Willis Pushed Sole Source Contract despite Apparent Financial Interest (UPDATE 1)

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UPDATE: APN has received an email from Willis stating “I have NEVER worked for nor have I ever been offered employment with Fog Fuels!  Further, I have never received any type of consideration or remuneration from Fog Fuels or any of its owners.”  However, the email from FogFuels’s CEO states had been offered employment with FogFuels.  Also, Mr. Willis has now threatened APN with a libel lawsuit. ####

(APN) ATLANTA — Councilman Lamar Willis (Post 3-at-large) introduced and pushed legislation for the City of Atlanta to pursue a controversial sole source contract with a company called FogFuels, to convert grease to fuel for the City, despite having an apparent financial interest in the company, Atlanta Progressive News has learned.

An email dated August 03, 2012, obtained by APN, with the subject line “New team Members,” shows that Willis had been appointed to a position with FogFuels as a government liaison by the time Willis introduced resolution 12-R-1147.  A copy of the email is available here: bit.ly/OVgFhq

“Steve Hornyak will be officially introduced to the team as part of our new initiative on the Commercial Operations side of FogFuels as well [sic] Councilman Lamar Willis of the City of Atlanta on the Government side,” CEO Paul Marshall wrote, in an email that, according to the source who provided it, was sent to other FogFuels employees.

“Thank you for your attention to these new appointments.  Their profiles will be made available shortly.  This information as always is private and confidential under the NDA and not for public consumption until it is appropriate for the public domain,” Marshall wrote.

Willis failed to disclose to the City that he had been appointed as a government liaison for FogFuels; and failed to recuse himself from voting, voting yea on the resolution and introducing it.

This is not the first of ethical issues for Mr. Willis, who has already been fined 3,500 dollars by the Ethics Office of the City of Atlanta for a case related to his so-called “Foundation.”  In a related complaint filed by former Secretary of State Karen Handel he was found to have stolen money for personal gain from a purported foundation he ran that was in fact never registered as a tax exempt organization.  A judgment was issued in that case against Willis for 25,000 dollars.

“Funds donated for charitable purposes were transferred from the charitable account into both the personal and election campaign accounts maintained by Willis.  The funds thus transferred were not used for a charitable purpose,” Handel’s complaint stated.

“Willis withdrew cash donated to the ‘Foundation’ from the charitable account.  The cash was withdrawn without any corresponding charitable purpose evidenced,” the complaint stated.

Willis has even been hostile on ethics issues.  During the airport concessions debacle, Willis criticized Common Cause Georgia for pushing pay-to-play reform while having a racially homogenous Board of Directors.  And he introduced a proposal that failed, but which would have allowed the Council more say over selecting who heads the City’s Ethics Office.

Marshall serves both as CEO as FogFuels and as Managing Partner of Bridge Equity, the firm that is supposed to provide funding for its grease operation with the City of Atlanta.

As previously reported by APN, the Council two weeks ago approved a resolution authorizing the Mayor or his designees, and the Department of Watershed Management and other departments of the City as necessary, to negotiate, on a sole source contract basis, a binding agreement with FogFuels.

Chairwoman Felicia Moore (District 9) of the Finance/Executive Cmte has led the criticism of the sole source nature of the contract, arguing that it should have been put out for a Request for Proposals (RFP) instead.  Moore, Kwanza Hall (District 2), Natalyn Archibong (District 5), and Yolanda Adrean (District 8) were the only Councilmembers to oppose the sole source contract.

Previously, APN reported on an individual who said they also approached the City of Atlanta regarding a possible grease conversion contract, who followed the recent televised proceedings at the Finance/Executive Cmte regarding FogFuels.

“Lamar Willis pushed it as if he was the Vice President of sales of the company,” the individual said.  “Why on Earth would a Council Member get involved and try to sell a technical process for a company?”

As it turns out, Willis may not have been Vice President of Sales, but according to the CEO, he was part of the company’s “team” at the same time that he was part of the team that is the City Council and is supposed to represent the interests of the citizens and taxpayers of Atlanta.

APN has also learned that in January 2012, Marshall also was fined and suspended as a Registered Supervisor as a result of an enforcement action brought against him by the Financial Industry Regulatory Authority.

“For borrowing funds from a customer, in violation of NASD Conduct Rules 2110 and 2370, Respondent Paul James Marshall is suspended for 30 business days, fined $1,000, and ordered to pay restitution in the amount of $25,000 plus interest,” the ruling in the FINRA case states.

“For not responding timely to requests for documents, in violation of FINRA Conduct Rule 2010 and Procedural Rule 8210, he is fined $2,500.  He is also ordered to pay costs of the hearing,” the ruling states.

According to the source who provided APN with the email–who was granted anonymity out of legal concerns–Marshall is also facing an SEC action related to the FINRA case and has received demand letters from former FogFuels investors who will likely file lawsuits.

The source also stated that the entire original management team had left FogFuels out of ethical concerns, with the exception of Marshall and CFO Kevin Olson.

APN confirmed that, indeed, at least two former executives have let the firm.

According to a July 2011 presentation by FogFuels that was apparently sent out on a University of Florida listserv, the CEO at the time was Nigel Lakey, and the Vice President was Brendan Walsh.  Neither are still at FogFuels.  The company’s website no longer lists a CEO or Vice President; Marshall is listed as Managing Director on the website and Ellen Wesley is listed as Vice President of Finance on the website.

Meanwhile, Marshall is listed as CEO and Secretary of Fogfuels in the corporations database of the Secretary of State of Georgia.

When FogFuels was first incorporated in January 2011, Marshall and Olson were listed as the two Board Members of the company.  

According to the source, FogFuels’s entire business model was premised upon getting a contract with the City of Atlanta.  

The source also stated that a “sitting State Senator” had been sitting in the governmental liaison position with FogFuels before leaving over ethical concerns, and prior to being replaced by Councilman Willis.

(END/2012)

CORRECTIONS: Based upon the statement from Mr. Willis, which is noted above, APN has added the word “Apparent” prior to “Financial Interest” in the title.  Such interest is apparent based upon the email from FogFuels’s CEO.  While Mr. Willis now denies being part of the FogFuels team, or even being offered the opportunity to do so, this contradicts the information contained in the email, and it is unlikely that the CEO would make such an announcement without having first consulted with Willis.  The story has been updated to underscore that the apparent financial interest is based on the CEO email.

In addition, Mr. Willis noted that the 25,000 fine related to his foundation was part of a judgment, not a settlement.  This factual issue has been corrected above.

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