D.C. will pay Fenty friend's company to settle construction suit
Friday, July 2, 2010; 11:06 PM
The District has agreed to pay $550,000 to settle a $2.3 million claim by Banneker Ventures, the firm whose city contract to oversee the construction of renovated and new parks and recreation centers was terminated last year in the wake of an ongoing D.C. Council probe.
Banneker, owned by a friend and fraternity brother of Mayor Adrian M. Fenty's, argued that it owned the drawings and designs produced by the architects and engineers that the firm hired as subcontractors for the projects.
Although Fenty (D) has repeatedly said the recreation centers and ballfields are on track to be built, there have been delays because Banneker served its subcontractors with "cease and desist" letters in February to prevent them from working with the city agency now managing the projects.
"They had threatened to sue the architects, engineers, because they said their work was intellectual property of Banneker," Attorney General Peter Nickles said in an interview Friday. "There were lots of issues, but now we have a settlement."
The agreement took effect Thursday, when it was signed by Nickles and Adrianne Todman, interim executive director of the D.C. Housing Authority. It comes two weeks before a special council committee expects a briefing from lawyer Robert P. Trout, who is heading the council's independent investigation on a pro bono basis. Trout is reviewing how the contract was handled.
D.C. Council member Harry Thomas Jr. (D-Ward 5), chairman of the Committee on Libraries, Parks and Recreation, said Trout will present an update of the probe but that a final report is not ready. The investigation has been slowed by witnesses who remain reluctant despite subpoenas, he said.
The contracts controversy has been a campaign issue for Fenty, who is in a competitive contest against chief rival D.C. Council Chairman Vincent C. Gray (D) in the Sept. 14 Democratic primary.
Thomas said he is aware that releasing a final report closer to the election could be perceived as politically motivated, but he added that Trout and his staff are trying to be thorough. "What we're trying to do is have true findings as opposed to thinking this is a political witch hunt. We want to do this right," Thomas said.
Omar Karim, owner of Banneker, and Regan Associates, the Virginia-based firm that served as Banneker's consultant, have been heavy contributors to Fenty's campaign. One of Banneker's subcontractors was Liberty Engineering and Design, a firm owned by Sinclair Skinner, another Fenty friend and fraternity brother.
The firm earned about $900,000 on its subcontract, according to testimony Skinner gave before the committee after a Superior Court judge threatened him with a costly fine for failing to appear. Skinner, who is not a licensed engineer, farmed out much of the work to other firms.
He remains a visible volunteer on Fenty's campaign.
Lawyer A. Scott Bolden, who represents Karim and Skinner, called the situation "a legal mess created by others."
"Unfortunately, the unnecessary and unreasonable scrutiny of this D.C. contract is ongoing with the D.C. Council at great expense to my clients and the residents of the District of Columbia, with the real victims being D.C. residents, Banneker and its many subcontractors who worked extremely hard to simply renovate and rebuild several recreation and community centers in the most challenged part of the city," Bolden said in an e-mail Friday.
The council began its investigation in October after learning that the mayor's administration had funneled millions of dollars through the D.C. Housing Authority for the projects. The transfer circumvented a city law requiring the council to vote on contracts exceeding $1 million.
Banneker's initial contract was $4.2 million and allowed the firm to collect a 9 percent markup on some subcontractors it hired for nearly $100 million.
In December, the housing authority and the Fenty administration were criticized for giving Banneker $2.5 million on Christmas Eve for work done by the firm and 12 subcontractors from September through November.
This week's $550,000 settlement is supposed to cover unresolved payments.
Under the agreement, Banneker will get nearly $265,000 within 10 days. Banneker will receive the remaining $285,000 when it can show that it has paid money owed to nine subcontractors, including $11,863 to Liberty.