By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
"I don't care who they proposed," he said. "They got Bayou City Enterprises. Now if anything is nefarious about that, that's who they have to deal with."
Calls seeking comment from officers of Bayou City and Municipal Collections were not returned. But a third explanation from Hall suggests that Bayou City, which was a losing bidder on the contract won by Municipal Collections, either asked for -- or was offered -- a special subcontracting deal as a consolation prize. "All we were going to have was feuding between the two of them unless each of them thought that they had equal dignity to work in the contract together," Hall explained. "They came to my office and they worked out an agreement and said that's the way they would work with one another."
Hall said Bayou City handled the printing and mailing of notices for Municipal Collections. But, according to documents in the city controller's review, Bayou City, in fact, provided "no service of value to the city, or for that matter to [Municipal Collections] ...." The review found that another company -- Premier Printing Inc. -- apparently carried out those duties, and Bayou City acted as nothing more than a "pass-through" -- meaning it paid Premier Printing with city funds from its guaranteed cut of the Municipal Collections contract.
Last week, the city controller's office began withholding payment to Bayou City. But by then, the firm had been in line to receive more than $420,000 from the city through Municipal Collections.
Hall appears to have taken a similar approach in his efforts to cut Robert Muhammad in on West Capital's contract to collect tickets that are delinquent for more than 210 days. Muhammad had sent an unsolicited proposal to Lanier's office in July, suggesting that the city create a third contract, this one to collect some 500,000 tickets that are more than 450 days delinquent. He offered to start a business to collect those tickets, which are so old and difficult to track down they are returned to the city.
"I was thinking to myself at the time," Muhammad recalled recently, "'How can somebody locally try to make a dent in whatever portion he can and serve the purpose of employing people? I know people who are bondable, trustworthy, don't use drugs, don't smoke, don't drink.'
"I thought, 'Man, this can work.'"
Muhammad, who reportedly has several years of experience in the collections business, says he received no response from Lanier's office. Then, at the NAACP Freedom Fund Banquet in early November, Muhammad raised the proposal in an informal chat with the mayor, who suggested that he resubmit his plan. The NAACP function was held at about the same time as another gathering, this one on November 3 in Hall's office. At the meeting were representatives of West Capital, who were told by Miller and Hall that the company was in danger of losing its contract. How West Capital could avoid that fate was spelled out the following day in a letter faxed from the city attorney's office to West Capital president Mike Joplin.
According to the letter, one of the problems West Capital allegedly had was with its affirmative-action plan. "They didn't have the minority component here in Houston doing anything in terms of meaningful collections, except in a support role," Hall says. "They had to improve their minority participation here so that local people could actively collect the tickets."
However, the city's original "request for proposal" for the contract said nothing about assigning specific duties to minority subcontractors. Moreover, a report presented by West Capital in May shows that from August 1993 through April 1994 the company paid more than $189,000 -- or about 25 percent of its fees -- to businesses owned by women and minorities; 21 percent, or about $153,000, was paid to Houston firms (the city's minority-participation goal on such professional service contracts is 19 percent).
But the real problem with West Capital, according to Hall and Miller, is the amount of revenue the company has produced for the city. "I was unhappy with the numbers that were coming in," Miller says. "I told West Cap the amount of money that I had to have per month, net to the city, and that they had to do that or we're going to have to go somewhere else."
In its November 4 letter to Joplin, a copy of which was provided to the Press by Hall, the city demanded that West Capital immediately increase its monthly net revenue to the city to $175,000. That was at least the third increase in revenue demanded of West Capital since it was awarded the contract.
Yet while the city kept demanding more revenue, data provided by Miller shows that the municipal courts department was simultaneously decreasing the number of delinquent tickets given to the company to collect.
From January through June, West Capital was assigned 245,879 new delinquencies to collect. West Capital's net revenue to the city during that period averaged about $170,000 a month -- more than enough to meet the city's original standards. However, from July through the first half of this month, the number of assigned delinquencies to West Capital dropped almost 60 percent. As a result, average monthly revenue to the city dipped to about $107,000; in November, the city's net gain on the West Capital contract was a paltry $48,268.