World's Busiest Airport Fueling Political-Campaign Intrigue

(Bloomberg) -- Travelers moving through the world’s busiest airport probably don’t know they’re feeding the quiet financial engine of Atlanta politics when they drop their money on the Kentucky bourbon on Concourse T, the peppered goat cheese and honey on F, or the neck pillow and paperback thriller on C.

They are, though, and this year, with nine major candidates vying to replace Atlanta’s term-limited Mayor Kasim Reed in an election Nov. 7, the role of Atlanta’s Hartsfield-Jackson International Airport’s political money has sprung messily into public view.

Airport vendors --including contractors, engineers and concessionaires -- or would-be vendors have provided about a third of the money raised by candidate Keisha Lance Bottoms, who is endorsed by Reed. Meanwhile Reed and another candidate, City Council President Ceasar Mitchell, have been feuding over who should control airport contracts that don’t expire until late next year. Another candidate, former Bain & Co. partner and ex-city COO Peter Aman, took the unusual step last month of publicly outing the vendor-political money tree. He said a political operative tried to school him on the mutual back scratching rules for tapping it.

“It was appalling, in terms of the connection between the vendors at the airport and the money and the influence,” Aman said in an interview.

With more than 104 million passengers last year, Hartsfield-Jackson is the most trafficked airport on the globe, followed by Beijing and Dubai. The city of Atlanta owns it, and controls the billions in contracts tied to it -- for engineering, construction and design work, parking, shuttle service, advertising along its concourses and the concessionaires who run its shops and restaurants.

Concessions Worth $1 Billion

It’s big money. Airport management predicts spending $6 billion over the next two decades on improvements, under a plan dubbed ATLNext. It includes a new 10-gate Concourse G at a cost of $983 million and a new $943 million sixth runway. The airport is also planning to replace two massive parking decks at a cost of $665 million, build a $500-million complex with a four-star hotel on the site of Hartsfield’s current economy lot and a new curbside canopy as part of a $383 million terminal improvement project.

Then there’s the captive market waiting for flights. This year, gross sales in airport concessions topped $1 billion in a calendar year for the first time. The concessions universe includes large contractors who choose which restaurants line concourses, as well as their partners, subcontractors and -- important in Atlanta -- their minority subcontractors. City requirements for bringing minorities into the vendor mix have made some subcontractors rich.

Breakfast Bribes

Airport money has helped fuel Atlanta politics for decades and has sporadically delivered scandal. In the 1990s, one airport contractor admitted slipping hundreds of dollars to a city councilman every Thursday at breakfast. Another councilman was a secret subcontractor for a vendor while voting to lower the vendor’s airport rent. A former mayor went to prison in 2006 on tax charges related to alleged funny business with runway dirt. A federal jury delivered a $17.5 million judgment in 2010 to an Atlanta company that said the city had allowed Clear Channel Outdoor Holdings Inc. and a city-favored minority subcontractor to control airport concourse advertisement without bidding for 30 years. Airport vendors continued to fund campaigns all along.

This year’s mayoral race has already drawn attention because of race. Atlanta hasn’t had a white mayor since 1974. Bottoms, who is black, moved ahead of council woman Mary Norwood, who is white, for the first time in a poll released last week. The Nov. 1 poll showed Bottoms with 25.4 percent of the vote in the crowded field, in first place for the first time. It also showed her with nearly 45 percent of the African American vote, in a field where four other prominent African American politicians are also competing.

Aman, also white, is third, according to Mark Rountree, owner of Landmark Communications Group, a Republican firm that did the polling with local media. The race will almost certainly go into a runoff. Rountree gives Bottoms a good shot at the final prize, in part because she’s run well and in part because African American women make up the biggest share of likely voters.

Airport money went to Bottoms early, although some vendors hedged their bets. For instance, in the first reporting period Hojeij Branded Foods, with restaurants near busy Delta Air Lines gates, gave $10,000 to Bottoms and $2,000 to Mitchell through the company, its executives and family members. By the end of September, those HBF-linked contributors along with the company’s subcontractors and other business partners had donated $53,000 to Bottoms’ campaign.

HBF, which is owned by Morgan Stanley Private Equity and operates in 34 airports, said in a statement prepared by a public relations firm that, "the company was founded over 20 years ago in Atlanta and has always supported candidates in the city. Sometimes those candidates win and sometimes they don’t."

$300,000 to Bottoms

Bottoms benefited disproportionately from airport-vendor money, according to an analysis prepared by Aman’s campaign and confirmed by Bloomberg. The money came from current, former and would-be airport concessionaires, contractors, subcontractors and partners, their executives and family members, including people who won bids and lost them. In all Bottoms got more than $300,000 of that money, most of it in two surges in January and September. Bottoms’ campaign did not respond to questions about airport-vendor contributions.

Landmark Communications’ Rountree said the role of airport money shouldn’t be exaggerated. It stands out “because it’s sort of a monolithic donor base. You have other donors, and maybe one industry is interested in insurance and one is interested in IT. But with the airport, they all have similar interests, and they all want to have a good relationship with whoever they think is going to win.”

“It doesn’t mean there is a quid pro quo,” he said. “It does mean there’s a quid.”

Despite an ongoing federal probe of city contracting in general, the role of airport money stayed behind the scenes until August, when Mayor Reed, the Bottoms backer, started to re-bid airport retail contracts not due to expire until late 2018. He said the timelines, with award recommendations by the end of this year, was “driven by people who are concerned about chaos after the upcoming mayoral election.”

The airport’s general manager, Roosevelt Council Jr., also supported the timeline, according to a statement forwarded by Reed spokeswoman Jenna Garland last week.

Candidate Mitchell tried to stop it, calling to delay awards of “the multi-year, billion dollar airport concessions contracts that do not expire until well over a year from now, which is long after this Administration and this City Council leave office.”

Reed responded with a Tweet, calling the proposal Mitchell’s “personal donor protection plan.’’

Mitchell, through a campaign spokesperson, called the fact that he has received contributions from two out of 10 potential vendors "wholly adequate and acceptable, especially considering my 16 years of service."

‘How the World Works’

In September, in a probe apparently unrelated to the airport, the city’s former procurement officer pleaded guilty to bribery, putting all contracts in the spotlight.

Referring to that investigation, Mitchell’s campaign said, "At a time when the City is under a massive federal investigation into bribery and conspiracy, in which the U.S. Attorney said corruption is ‘prolific,’ it is time to stop non-emergency contracts that don’t expire until next year, especially the ones related to the airport.

"We need to immediately implement an audit of our procurement system and put everything online for the public to view," the campaign said.

Following the procurement officer’s guilty plea, Aman came forward with his tale. An active political player had tried to teach him “how the world works,” suggesting that he could get vendors together to fund him if they felt Aman “thought similarly to them and had good reason to feel that way,” Aman said.

The disclosure got Aman some last minute attention, not all of it good. Other candidates said he should have gone to the FBI.

Aman said the advice wasn’t an offer: “It was like someone explaining the birds and the bees.”

(Corrects to reflect that the person giving advice to Peter Aman was a political operative rather than a supporter)

(Updates with latest poll numbers in paragraph nine)

To contact the reporters on this story: Margaret Newkirk in Atlanta at mnewkirk@bloomberg.net, Michael Sasso in Atlanta at msasso9@bloomberg.net.

To contact the editors responsible for this story: Anita Sharpe at asharpe6@bloomberg.net, Flynn McRoberts

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