Did Cincinnati city official threaten law firm if it didn't pay politically connected consultant?

Audit team says claim couldn't be substantiated
Did Cincinnati city official threaten law firm?
Posted at 1:28 PM, Jun 29, 2016
and last updated 2016-06-30 00:29:31-04

CINCINNATI -- A high-ranking city official told a law firm its contract would be terminated if it didn't "move mountains" to pay a politically connected consultant, a Columbus attorney alleged.

But auditors looking into the matter say the official in question -- Assistant City Manager John Juech -- denies having ever made such a threat, and, in fact, denied having talked to the attorney. And at a special meeting of Cincinnati City Council Wednesday, Juech reiterated he'd not threatened the firm, Bricker and Eckler, with termination.

"I did not make a call to (Bricker and Eckler attorney Mark Evans) threatening Bricker and Eckler's work," Juech told council members.

Gina Marsh, who at the time was a city attorney working closely with Bricker and Eckler, said she understood from her boss that City Manager Harry Black was threatening to terminate the contract if the firm didn't make a swift payment. Black denied telling city staff to threaten the firm.

Council members Wendell Young, Yvette Simpson and Chris Seelbach called the meeting, they said, in an attempt to get to the bottom of what's shaped up to be case of she-said/he-said/he-said. Before it even began, council members and Mayor John Cranley argued over whether the special session could start early -- and if it should be held at all.

The allegation came to light during a recent audit of the Metropolitan Sewer District of Greater Cincinnati. Sewer rates have skyrocketed for Hamilton County homeowners and businesses as the district has embarked on a massive, EPA-ordered overhaul. The audit, released earlier this month, found poor oversight on spending, mismanagement and nepotism under former City Manager Milton Dohoney Jr. and former MSD Director Tony Parrott. Auditors did not say anyone broke the law at MSD, but they did urge further investigation by “an outside agency” to determine if a crime occurred.

IN DEPTH: Feds' MSD investigation could take years

Sam Malone, a former city councilman who's remained close with current Councilman Charlie Winburn, had an unusual subcontracting relationship with Bricker and Eckler, which had been working for MSD since 2008. Malone's relationship with Bricker began at MSD's request in 2011, when the sewer district approached the law firm about taking part in a review of MSD's small business program.

Quintin Lindsmith, a Bricker attorney, said MSD asked the firm to bring on Malone's company, Urban Strategies, as a consultant. Generally, the request wasn't out of the ordinary, he said at a council committee meeting Tuesday.

"But what made it uncomfortable for us -- and maybe that's too strong a term -- is we didn't know this person at all," Lindsmith said.

What evolved by late 2012, he said, is that the firm essentially acted as a pass-through for Urban Strategies: Malone submitted invoices to the law firm, the law firm passed those along to MSD, and once MSD paid the law firm, it paid Malone.

"Mr. Malone was what you might call a high-maintenance consultant," Lindsmith said. "He was constantly demanding payment. Where's my check? Where's my check? Frequent phone calls."

Assistant City Manager John Juech

Over time, he said, Bricker became increasingly uncomfortable with the relationship, as the firm had no oversight over Malone's work. By early 2015, he said, "it became untenable."

Several months after taking office, Black also determined that relationship wasn't appropriate and moved to end it. Lindsmith said the firm terminated its contract with Malone on May 27, 2015, but Malone had already submitted several invoices that hadn't been paid.

Two weeks later, "on June 11, 2015 at 3:06 p.m., there began a cascade of phone calls," Lindsmith said.

The first was from Malone to Mark Evans, Bricker's lead construction attorney on the MSD contract. Malone demanded Bricker immediately pay Urban Strategies $55,000 for the final invoices, Lindsmith said, but he was informed he wouldn't be paid until MSD paid Bricker.

Malone threatened to go to Black unless he was paid, Lindsmith said.

Next, Lindsmith said, Evans got a call from Gina Marsh, a city attorney working at MSD. She called to give Evans a heads-up that he'd be receiving a call "from someone in the city manager's office demanding that Urban Strategies be paid in 48 hours or the city manager was going to terminate the firm's contract with the city," Lindsmith said. He emphasized Evans viewed her call as a professional courtesy.

"That afternoon, (Evans) did receive a call from a male individual who indicated he was an assistant city manager," Lindsmith said. "His recollection is that it was Mr. Juech. And he was told that the firm needed to move mountains to get Urban Strategies paid within 48 hours, or the city would terminate the firm's contract with the city."

At the time, Juech was a senior policy adviser to Black; before that, he was an aide to Vice Mayor David Mann, who was the first council member to call for answers about the law firm's allegation. Juech became an assistant city manager in late July 2015.

Lindsmith said Evans told Juech that the firm wouldn't pay Malone unless it received funding from MSD to cover the bills.

Juech's request, he said, "wasn't ordinary. We were being asked to advance out of firm funds $55,000."

Lindsmith said Juech later called back, "essentially saying 'Fine.'" The city overnighted a check to Bricker's Columbus office, which arrived June 12. Lindsmith said on the same day, Malone picked up his check at the firm's West Chester Township office.

"There was no benefit to our law firm to have this contractual relationship," Lindsmith said. "There was no markup. There was only a high-maintenance consultant and, now, public grief."

Seelbach asked at Wednesday's meeting why there was such a sense of urgency around paying Malone. Black told him that's simply how he operates. And he said he didn't direct anyone to threaten Bricker and Eckler's contract if it didn't pay Malone.

Bill Moller, a former assistant city manager who worked on the MSD audit, also said Juech denied he ever spoke to Evans when he asked Juech about it earlier this year. Juech's city phone records from June 11 show no calls to the law firm.

"I recall bringing it back up with Mr. Evans, and he was unclear as to whether or not John Juech made that statement or not, so that issue went away," Moller said.

Marsh told the auditors she learned of the situation from her boss, Deputy City Solicitor Luke Blocher. Blocher said Tuesday he simply relayed to Marsh that the need to pay Malone was of "the highest priority" to the city.

"Both Ms. Marsh and I were simply messengers of this overall decision," he said.

But after Wednesday's meeting, Marsh, now MSD's director of government and public affairs, said Blocher told her about the specific threat to end Bricker's contract.

"It was actually my supervisor, Luke Blocher, who told me that he had spoken with the city manager, and that the city manager said that the payment needed to be made within 48 hours or the Bricker contract would be terminated," she said. "That is the message that I passed along to Mark Evans."

After Marsh told reporters about her conversation with Blocher, Young said he feared for her employment.

"My hope is that she has claimed or will claim whistleblower status," he said.

Marsh didn't actually address council during Wednesday's meeting; Black said some of the words being used gave him pause because "we're not in a courtroom. This is not necessarily a hearing. This is a special meeting. I'm just throwing it up there as food for thought in that these individuals are not represented."

Before Marsh spoke to reporters, Young said he felt as if she was being "thrown under the bus" during the meeting.

"The only one throwing her under the bus is you," Cranley shot back. Marsh once served as an aide to Cranley when he was a councilman.

The mayor also accused Young, Simpson and Seelbach of calling "a bunch of secret witnesses and didn't tell us in advance who you were calling and what you intended to ask them." Young's office sent out a media advisory a Tuesday afternoon, listing the people expected to speak at Wednesday's special meeting.

'What Happened Happened'

The clause referencing the threat -- "said he received a communication that the city would no longer engage his firm if the subcontract was not paid posthaste" -- was removed from the auditors' final report because the allegation couldn't be substantiated, Moller and Assistant City Solicitor Terry Nestor said at Tuesday's committee meeting.

Terry Nestor, left, and Bill Moller address Cincinnati City Council's Rules & Audit Committee on Tuesday, June 28, 2016. Image by CitiCable

Nestor also said the city simply was working to make a "clean break" with Malone and avoid potential litigation for nonpayment. And, he argued, determining who said what went beyond the auditors' scope of work.

"I just don't think it was a clear recollection after eight months," Nestor said.

He added there was no finding of "nefarious intent."

"The characterization of that as a threat is itself subjective," Nestor said. "Whether or not something is a threat is an editorial comment."

Lindsmith said the law firm "wholeheartedly" stands by Evans.

"What happened happened," he said. "Mr. Evans does not deserve the kind of scrutiny and suggestions that have happened here."

As to whether those invoices should have been paid in the first place -- Black noted the auditors found very little in the way of work product -- both he and Cranley said Parrott certified the invoices.

"At that time, there was no reason to believe Tony Parrott was making that up," Cranley said.