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This
(12-07-97)excerpt is from a series of articles
published in the ATLANTA JORNAL CONSTITUTION.
Connections pave the way
By Bert Roughton Jr., The Atlanta Journal-Constitution As he was retiring in 1987 to pursue his fortune in the private sector, Georgia Transportation Commissioner Tom Moreland pledged that he would not work directly with the state. Yet, over the ensuing decade, Moreland's engineering firm has signed more than $7.3 million worth of consulting contracts with the department he ran for 13 years, a review of state records by The Atlanta Journal-Constitution shows. Additionally, Moreland's firm, working for private clients, has designed two of the state Department of Transportation's largest construction projects: the $72 million Kennedy Interchange at I-285 and I-75 in Cobb County and the $100 million complex of projects along I-85 in Gwinnett County near the Sugarloaf interchange. Moreland, once one of the state government's most powerful men, has built a formidable consulting engineering business in Moreland Altobelli Associates Inc. In addition to the state, his client list includes most county governments in metro Atlanta as well as major private developers. Additionally, Moreland Altobelli has recruited many of its key managers from the top echelon of the Department of Transportation. Many are retirees drawing state pensions ranging from $40,000 to $113,000 a year at the same time they are working as consultants on state projects. In some cases, former DOT employees work on the same projects at Moreland Altobelli that they had worked on when they were state employees, records show. This continuing interaction between Moreland's firm and his former department is perfectly legal in Georgia, which has some of the country's most permissive ethics laws. Laws in many states restrict elected officials and/or employees from moving so freely into the private sector. Full story is available for a fee on the internet in the "Stacks" Photo by David Tulis, The Atlanta Journal-Constitution Longtime friendships, ties map future of Gwinnett Sometimes it's hard to tell where Gwinnett County ends and Tom Moreland begins. Gwinnett has been bread and butter to Moreland Altobelli Associates Inc. since the engineering consulting firm was formed a decade ago. Moreland started the business in 1987 a few weeks after he abruptly retired after 13 years as commissioner of the Georgia Department of Transportation. Since then, the firm has been paid nearly $20 million by Gwinnett taxpayers, primarily to buy right of way and monitor construction of more than $400 million in road projects, county records show. And in September, the county renewed its so-called "core services" agreement with the firm, in a five-year deal worth another estimated $12 million to $14 million. Over the decade that it has worked for the county, Moreland Altobelli also has been paid millions of dollars by private Gwinnett developers and landowners eager to enhance their holdings with publicly funded roads and interchanges. There's nothing illegal about this. Moreland Altobelli can work for private clients in the county as long as that work is disclosed to the county and the firm isn't sharing confidential county information. Even so, the practice raises questions: Can the firm balance the loyalties of clients with potentially conflicting interests? There's nothing illegal about this. Moreland Altobelli can work for private clients in the county as long as that work is disclosed to the county and the firm isn't sharing confidential county information. Even so, the practice raises questions: Can the firm balance the loyalties of clients with potentially conflicting interests? Within the circle of politicians and competing consulting firms, Moreland Altobelli's work in Gwinnett County -- both public and private -- is nothing new. But few outside this circle have, until now, examined the way in which the state, county and private contracts intersect. Moreland Altobelli's largest private clients in Gwinnett are politically connected Scott Hudgens, who developed Gwinnett Place mall and is a partner in the Mall of Georgia, and the Eastern Airlines pilots pension fund, which owns the 1,900-acre Sugarloaf Farms development rising in the middle of the county. The Sugarloaf owners have paid Moreland's firm $4.1 million to design a series of projects -- including a new interchange on I-85 -- that will provide essential interstate access to the development, which has a world-class golf course at its heart. The state expects to spend more than $100 million to build the improvements Moreland's firm is designing in the I-85 corridor between Ga. 316 and Old Peachtree Road. Additionally, the Sugarloaf Parkway, partially designed by Moreland Altobelli, is expected to cost more than $75 million more when it is completed. Hudgens is paying Moreland to redesign Ga. 20, in effect the driveway to the Mall of Georgia, which is rising on 500 acres of tilled red clay alongside I-85 near its juncture with the proposed Outer Perimeter. Moreland dreamed of building the Outer Perimeter when he was commissioner, and his firm designed the leg that forms the boundary for the mall property. Transportation Commissioner Wayne Shackelford has agreed to build Moreland Altobelli's design. Hudgens also hired Moreland's firm to design an extension of McGinnis Ferry Road, a $9 million project on one of the few roads that cross the Chattahoochee River to Fulton and Forsyth counties. The extension will dramatically improve access to nearly 300 acres that Hudgens has targeted for commercial and residential development. Maintains close ties Whenever representatives of the state, county and developer meet to discuss these projects, there is a common bond: Each is a Moreland Altobelli client. In addition to working for developers and the county, the former DOT commissioner retains close ties to his old department and has had more than $7.3 million in contracts from the state DOT. For his private clients, Moreland does much more than simply provide blueprints. He helps them navigate bureaucratic rapids and secure public funds for roads projects that enhance their holdings, records show. For their fees, Moreland Altobelli clients get his adroit skill at maneuvering through the complexities of local, state and federal transportation bureaucracies. In doing so, Moreland Altobelli seems to shift from engineering to advocacy or even lobbying. In October 1994, about the time Hudgens hired his firm, Moreland, acting in this case as Gwinnett County's consultant, secured a commitment from Shackelford for $5.4 million toward McGinnis Ferry Road, state records show. Shackelford, a former developer, was Hudgens' partner in Gwinnett Place. In meetings with county, state and federal officials on Sugarloaf, Moreland and others on his staff -- primarily former DOT officials -- have guided discussions about funding, federal approvals and construction phasing to expedite the Sugarloaf projects, records show. From a reading of the minutes, it isn't always clear who Moreland is representing at these meetings -- Gwinnett or the Sugarloaf owners. Moreland, whose firm began working on the Sugarloaf project in 1988, refuses to disclose anything but the most basic information about his work for this client, saying his contract forbids him from discussing it. Taylor Dougherty, the Boston-based financial consultant who represents the Eastern pension fund, also refuses to either discuss its relationship with Moreland's firm or grant permission to Moreland to discuss it. "It just isn't in our best interest to discuss it," said Allen Taylor of Taylor Dougherty. No other proposals sought Moreland Altobelli's Sugarloaf fees have been paid out of a $5 million contribution the pilots fund made toward the road improvements in a 1990 deal that also provided the county about 90 acres for its civic center. The fund was exhausted in April, so the county government agreed to pay $1.13 million for Moreland Altobelli to design the final phase: the interchange at I-85 and Ga. 316. The county, which usually uses other firms to perform design work, awarded the contract without asking any other engineering firms to submit proposals. Hudgens hired Moreland in 1995 even though the firm agreed in its 1992 county contract not to design projects for private clients in the county. For both Hudgens projects, county officials decided not to adhere to the clause that would have prevented Moreland from working for Hudgens. County Transportation Director Brian Allen said Moreland Altobelli was allowed to work on the mall road because the state -- and not the county -- is paying to build the project. This, he explains, frees Moreland's firm from being in the conflicting position of designing a road and then supervising the construction. Allen expressed no concern about the potential for Moreland's having a conflict of interest. State licensing rules require engineers to avoid conflicts of interest and require engineers to disclose the potential of conflicts to their clients. Moreland has twice been appointed by Gov. Zell Miller to the state board that enforces these rules. A 1976 Georgia attorney general's white paper defines conflict of interest as a situation in which someone working on behalf of the public is swayed to act in any other interest by the prospect of personal gain. Simply being in the position to be tempted is considered a conflict. The paper does not say whether rules governing conflicts with public employees extend to consultants, and the attorney general's office declined to hazard a guess. In most cases, consulting contracts set the rules, but the only provision in the Gwinnett contracts was the clause that prohibited the firm from doing private design work in the county. Denies any conflict Moreland takes great exception to any suggestion that he or his firm fails to balance the interests of his public and private clients. In a lengthy, acrimonious interview at which he was represented by three attorneys, Moreland said there is never any conflict. When he works for private clients, it is always with the consent of the county, he said. "I made it a practice to tell them before we took a project such as these," Moreland said. "I didn't see them as a conflict." Moreover, he argues there can be no conflict because all the parties agree that the projects are justified and that Moreland Altobelli should do the work. It's then a matter of the firm's designing the projects to meet the requirements set by the public officials. "We were approached by both [the county and developer] and in every case we were asked to do the project by the public entity and the private entity," he said. "So are we working for the public entity or are we working for the private entity? "It doesn't make a difference -- they have the same goal," Moreland said. "So, you see, it's no task." The county grants such permission to Moreland's firm with little apparent debate or formality. This is easy to imagine given the familiar conditions in which the county and its consultants work. Moreland's staff occupies space in the county transportation department offices and writes letters and memos on "Gwinnett County Road Improvement Program" stationery. When first asked by a newspaper reporter in May about his work on the mall road for Hudgens, Moreland said he had informed the county in writing and obtained permission to do the work. However, after seaching its records under a request filed by the newspaper under the state Open Records Law, the county couldn't produce a copy of any such letter from Moreland with regard to Hudgens or any other private client. Moreland also has been unable to find the letter, and his lawyer conceded in October that it may not exist. However, county records do contain a letter from Hudgens to County Commission Chairman Wayne Hill saying Moreland's firm had bid for the work. Hudgens asked if the county objected and noted that he had already informed Allen. There is no record of a response by Hill. As the county prepared its new consulting contract with Moreland Altobelli last summer, the clause restricting private design was softened to give the transportation director the explicit authority to allow the firm to work for private clients. Hill sees no problem in Moreland's working both -- or all three -- sides of the fence, stressing that if there is a conflict, he would demand that Moreland adhere to the county's wishes. "If it comes down to the county or one of his clients, his client is out of luck," the chairman said. Hill offers nothing but praise for Moreland Altobelli. "Gwinnett County deserves the best, and they're the best around," said Hill, who added that he also takes comfort in his faith in Moreland's honesty and honor. "He has a very high stature. If Tom Moreland tells me something, I can take it to the bank." Campaign contributions Hill also has gone to the bank with a few checks from key figures at Moreland Altobelli. Hill, who was re-elected last year, received $6,750 in campaign contributions from Moreland, the firm's two other key board members -- James and Virgil Williams -- and Connie Altobelli, the wife of Moreland's retired partner, county records show. Moreland personally wrote checks to Hill's campaign for $2,000 in 1995 and 1996. Contributors associated with Moreland Altobelli also helped bankroll the other two Gwinnett commissioners who were re-elected in 1996: $5,000 for Tommy Hughes and $3,500 for Judy Waters. In 1995, Waters returned a $1,500 contribution from Moreland that exceeded the legal limit in a non-election year. She said it was an accident. Hill, Hughes and Waters voted in July to extend Moreland Altobelli's contract five more years. The commission was unanimous in awarding the contract to Moreland's firm. Additionally, key Moreland Altobelli figures and their wives contributed $5,000 to the committee that campaigned successfully last year for the extension of the 1 percent sales tax. The revenue from that tax pays for the county's road program and Moreland Altobelli's county fees. Moreland already is preparing for the 1998 campaign. He's given Commissioner Kevin Kenerly $1,000, county records show. Contributors associated with the firm gave Kenerly $2,500 for his 1994 race. State licensing rules forbid engineers from making political contributions in order to secure contracts. Moreland refuses to answer questions about his relationship with Gwinnett political leaders. Bob Stanborough, a retired Rockwell International executive who opposed Waters, believes elected officials shouldn't accept contributions from a company and then vote to award it a county contract. "A commissioner should not be sitting in judgment on matters that a major contributor has an interest in," said Stanborough, who also spent six years as a federal procurement officer. "I spent too many years involved in government contracts to know that you don't accept a sandwich from somebody who wants a contract." At least some neighborhood activists in Gwinnett consider Moreland Altobelli a key player in a group of insular and powerful developers and political leaders who are guiding the county's development, sometimes without paying enough attention to the concerns of ordinary homeowners. "You often get the sense that there's a web of money and it feels as if it's holding our county hostage," said Joyce Nuszbaum, a lawyer who lives near Gwinnett Place who advocates for homeowner issues. "Moreland Altobelli is a significant player who can bring a lot of money to bear." Within the engineering community, Moreland Altobelli is considered unassailable in Gwinnett. Despite the size of the consulting contract for the 1997 road program, only two firms were willing to challenge Moreland Altobelli. By contrast, a similar consulting contractawarded in Fulton County last spring drew 10 serious contenders. Much of the reason for the modest response is the widely held feeling in the engineering community that trying to unseat Moreland Altobelli from Gwinnett is a pointless waste of money. "They have a lock on Gwinnett," said Tommy Terrell, a former Moreland Altobelli employee whose firm, Terrell Carroll and Hundley, was part of a joint venture that competed for the contract. "I felt like politically they would get it back, a couple of companies said they'll get it, so they didn't bother to bid for it."
By Bert Roughton Jr., The Atlanta Journal-Constitution Additionally, Moreland Altobelli has recruited many of its key managers from the top echelon of the Department of Transportation. Many are retirees drawing state pensions ranging from $40,000 to $113,000 a year at the same time they are working as consultants on state projects. In some cases, former DOT employees work on the same projects at Moreland Altobelli that they had worked on when they were state employees, records show. This continuing interaction between Moreland's firm and his former department is perfectly legal in Georgia, which has some of the country's most permissive ethics laws. Laws in many states restrict elected officials and/or employees from moving so freely into the private sector. Having so many faces from the DOT provides the firm a potent competitive edge when seeking contracts from the state. "It's the same as if a bunch of former IBM executives left IBM and wanted to compete for an IBM proposal," observed Larry Kaiser, the Rockdale County transportation director who often uses Moreland Altobelli designers. State Transportation Commissioner Wayne Shackelford dismissed the widely held belief that Moreland has any special access to the department, even though the men have been friends for 24 years. "I've known Tom for a long, long time, but I have friends in every state in America and quite a number of foreign countries as well," Shackelford said. Even so, the perception of having close ties with the DOT and Shackelford also helps Moreland Altobelli in competing for contracts with local governments, which often are eager to gain any edge they can in the competition to secure money and assistance from the state. "That's what they often present as a marketing point," Kaiser said. "If I were in their position, I'd do the same thing." The marketing must be paying off. More than two dozen counties have hired Moreland Altobelli over the years, including Gwinnett, Cobb, Fulton, DeKalb, Henry, Coweta, Newton and Rockdale. The firm has assisted local governments on more than $1 billion in public works projects -- most of which required state DOT funding or cooperation. Furthermore, Moreland Altobelli's competitors believe that having the upper layer of his company staffed with former DOT officials, with their pensions and benefits, provides the firm another competitive edge by taking some pressure off the company's overhead. Moreland refused to respond to specific questions related to his firm's business with the state or Moreland Altobelli's employment of former DOT employees. In an interview, Moreland argued that it is unfair to single out Moreland Altobelli because his firm is not alone in having a number of former state employees on the payroll. Moreland declined to name any consulting firm with so many former DOT employees on its roster. While other firms do employ former DOT employees, no firm has the same reputation for having such a heavy concentration. About 30 former DOT officials work at Moreland Altobelli, clustered at the top of a total work force of more than 300. A review of documents submitted by firms that competed with Moreland Altobelli over the past few years shows none with so many former DOT officials in key positions. Over the years, the firm has provided a variety of services to the department, from basic design work to providing construction management and inspections. The firm was hired last year to design a 10-mile segment of the Fall Line Freeway in South Georgia. Moreland Altobelli provides broad services for the DOT in three coastal Georgia counties, where the firm is under contract to manage many of the department's construction projects. The firm's familiarity with the state DOT was a selling point when two independent joint ventures that include Moreland Altobelli secured more than $2.3 million in consulting work on the state's $80 million project to replace the Sidney Lanier Bridge near Brunswick, state records show. Moreland Altobelli also is providing the designs for the DOT's two largest highway projects, the massive Kennedy Interchange in Cobb County and the expanse of projects along I-85 near the new Sugarloaf Parkway interchange under construction in Gwinnett. In both cases, Moreland's clients are private concerns eager to jump-start certain state projects by paying for the designs themselves. In each of these cases, Moreland's firm was paid more than $4 million to provide designs. In Cobb, Moreland Altobelli's client is a consortium of developers in the booming Cumberland/Galleria district, while in Gwinnett it is the owner of the 1,900-acre Sugarloaf Farms development. In both cases, the projects rely on Moreland Altobelli's design skills as well as its ability to deal with the DOT. Moreland's firm has benefited from his reputation of having an unparalleled grasp of the department's inner workings and unusually close ties to its top officials, particularly Shackelford. Shackelford, a former developer and Gwinnett County administrator, was installed at the DOT in 1991 by Gov. Zell Miller, whose chief of staff at the time was millionaire Virgil Williams. Williams was on the board of directors of Moreland Altobelli then and remains on the board today. During Shackelford's administration, Moreland Altobelli has received about $6 million in DOT contracts, about 80 percent of the work the firm has done for the state. Neverthless, Moreland denies that he has any special relationship with the DOT or Shackelford. In a written statement, he said: "It certainly is common knowledge that [I] had a long career at Ga. DOT, as did several of the principals of competing firms." Even if they are friends, Shackelford said he has no influence in awarding consulting contracts because he is uninvolved in the DOT's selection process until his assistants ask him to approve their choice. "It's set out to be done at the lowest level and rise to the top and not from the top down," he said. The department spends about $35 million a year with engineering consultants. Moreland Altobelli doesn't top the DOT's consultant list in terms of billings -- two firms, Jordan Jones and Goulding and TRW Inc. billed more in fiscal 1997 alone than Moreland Altobelli has billed over the decade. However, Moreland Altobelli is among the most active DOT consultants, and its billings have risen sharply over the past two years. Moreland enjoys exceptional access to Shackelford, to some extent because he has so many local government clients who do business with the DOT. The men meet and talk on the phone frequently. While there are no records of all the telephone conversations between them, state records show that Moreland and Shackelford have spoken dozens of times on Shackelford's state-issued cellular phone. Records show the men spoke on key dates. For example, Moreland called Shackelford on Oct. 8, 1992, the day Gwinnett County hired Moreland Altobelli as its chief transportation engineer -- worth more than $11 million to the firm. Moreland also called Shackelford within a few days of signing a similar consulting agreement with Bibb County worth nearly as much. The two men also spoke by phone on May 30, 1995, the same day that Moreland's private client, developer Scott Hudgens, wrote Gwinnett County Chairman Wayne Hill with a proposal for dealing with the transportation needs of Hudgens' Mall of Georgia project. As part of this proposal, Moreland's firm is redesigning Ga. 20, which fronts the mall. Shackelford agreed to construct Moreland's design. Moreland Altobelli cut its teeth on state contracts. In its lean early years between 1987 and 1990, the firm helped establish its fledgling business with $650,000 worth of DOT design projects on the northern arc of the Outer Perimeter -- a project Moreland conceived when he was commissioner. On April 15, 1987, the day Moreland made the surprise announcement that he intended to retire, he said he had not yet been offered another job. He set two criteria for his new career: First, he would not leave Georgia; and, second, he would not work for a company that did any business with the state. Moreland now expresses regret that he ever made such a statement, and explains that he made this pledge before he knew he would be in the engineering business after retiring. The day after he resigned he was offered a job by Williams, Miller's prime political patron, as CEO of the Williams Service Group, a Stone Mountain holding company with a number of subsidiaries that performed a variety of industrial and commercial services. However, a few weeks after going to work for Williams, Moreland decided to start an engineering consulting firm with Donato Altobelli, the former federal highway chief for Georgia. He then determined that it was impractical to forgo state contracts. Not quite a year after his retirement, Moreland's firm delivered a bid to his former employees at the DOT seeking a contract to design a segment of the Outer Perimeter in Forsyth County. Moreland's firm was selected and was paid $247,258 for the job. The two ranking DOT staff members who approved the selection of Moreland's firm for the Outer Perimeter contracts were hired by Moreland Altobelli soon after their retirements, state records show. Tony Dowd, at the time the state director of pre-construction, recommended Moreland's firm for the Outer Perimeter project in April 1988, retired in October and began work at Moreland Altobelli on Nov. 1. Earlier, Dowd had signed the freshly incorporated firm's 1987 application for certification to work as a DOT consultant. The other key DOT official involved in the selection was state highway engineer Alva Byrom, who retired from the department's third highest post in May 1990 and went to work for Moreland Altobelli in September 1991. Byrom, who also recommended Moreland's firm for a $186,500 contract to design bridge widening projects in Bibb County in May 1989, remains Moreland's right-hand man, handling the firm's bread-and-butter client, Gwinnett County.
Even though such "revolving door" practices are illegal in many other states, Georgia has no law to prevent state department heads from immediately pursuing state contracts from their old departments. Similarly, there is nothing to prevent state employees from going to work with a private firm under contract to the state, even on the same projects the former employees worked on while on the state's time clock. The lack of laws restraining potential conflicts of interest frustrates advocates of ethical reform such as former state Rep. Ken Poston. The author of landmark ethics legislation that was approved despite stiff opposition in the General Assembly in 1992, Poston expresses concern about the temptations state workers may face. "They might respond to a wink or a nod or whatever, so that they consistently do things in favor of that company with the tacit understanding that there would be something waiting for them in the end," said Poston, who pushed unsuccessfully for revolving door legislation intended to restrict elected officials from becoming lobbyists. Poston believes taxpayers may face an even greater risk when state employees leave their state jobs to sell their skills and knowledge in the private marketplace. "This is probably a lot more prevalent a problem, and a lot more insidious, because it's not quite so obvious as someone in public office switching roles," Poston said. "I could see where it could be a horrible problem." § While most states have revolving door rules for legislators, about a quarter of the states also restrict the flow of public employees to private firms that do business with their former agencies. In some states, former state employees are forbidden from ever working on projects for which they had a hand in awarding contracts. In Alabama, for example, it's illegal for former state employees to act as lobbyists or to represent clients -- including their private sector employers -- to their former agencies for two years after leaving state employment. Additionally, state employees who regulate private companies aren't allowed to take a job with firms they regulate for two years after leaving the state. In Georgia, the closest the state gets to regulating engineering firms is the DOT's certification of those firms that work on any projects funded by the state or federal governments. Without certification, firms are unable to work in Georgia. Georgia is among the handful of states without any revolving door restrictions on public officials or employees, said Eric Lorensini, a state issues expert with Common Cause, the nonpartisan public issue advocacy group. Shackelford said he sees no need to alter the existing arrangements with new policies or laws. Insider information on DOT projects, he reasons, isn't really worth much because so much of the agency's work is made public anyway. He also expressed scant concern that the loyalties of his employees might be divided because of a prospect of obtaining lucrative private-sector jobs. "The people in this work force very carefully do not address their future until their retirement date has come and gone," he said.
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