'Oversights' disclosed in $3M BP grant

D'Iberville paid Maxwell-Walker firm $180,000 finder's fee

meperez@sunherald.comJanuary 26, 2013 

D'IBERVILLE -- City officials say it was an "oversight" that the council didn't know about a contract with Maxwell-Walker Consulting Group to secure a BP grant for D'Iberville that would net the firm a finder's fee.

City Manager Michael Janus said Scott Walker, a partner in the consulting firm with Pascagoula Mayor Robbie Maxwell, approached him in 2011 and said he might be able to get the city a grant.

Janus said he had written three letters to Gov. Haley Barbour's office in an attempt to get funding, with no success, and decided to let Walker's firm try to get money provided by BP after the oil spill.

The grant proposal submitted on behalf of the city was to fund a portion of D'Iberville's contribution to Ocean Expo, an aquarium attraction.

Maxwell-Walker also was working at the time as a consultant for the Institute for Marine Mammal Studies, which proposes to build Ocean Expo in D'Iberville.

Walker's mother, Sharon Walker, is director of education and outreach for IMMS.

When the Mississippi Department of Environmental Quality notified the city Dec. 2, 2011, that D'Iberville

would receive a $3 million grant, Janus said he went to the council and explained the situation.

"It was an honest oversight on my part," Janus said. "We did have a contract but it was not ratified by the council."

No money was involved in the agreement with Walker until the firm was able to secure funding, he said.

"The six council members knew nothing of the agreement until after the grant was received," said city attorney W. Fred Hornsby III. The council could have chosen not to pay Maxwell-Walker, he said, but agreed to give the firm the standard 6 percent finder's fee of $180,000 for the grant.

The payment to Maxwell-Walker was not discussed in an open council meeting, only in executive session, Janus said.

Rather than putting a resolution for payment on the budget, it was added to the Dec. 20, 2011, docket of claims with the city's other bills.

D'Iberville Mayor Rusty Quave, a contract employee of the Department of Marine Resources, voted with the other council members to approve the bills, essentially paying the son of his boss. Scott Walker's father is recently fired DMR Director Bill Walker.

"The mayor did vote for the docket. Another oversight," said Janus. "He could have recused himself."

Quave said, "If I would have known about it I would have definitely recused myself." He was absent from the Dec. 6, 2011, meeting when the council voted on a sub-agreement with MDEQ that laid out the requirements for the grant. Quave said the item was labeled "Maxwell-Walker" on the docket of claims and he missed it.

Friends, business partners

Janus said he sees no conflict of interest with Maxwell-Walker working on behalf of D'Iberville. He and Walker have been business partners in JaWa Investments LLC since 2010 and Janus said he did not personally benefit from the grant Walker secured.

"Maxwell-Walker is good at what they do. We're happy with their success. It's all for the city's benefit," Janus said.

Janus and Walker also are investors in Columns at 132, a bar in Biloxi. Among the other investors in the bar have been Hornsby, who said he had a 6 percent interest in the business, lost money and has since gotten out of the business, and David Rothbart, who was hired as court administrator for D'Iberville in March.

"The council did approve that," Janus said of Rothbart's contract. He serves as a consultant rather than a city employee and Janus said he earns $20,000 a year -- "peanuts for what he does."

Based on Rothbart's experience in courts and law enforcement, Janus said he was the person to make the court department more professional.

"Yes, he is a personal friend of mine," Janus said of Rothbart. "Scott (Walker) has been a friend of mine. Dub (Hornsby) and Mr. Rothbart -- "we're all friends. At the end of the day we work together."

$3M must be spent soon

D'Iberville faces a July 1 deadline to use its BP grant. Janus said the city has spent $1.3 million of the $3 million grant for engineering, land acquisition and other costs associated with Ocean Expo. In January, the city submitted a federal grant application to the U.S. Economic Development Administration for about $4 million to fund the infrastructure work at Ocean Expo, and plans to use the remaining money from the BP grant as the 50/50 match, he said.

"We're hoping to hear something soon," he said.

The Economic Development Administration, an agency of the U.S. Department of Commerce, encourages innovation and regional collaboration, according to its website.

If the federal grant isn't approved, Janus said the city then will have to quickly use the money for additional land acquisition and other Ocean Expo expenses.

Moby Solangi, IMMS director, said he had Maxwell-Walker on retainer from 2008 until September, and paid the company about $5,500 a month to help find a site and funding for Ocean Expo.

"Maxwell is a good friend," Solangi said, adding Walker joined the consulting firm after Solangi retained Maxwell.

3 cities in bidding war

Solangi said it was his idea to get officials from Gulfport, Biloxi and D'Iberville to compete to be the site for Ocean Expo and Maxwell-Walker met with officials from the three cities.

Scott Walker presided over the meeting in March 2010 to announce D'Iberville had won the competition, and both of his parents spoke during the event.

D'Iberville was chosen because of the site, which is out of the velocity zone and along the interstate, Solangi said. The city agreed to acquire 8.5 acres, construct saltwater transmission lines from the Back Bay to the aquarium, build an access road and pay for water and sewer upgrades.

"We're confident we're going to get the Ocean Expo up and built," Janus said.

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