Chris Korge Rides Again

Doing the phone card shuffle at MIA

Despite the efforts of Miami-Dade Aviation director Angela Gittens to reform Miami International Airport, the brewing set-to over a prepaid phone card vending contract shows that it's business as usual at MIA. Contracts get awarded to individuals with the most political juice; prominent among the rewardees is big-time lawyer/lobbyist Chris Korge.

The millionaire Korge is well known in political circles, raising campaign cash for the Democratic National Party and local politicians, including county Mayor Alex Penelas and former (and recently indicted) county Commissioner Miriam Alonso. And Korge, who did not return phone calls seeking comment, is a veritable renaissance man when it comes to getting a piece of the action from public contracts awarded at MIA.

Over the past decade, Korge has assisted major corporations and local firms in winning lucrative airport contracts. He, along with lobbyists Rodney Barreto and Eli Feinberg, represents Dade Aviation Consultants, a consortium of private engineering firms paid $15 million a year by the county to oversee MIA's massive $5 billion construction program. Korge and his partners have received roughly $1.3 million in lobbying fees from the consortium to simply curry favor with county commissioners and bureaucrats.

Another noteworthy Korge client is Host Marriott, a national company that operates 70 percent of the food and beverage concessions at MIA, which generate an estimated $40 million in sales. Korge's reward for helping Host win and maintain the contract: ten percent of the company's profits from the MIA concessions. State and federal investigators are examining Korge's role in the agreement to determine if he and Host skirted federal laws on minority hiring at airports.

Now Korge is leading a foray into telecommunications; he's teaming up with client Ed Meegan, principal of WTN Inc., a company based in Richmond Hill, New York, to sell prepaid phone cards in MIA's terminal and concourses. Under a three-way partnership called WTN/Blackstar LLC/CKOR Vending, Korge and Meegan won a new contract to be the sole prepaid phone card providers at the airport, pending county commission approval. The third partner is John Oxendine, a black TV and radio station venture capitalist who is accused by the competition -- Latin American Enterprises, or LAE, and Communitel, two rival Miami-based telecommunications firms -- of being a minority front for Korge and Meegan. The two firms accuse the county's aviation department of unduly favoring WTN et al. because of Korge's influence. Korge, Meegan, and Oxendine would have won the new contract outright last month if not for strong objections by LAE and Communitel. "Their decision to award the prepaid phone card business to WTN once again demonstrates the serious problems afflicting Miami International Airport," growled Pedro Pelaez, owner of Communitel, which placed third behind WTN and LAE in a competitive bid process called an Invitation to Bid, or ITB. "The whole process is a joke!" A bid protest hearing, in which the county conducts an internal review of the ITB, was scheduled for February 12. After that, the matter goes to the county commission for approval.

An ITB is a competition for public contracts based solely on the best price offered by a bidder. WTN offered the county a guarantee of $1,089,312; LAE offered $1,081,495; and Communitel offered $1,080,000. But in order to qualify for the ITB, companies are asked to submit crucial information. WTN was allowed to circumvent some of those criteria.

For example, Pelaez and Miguel de Grandy, the lawyer-lobbyist representing LAE and its owner, Argentine businessman Juan José Pino, complain that airport staff did not disqualify WTN, as required, after the partnership refused to submit an audited financial statement; the statement would have determined whether Korge and his colleagues had the financial wherewithal to run their business.

According to public records, Korge informed airport staff that WTN "cannot justify the inordinate cost [$15,000 for LAE] of preparing audited financial statements, [and as such] WTN will not provide such statements." Assistant county attorney Abigail Price Williams determined on November 8, 2002, four months after bids were submitted, that WTN should not be disqualified for refusing to produce its audited financials. "This creates the appearance of favoritism for WTN that my client didn't have," asserted de Grandy, LAE's lawyer. Communitel and LAE did provide the required statements.

WTN's proposal also should have been disqualified based on Korge's decision not to list his other business interests (the food and beverage deal and the construction contract) at the airport. Under the bid rules, companies are asked to detail their involvement, directly or indirectly, in any other airport contracts.

But apparently this doesn't apply to Korge, who put down "not applicable" in WTN's proposal. In another show of favoritism, Pelaez claimed, the Miami-Dade County Aviation Department extended the deadline for bidders to submit their proposals from July 10, 2002 to July 17, 2002. Coincidentally, Korge did not incorporate CKOR Vending until July 10. Pelaez asserts the deadline was obviously extended to accommodate Korge.

Regarding the accusations about John Oxendine, Pelaez and de Grandy allege that the county's Department of Business Development ignored its own procedures in certifying Oxendine's firm, Blackstar LLC, as a disadvantaged business enterprise (DBE), a program used to set aside portions of county contracts for minority firms. In order to qualify as a DBE, firms must offer proof that they are conducting business. They must provide the county with executed contracts and utility bills, and demonstrate that they are fulfilling a "commercially useful function." When Blackstar was certified as a DBE in May, Oxendine had not provided any of the required information. In fact Oxendine listed his residential condominium in West Palm Beach as his business address and had not set up a business phone line for Blackstar. He got the certification nonetheless. Yet the county continues to deny certification to other businesses that fail to submit the proper documentation, according to public records. "It is obvious that Mr. Oxendine is a front," Pelaez complained. "The same day Oxendine [got] the DBE certification was the day he incorporated Blackstar," de Grandy chimed in. "It's a total perversion of the county's minority program."

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