Monday, September 26, 2016

Why are taxpayers still paying a quarter of a million annually to Rob O'Brian and the Joplin Area Chamber?

While it is obvious that bringing new businesses and jobs to Joplin to important, why do the taxpayers have to continue the unholy alliance between the city and Joplin Area Chamber of Commerce and its executive director Rob O'Brian?

Last week, during budget hearings, the Council elected to once again fork over a quarter of a million dollars to O'Brian and the Chamber for economic development.

State auditors criticized the arrangement, which caused some changes to be made, but there is still the whole problem about having so much taxpayer money going to an organization that does not necessarily represent the best interests of the citizens of Joplin and leaving it under the control of a man whose poor judgment while working with the Citizens Advisory Recovery Team (CART) ended up costing the city millions.

The dealings O'Brian had with Wallace-Bajjali were fraught with ethical problems and the state auditor believed those dealings were connected to what turned out to have all the appearances of a criminal enterprise.

State Audit

My book Silver Lining in a Funnel Cloud detailed how O'Brian, former City Manager Mark Rohr, and the unelected leaders of CART commandeered the recovery, pushed for the hiring of Wallace Bajjali as master developer and then pushed the kinds of projects that they had been pushing for years, taking advantage of the tornado to make it seem like these things were a necessary part of the rebuilding process.

The audit came out a few weeks after the book was published and backed everything that had been written in it, offering plenty of detail as to O'Brian's involvement in the hiring of Wallace Bajjali, including his deletion of a key e-mail that would have shown that Wallace Bajjali provided a template for the hiring of a master developer that only Wallace Bajjali could meet.

The following passages are taken verbatim from the state audit:

Wallace Bajjali may have benefited from favorable treatment during the RFP and qualifications preparation and evaluation process because the RFP preparer and two evaluators had been meeting with David Wallace or employees of Wallace Bajjali before the RFP was drafted and proposals solicited. 

In addition, the city did not take sufficient actions to eliminate potential conflicts of interest before awarding the master developer contract. The Joplin Chamber of Commerce President Rob O'Brian (a member of the ITF) drafted the RFP and qualifications for the master developer during December 2011. 

Chamber invoices indicate Chamber of Commerce President O'Brian and another chamber employee, Gary Box, traveled to Houston, Texas, on October 1, 2011, to meet with representatives of Wallace Bajjali. They also met with David Wallace in Joplin on October 13, 2011. 

Box later evaluated the potential master developer proposals and was subsequently hired by Wallace Bajjali in August 2012. Additionally, an employee of Wallace Bajjali submitted a parking invoice from Dallas, Texas, dated December 5, 2011, which indicated he was meeting with city of Joplin representatives. 

Chamber credit card invoices indicated Chamber of Commerce President O'Brian was also in Dallas, Texas, on December 5, 2011. Additionally, in sworn testimony Chamber of Commerce President O'Brian indicated he first met with Wallace in August 2011, and met with him several other times during the fall of 2011. 

Also in sworn testimony CART Chairperson Jane Cage indicated she had met Wallace a few months after the tornado and at other times during the fall of 2011. Chairperson Cage was also a member of the CART ITF and an evaluator. Chairperson Cage developed the evaluation scorecard, evaluated the master developer respondents and completed a scorecard, and compiled the totals of the scorecards. 

It is questionable why the Chamber President, CART Chairperson, and another chamber employee had multiple meetings with a potential master developer company or its partners prior to drafting and evaluating the RFPs. 

In sworn testimony Chamber of Commerce President O'Brian indicated Wallace suggested the "master developer concept" for redevelopment of the city, and a Wallace Bajjali employee emailed him a template of a RFP at Wallace's request. However, Chamber of Commerce President O'Brian indicated he deleted the email. 

These prior relationships with Wallace Bajjali may have impaired the RFP preparer and the evaluators' ability to act impartially when preparing and evaluating the RFPs. Some of the RFP requirements and terminology may have been favorably written for Wallace Bajjali. The RFP included terminology regarding pursuit costs as a form of compensation, which was not used in proposals submitted by the 5 other RFP respondents. The ability to estimate these types of costs was also questioned by one of the respondents. In addition, some of the RFP requirements likely would have required the respondents more than a month to prepare and were questioned by other respondents. 

The audit noted that three of the seven members of the committee that evaluated the master developer proposals gave Wallace Bajjali much higher scores than the others. One of those was Chamber of Commerce employee Gary Box, who was later hired by Wallace Bajjali.

Another was Mayor Michael Seibert, who told auditors "he could not recall" why he gave Wallace Bajjali a higher score.

CART documents

The double dealings with Wallace Bajjali, which were so egregious that State Auditor Nicole Galloway forwarded them to law enforcement and the Jasper County prosecuting attorney (who never bothered to do anything), were also spelled out in CART minutes printed exclusively in the September 11, 2015 Turner Report:

Since the release of the state audit of the City of Joplin, officials involved with the selection of Wallace Bajjali as master developer have disputed the audit's allegation that the fix was in for the Texas company.

City Councilman Mike Woolston, who faces a censure hearing Monday night, says it did not happen.

Jane Cage, the director of the Citizens Advisory Recovery Team (CART) says it did not happen.

Rob O'Brian, president of the Joplin Area Chamber of Commerce and a CART member says it did not happen.

The record tells a different story.

Minutes from CART meetings held in early 2012 show that some team members were in such a hurry to hand the project over to Wallace Bajjali front man David Wallace that they ignored obvious warning signs, The record also indicates that not only was the process weighted in favor of Wallace Bajjali, but any effort to give another bidder a chance was immediately squashed.

Among the revelations in the official documents:

-The CART site team sent to Waco, Texas, to investigate Wallace Bajjali projects received a guided tour and had lunch with Wallace. The group included O'Brian, Cage, City Council member Trisha Raney, and Bruce Anderson, a senior vice president at Mid-Missouri Bank. Wallace Bajjali later hired Anderson as its financial director.

-Wallace Bajjali was the only firm vetted by CART and even that process was limited due to time constraints.

-CART accepted Wallace's pledge that his company was in good financial shape even though he presented no audited financial statements and was never asked for any.

-When CART member Clifford Wert, who expressed serious concerns about Wallace Bajjali, urged that the company that finished second in the CART Implementation Task Force grading of master developer candidates, be vetted., Gary Box of the Chamber of Commerce, who had done a background check on Wallace-Bajjali, indicated it would take too much time and he didn't believe "this committee would receive enough information to honestly render a decision." Box became one of the first Joplin residents to be hired by Wallace Bajjali.

-Woolston and Cage fought efforts to delay the selection of Wallace Bajjali and vet the J Start proposal that placed second in the CART team's scoring.

The Selection Process

The first people to review the six bids for the City of Joplin's master developer were City Manager Mark Rohr, Joplin Area Chamber of Commerce Executive Director Rob O'Brian, and Troy Bolander, the city of Joplin's manager of planning and community development, according to CART minutes.

Bolander provided an update to CART's Implementation Task Force at a noon meeting February 9, 2012 saying that "three or four" of the proposals stood out.

By the time the March 14 meeting of the full CART arrived, Wallace Bajjali had already been tabbed as the top choice for master developer.

Jane Cage opened the meeting and stated that after interviewing the four firms, Wallace Bajjali came out on the top by a fairly wide margin. In our ranking system, they received 50 votes, with J-Start receiving 36 votes, or second place. This committee decided to do some due diligence and split into two groups, one group to look for references, and another group that agreed to go on-site. 
Bruce, Tricia, and Jane went on a site visit on Monday and everyone else took reference notes, made phone calls, and tried to get information. Gary Box contacted Amarillo and visited with their staff, became Amarillo had spent about $70,000 on a due diligence study related to Wallace Bajjali. They had a lot of background material. 
Ms. Cage explained that now is the time to move forward with this. Wallace Bajjali was willing to help bring in their own money in previous development efforts. They primarily asked the cities to contribute land and have not made any other concessions. There are really two pieces of experience with them. There is one piece where Dave Wallace was mayor of Sugar Land, Texas, and his involvement as mayor in many activities that were listed in our first presentation. In another set of experiences, they were actually involved as developers.
Ms. Cage explained that due to time constraints, the committee members chose not to visit Sugar Land, but visited Waco, Texas, where Wallace Bajjali actually had development experience. They are not without some controversy surrounding their name. Amarillo has seemed satisfied with their results and recommended Wallace-Bajjali.
Our committee members had an opportunity to personally visit with David Wallace and were satisfied with the information they received and stated that Wallace Bajjali had done some really nice work. The next step, as an implementation task force, was to agree that they would be the right choice to bring to the table. Ms. Cage opened this up for discussion.
Mr. Anderson has never seen a nicer public housing facility for off-campus residents. The facility was clean and well-maintained and contained all the amenities any student would want. He was very impressed with the quality of the development.
Mr. Anderson explained that a warehouse was converted into retail space, with quality work being done, as well.
Ms. Raney explained that the people we spoke to were very highly informative and honest and Mr. Anderson stated that some very explicit questions were raised.
Ms. Cage explained that some questions were raised with David Wallace directly, with our committee also visiting with one of the property managers.
Mr. O'Brian thought the input was good, and our committee had the opportunity to visit with Waco's city manager, the assistant city manager, a couple of people from Mike Seibert's calls and a couple of people previously on planning and zoning. Mr. Duncan from Waco had not worked directly with Wallace Bajjali, but was very familiar with the work they had done in Waco.
Mr. O'Brian explained that downtown Waco was hit by a tornado in 1953, with 114 fatalities. Several blocks of the downtown area were basically pushed in and covered up and made into parking lots. Mr. Duncan talked about how the downtown had struggled a lot since then and discussed the additional impact on the downtown area. Their main street, Austin Street, was substantilly boarded up. During the 1980s, another group put together a plan but failed to accomplish anything.
The City of Waco had several projects in mind when they tried to reclaim downtown in 2000. Wallace Bajjali was the first master developer to come to Waco who was willing to take the risk, with a number of projects taking place downtown. Austin Street is pretty well inhabited at this time. Three or four buildings were undergoing renovation, with a couple of these buildings in the historic area being gutted out and being put back together.
Concerns about Wallace Bajjali

The minutes from the March 14 meeting show that retired banker Clifford Wert raised questions about Wallace Bajjali.
Mr. Wert had a real concern about Wallace Bajjali on the issue of, is this the right time for this community because of the recent court decisions that have impacted Wallace Bajjali with recent fines that have been assessed against them. He is really concerned regarding "skeletons in the closet" and the investigative questions that will likely arise and will immediately place this group and 503 and the City Council and our community on the defensive in responding to, you know, if it took Amarillo to spend $70,000 on their due diligence investigation, if that same question will be asked of us, is the correct timing for us as the community to enter into an agreement?Mr. Wert was concerned about the issues of how Wallace Bajjali is going to be paying this $350,000 or $400,000 back, if they are directly responsible for it. He is very concerned that we as a community are going to be immediately placed in a defensive role that will take up a considerable amount of time. He asked if this is really the right time.Mr. Wert went back to one of Mr. O'Brian's questions at a previous meeting and Ms.(Kim) Cox's question of investigating the second choice to determine a fair comparison in just the overall facts.Mr. Wert wished to be up front with this group that he is very, very concerned regarding the perception and the publicity and the investigative issues that he believes will be thrown to all of us on this committee, to our City Council, and to our community.

The minutes show that after Wert's cautionary warning, Cage, Anderson, and O'Brian continued pushing Wallace Bajjali with O'Brian offering a rose-colored version of the company's problems with the SEC.

Anderson did the same for a housing project Wallace was in that ended up in bankruptcy.
Mr. Anderson discussed one of the housing projects Wallace Bajjali was involved in was taken into bankruptcy because of a disagreement with the developer, but he did that to control his records, and he was able to stabilize that project and pay all of the outstanding liens. They weren't aware of any local suppliers or contractors who weren't paid.

When Wert continued to express concerns, Woolston insisted he was not concerned about Wallace Bajjali.
Mayor Woolston did not believe we need to have answers to those issues, but thought that everyone probably has concerns. He asked what the alternative would be and raised the question as to if this is the right time for our city. Mr. Wert discussed the alternative of going another week or two weeks and look at J-Start and have that comparison of their team with this team to make that kind of decision.
Woolston was not interested in any action that could steer the project away from Wallace Bajjali.
Mayor Woolston's question on J-Start is that they are fairly newly developed. He is not necessarily opposed to looking into that, in that it might be a good defensive posture for the public and the media if the committee does that.To do that, Woolston noted, would throw the committee of of its time frame to present a decision to the City Council. He said the committee could delay until the first council meeting in April, but even as Woolston appeared to be offering an opportunity to look at the number two proposal, he made it clear what he wanted done. We've investigated and we've asked the company questions and we've got the answers to satisfy us.
Later in the meeting, the question of Wallace Bajjali's financial stability was brought up. IT was noted that the company had not provided audited financial statements.

Ms Cage does not have audited financials for her business either and did not know how big a deal audited financials are. Mr. (Alden) Buerge stated they are very expensive.

Mr. (Doug) Doll explained that it is pretty unususal to have financial audits. Mr. Buerge explained that they are prepared by a CPA firm and that 95 percent of his customers use them.

At that point, Gary Box attacked the credibility of the number two proposal.
Mr. Box would also like to make one comment to everybody that was done during the interviews where this committee asked about the litigation, which they were forthcoming and told us everything. When we talked to J-Start and the other three consultants, the question was asked, "Are you not or are you involved in litigation that could affect the Joplin project?" The lead person with J-Start looked up and down at all his partners and answered for each one of them, and he said, "No." Mr. Box thought that was absolutely false because there was one person at that table who has been in litigation, and he did not say anything. He commented that you are going to find dirt on everybody if you keep digging.
Mr. Box didn't disagree that maybe this committee should do the second level, but he was not sure we could do the level of investigation that we've done on Wallace-Bajjali on J-Start or Beacon.

Despite Box's statements, committee members, including Wert, Buerge, Brad Beecher, and C. J. Huff suggested it might be a good idea to take a closer look at the J-Start proposal.

Cage said that she did not see anything in J-Start's proposal "that really recommends them over Wallace Bajjali."

Wert said he would prefer J-Start over Wallace Bajjali. "I am very uncomfortable with Wallace Bajjali."
Mayor Woolston asked Mr. Wert how he balances that, if we find out that J-Start has some litigation that they didn't disclose.

Woolston never asked the same question about Wallace Bajjali.
Cage continued to note that Wallace Bajjali had agreed to put its own money into Joplin, something the other proposals did not do. Buerge suggested a quick phone call to see if J-Start would be interested in doing things differently.

A frustrated Cage was not pleased with that proposal.
Ms. Cage discussed changing the game but stated we have to move forward and have to make something happen. We can't just sit and discuss.
She also said it was not fair to ask J-Start or any other company if they were willing to invest money. "They (already) gave us their proposal."

Eventually, without even taking a second look at J Start, CART recommended the hiring of Wallace Bajjali as the City of Joplin's master developer.


Concerned citizen said...

Rob is the public face of the lazy self selected elite of Joplin.He is only following orders.

Anonymous said...


Anonymous said...

@5:03 Rob is a snake and you underestimate what he capable of doing.