms get work with the sewer district.

All told, Malone submitted $366,000 in invoices and collected $331,000 from MSD between January 2012 and May 2015.

Neither Malone nor the law firm would comment on how Malone became the firm’s consultant or why they went their separate ways. But emails obtained by The Enquirer shed light on how the relationship ended.

The first hint of a change came on May 18 when Mark Evans, an attorney with Bricker & Eckler, told Parrott he wanted to discuss “issues regarding the engagement” of Malone’s company, Urban Strategies & Solutions.

Parrott, now executive director of Louisville’s Metropolitan Sewer District, did not return calls seeking comment, and no other information about the issues with Malone’s firm are mentioned in emails.

Around this time, city officials say, they were just learning of Malone’s involvement with Bricker & Eckler.

Black said the arrangement between Malone and the firm was inappropriate, though he wouldn’t say why other than that Malone should have contracted directly with MSD.

“The city immediately expressed its discomfort with this relationship,” Black said.

Bricker & Eckler formally ended its deal with Malone on May 31. Two weeks later, city officials were ready to make the final payment.

Emails and other documents show city officials signed an agreement, cut the check and handed it over to Bricker & Eckler on the afternoon of June 11. Assistant City Manager John Juech said in an email that day he would pick up the check from the finance department himself and deliver it to Black.

Everyone involved knew who the check was for.

“This is a MSD payment to Sam Malone that will be processed today,” Finance Director Reginald Zeno wrote in an email to several staffers.

Vague invoices, large bills

To make the payment happen, city officials retroactively amended a professional services agreement the city had signed with Bricker & Eckler in October 2013.

Amending a contract or service agreement is not unusual, but it’s typically done before the money is spent.

The original agreement, which authorized MSD to pay the law firm for contract advice, made no mention of Malone and forbid Bricker & Eckler from taking on a subcontractor without city approval.

It also capped the city’s maximum financial obligation to the firm at $250,000.

The city, however, amended the agreement on June 11 by raising the maximum obligation to $305,000 – precisely enough to cover Malone’s $55,000 check.

When asked why the city paid, Black said the city’s law department advised him it was the best way to close out the contract.

“The payment was made in accordance with the city’s standard contract administration process,” he said.

Deters said the city would have been within its rights to refuse to pay, since the firm was asking for money beyond the amount allowed under the original agreement.

“It’s outrageous,” Deters said.

Malone’s invoices, which were submitted monthly to Parrott via Bricker & Eckler, contain vague references to the work he was doing for $250 an hour. Early invoices show he billed $62.50 for each email he sent and each phone call he made, and $500 for a two-hour meeting.

Later invoices include only a boilerplate description that is repeated for every hourly charge: “Tracking Monitoring Research Consulting Responsible Bidder & Local Hire Consulting.”

The line about responsible bidder and local hire refers to new rules the city was attempting to implement at MSD, which would have required contractors to run union apprenticeship programs and to fulfill other requirements.

The rules were tossed out, however, by a federal court in mid-2014, ending the city’s need for consulting on those issues.

Malone’s invoices, including those submitted for the $55,000 check, continued to say he was doing consulting work on responsible bidder and local hire for more than a year after the court ruling.

Still pitching more work

Malone was undaunted by the city and the law firm’s decision last June to stop doing business with him.

He submitted two new invoices – for a total of $34,000 – directly to MSD in July and August for the same consulting work. His new invoices included the same references to the defunct local hire and responsible bidder rules.

Those invoices cover 34 days of work. They also state that Malone worked four hours on behalf of MSD on June 11 – the day the city cut the $55,000 check and formally ended its relationship with him.

The city didn’t pay the invoices and later sent Malone a letter explaining why.

“There is no contract between you and any city or county entity,” wrote Terry Nestor, the city’s deputy solicitor. “As such, there is no obligation for the city or any related entity to pay.”

But Malone didn’t give up. He reached out to all three county commissioners in mid- to late-2015 in an attempt to get the county to pay his unpaid invoices to the city, or to generate new work through the county.

Former Commissioner Greg Hartmann said he met with Malone and Zola Stewart, another MSD consultant on small business and minority contracts, at their request last summer.

He said they wanted the county to hire them to do the work they’d been doing under Parrott for years. Commissioner Todd Portune said he had a similar conversation with Malone in November.

“At the end of the meeting, it became clear he was pitching a contract,” Portune said.

The meetings never resulted in a deal with the county, but they did create confusion among county and city administrators.

County Administrator Christian Sigman asked Black in an email whether Malone and Stewart were meeting with commissioners at the request of the city, or whether they were acting as “vendors with an unsolicited proposal.”

Black replied: “Unsolicited.”

Later, in an email conversation with Hartmann’s aide, Sigman said he believed the city intended to bring that kind of consulting work in-house through its new Department of Economic Inclusion.

“My sense is that the inclusion professional Harry brought in has no use for these two,” Sigman wrote, referring to Malone and Stewart. “Trolling days are over.”

Some at City Hall, however, had a different take. Juech, the assistant city manager, sent an email to Black and Mayor John Cranley stating that he’d heard the commissioners sought out meetings with Malone and Stewart.

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Juech said he based that conclusion on conversations with Parrott and Councilman Charlie Winburn’s office, among others.

Black said the city’s position now is that any work Malone does for MSD will require the approval of the county, which does not appear to be forthcoming.

Hamilton County Commissioner Chris Monzel, president of the board of commissioners, said the city’s economic inclusion office and the county’s own staff are capable of doing the work.

“We don’t need those services,” he said Thursday.

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