Mon April 28, 2014
'Now, Maybe They'll Listen.' Accusations Of Pay-To-Play Scheme
There’s a phrase that now hovers over the Charlotte city government:
Pay-to-play. An arrangement where political influence is for sale. Mohamed Moustafa says he was offered the chance at pay-to-play.
"The way they did this process was 100 percent pay to play scheme."
What’s interesting about his quote is it’s from July of 2011 - 2.5 years before Patrick Cannon was arrested and resigned. That was Moustafa then. This is him now:
"What I said then in 2011, it is proved itself now in 2014. It is proved."
Moustafa is the owner of Universal Cab in Charlotte. This week he plans to re-launch a civil suit claiming bribes determined which taxi companies would service Charlotte Douglas International Airport.
And Moustafa is not alone. Other taxi companies plan to launch lawsuits against Charlotte this week. In all they will seek at least $60 million in damages.
WFAE has been investigating claims of a bribery scheme that involves not only Patrick Cannon but one of his most powerful allies – a man named Mohammad Jenatian.
When Mohammad Moustafa heard of Patrick Cannon’s arrest he wanted to scream out four words: I told you so.
"I did, I did. Because I knew it was coming sooner or later," Moustafa says.
Frank Hinson says only one thing about the Cannon case that surprises him:
"It’s surprising to me that he’s the only one to be investigated up to this point."
And Obaid Khan says "I think I had a few tears come out of my eyes."
Tears of joy after years of frustration. Maybe now Khan thought, people will listen.
Khan, Hinson and Moustafa had each been repeating a similar refrain; Patrick Cannon was corrupt. His political influence was for sale.
HOW THE ALLEGED SCHEME WENT DOWN
In 2011, all three men owned cab companies in Charlotte – and all three had full access to the most lucrative market in the city for taxis, Charlotte Douglas International Airport. In fact, every cab company in the city did.
That summer the city council decided to slash the number of companies that could pick up passengers at the airport. Where a dozen companies had been, only three cab companies would remain. It was a plan championed by Jerry Orr, who at the time was a city employee and in charge of the airport.
"We believe that the drivers working will make more fares in less time. Intuitively we know that a happier worker makes a happier customer and that will lead to a better image for the airport," Orr told City Council.
It was a controversial move that had been debated and delayed for more than a year. And while the council publicly deliberated which companies would get the taxi equivalent of the golden ticket, Frank Hinson says his phone began to ring.
"Mohammed Jenatian called me a half dozen times leading up to this thing and said 'Frank, I need for your company to get on board."
Remember that name - Mohammed Jenatian. We’ll have more on him in a moment.
But what’s important here is this: At the time of those phone calls, Frank Hinson owned Checker Cab Company. And he’s confident Jenatian was proposing a pay-to-play scheme. For the right price, Hinson could guarantee his company would get one of those coveted airport slots.
"It was not even innuendo, it was pretty cut and dried," Hinson says.
Mohammed Moustafa still owns Universal Cab Company. And he too was getting calls from Jenatian – offering, he says, the same pay-to-play scheme.
Mohammed Moustafa: "He kept calling me every other day."
Tom Bullock (Reporter): "And how much was he asking for?"
Moustafa: "$5,000. $5,000. He wanted me to be gold member for $5,000."
The $5,000, that’s an annual fee to become a “Corporate Partner” of the Greater Charlotte Hospitality and Tourism Alliance, or HTA. Jenatian is president of the HTA.
Tax records show, among other things, the HTA’s board of directors dating back to 2005. When the Charlotte City Council was debating the airport move, Patrick Cannon was on the HTA board.
Obaid Khan, who co-owns Diamond Cab, says they did not take part in the alleged scheme.
"We feel like you shouldn’t have to pay to play. And that’s a statement used by a lot of people, pay to play and that’s exactly what took place at the airport," Khan says.
Frank Hinson of Checker Cab says he also declined to take part.
But Mohammad Moustafa of Universal Cab, well, he was curious. And what he says here tracks with sworn statements he gave to a federal court.
Moustafa wanted to make sure he got what he paid for. So, he says he asked Jenatian to prove he could deliver.
"Now, Mohammad Jenatian introduced me to Patrick Cannon. He looked me up and down and he said is he going to be a member of us? Right there, showing me that Patrick Cannon is in cahoots with us, HTA."
At the time, Patrick Cannon was mayor pro tem and head of that selection committee.
Two days later Moustafa says he paid Jenatian. But not the full amount.
"I say, 'Mohammad, I saw your influence I’m going to give you $2,500 now. I’ll give you $2,500 later after I see everything.' "
Meaning he would only pay in full when Universal Cab was granted a spot at the airport.
Moustafa says Jenatian told him that wasn’t good enough.
When the companies were announced, Universal wasn’t one of them. Neither was Diamond Cab or Checker. The three companies that were granted slots, were originally Yellow Cab, Crown Cab and King/Royal Cab. They were deemed the best by the selection committee led by Patrick Cannon.
It was a decision that Frank Hinson believes was rubber-stamped by the full city council.
"The council was very callous in dealing with the taxi companies," says Hinson, "They didn’t want to hear anybody’s sad stories. And I think the fix was in and they knew it."
The council had to back-peddle on one choice almost immediately. First it was discovered the owners of King/Royal had done time in a federal penitentiary. That company was out. It would be replaced by a new company called City Cab – a company that is a corporate sponsor for the HTA, Mohammad Jenatian’s group.
Then came news the FBI was investigating Crown Cab for fraud. The company had a contract to transport Medicaid recipients to and from doctors. Crown Cab was billing the Mecklenburg County Department of Social Services for trips that never occurred. Crown admitted fault in the case – but says it paid the money back. The company remains at the airport.
A representative from Crown Cab has been on the HTA board of directors since 2009.
HOW THE SCHEME COULD BENEFIT MOHAMMAD JENATIAN AND PATRICK CANNON
Let’s start with Jenatian and his salary.
As the Charlotte Observer first reported, Jenatian sets his own salary. Some years it amounted to 40 percent of the alliance’s total revenue.
Tax documents show that from 2005 thru 2010 Jenatian averaged salary was a little more than $212,000.
In 2011, the year the alleged pay to play scheme was in high gear, Jenatian’s salary dropped to $167,000.
The next year, Jenatian’s salary skyrocketed – to more than $243,000.
The HTA is effectively a one man shop. Those same tax records show the group spent just $73,000 on salaries for the rest of the staff.
Yet the HTA has more than 800 corporate members. They range from Bank of America and the Carolina Panthers to financial advisors and strip clubs. Those companies, through sponsorship, membership and fundraisers gave the HTA just shy of $640,000 in 2012.
It’s a testament to how connected Mohammad Jenatian is. As one Charlotte businessman and HTA board member told the Charlotte Observer, What Jenatian promises “he delivers.”
As for Patrick Cannon?
Two of the winning cab companies gave political contributions to Patrick Cannon. There’s nothing illegal in doing so unless such contributions are in return for political favors – something the FBI says happened in its case against Cannon.
In February of 2011 two owners of Yellow Cab gave Cannon’s Campaign a total of $8,000. The maximum allowed under the law. These were made at the same time that the committee Patrick Cannon chaired was picking which cab companies would get the airport contract.
The owners of Yellow Cab gave heavily to Cannon in 2013, when he was running for mayor. Campaign finance reports show those associated with Yellow cab contributed $28,000 to Cannon’s campaign, more than 10 percent of what the campaign raised.
And City Cab also gave to Cannon’s mayoral campaign – 27 separate donations, one for $500 came from City’s owners, the other 26 were smaller donations, below $300 each. And they came from the company’s drivers. In all it totaled just over $5,000.
Finally, you may be wondering if someone went to the authorities. Mohammad Moustafa did, from the chief of the Charlotte Police Department on up.
"I went to the chief. I get no response. I told the FBI, they told me you will hear from us. I never heard again."
But Moustafa kept going.
"I went to the DA's office. They told me we prosecute what the police department brought us. I went to USA DA. They told me we prosecute what the FBI bring us. I went to four different offices of government. What should I do?"
Again, this is laid out in Moustafa’s original court filings. He withdrew that suit over fears there wasn’t enough proof of this kind of corruption existed in Charlotte.
Moustafa says now that Patrick Cannon has been snared in an FBI sting, he’s re-filing that lawsuit.
"I lost a lot of income. I lost my home. Ok. This company lost revenue from the million to $400,000 right now."
Moustafa will also petition for re-admittance to the airport.
Frank Hinson couldn’t keep Checker Cab afloat.
"We’re no longer a taxi company at all, we’ve closed," Hinson says, adding that he also plans to sue the city.
And Obaid Khan says this week he’ll also ask a court for full access to Charlotte Douglas, along with $15 to 20 million in damages.
One other suit from a taxi company has already been filed. It, too, seeks $20 million in damages.