By Gordon Russell, Staff writer
Copyright 2006 The Times-Picayune Publishing Company
Two years before Hurricane Katrina struck, Mayor Ray Nagin held a triumphant news conference to announce the city had landed a $7 million federal grant to build a system allowing first responders in the eight-parish metropolitan area to communicate during a disaster, regardless of what brands of radios or what frequencies they used.
New Orleans was one of 14 cities nationwide to win such an award. The architect of the proposed system was Grant Holcomb, a former Marine Corps major who had devised similar technology during Operation Desert Storm and who became Tulane University's director of biomedical informatics. Tulane was to administer the grant.
But as anyone who paid attention during Katrina and its aftermath knows, the system wasn't in place when the storm laid waste to the city. Instead of full "interoperability," the city's communications systems were either completely on the fritz or operating in individual vacuums, with police in one district unable to talk to those in another.
Congressional inquiries blamed the communications crash for many of the problems that ensued in the early days. Indeed, the collapse of the radio systems almost certainly contributed to the death toll.
While it's clear that the technology touted in October 2003 was never put in place, the reasons why it wasn't are muddier. This much is known: The initial proposal went down in flames, in large part due to allegations by some city officials that Holcomb had a conflict of interest that might have allowed him to profit unduly, an allegation Holcomb denies. There were also concerns from Greg Meffert, Nagin's chief technology officer, that the technology wouldn't work, concerns Holcomb also says are unfounded.
Long after the initial grant was approved by the U.S. Department of Justice, city officials rewrote their application. The new system, which mostly involves the purchase of new radios and towers, connects the city with Jefferson, Plaquemines and St. Bernard parishes: half the eight-parish area originally included. With a new hurricane season little more than two weeks away, the upgraded system is still not in place. City Homeland Security Director Terry Ebbert says it's progressing and that eventually the system will extend statewide.
The story of what happened to the city's original plan, all but ignored since the 2003 news conference, has resurfaced in the mayoral campaign. The conservative talk radio station WIST has had Holcomb on as a guest several times. WWL-TV aired a story, and businessman Rob Couhig, who finished fourth in the mayoral primary, raised the issue in a debate, accusing Nagin's administration of botching the grant. Nagin brushed aside the comment, saying his aides did the right thing by reprogramming the money after discovering Holcomb's conflict.
The original grant was to have financed a communications network that featured three levels of redundancy, so if one level failed, others would continue to work.
The first level involved radios that area agencies now using 75 different frequencies could use to talk to one another. A second level of communication would be provided through eight self-sufficient mobile radio systems that could have been set up in less than an hour, Holcomb says. The last level of redundancy, and the one that would prove controversial, though it was the least important in Holcomb's view, involved using desktop computers so decision-makers could communicate by e-mail and instant messaging as well as by radio and cell phone.
The controversy revolved around the software that would enable the system. It was to be provided by a subcontractor, Colorado-based Exos Services, for about $1 million of the $7 million contract. Holcomb held a roughly 5 percent stake in Exos, an arrangement that he says is normal and ethical, provided it is disclosed. Most of that payment to Exos was a "pass-through" that would have paid for local programmers and a project manager to oversee federal audits, Holcomb said.
Some city officials, including Ebbert, knew of Holcomb's stake in Exos. But others didn't. Meffert, who said he didn't know about the grant until its announcement, asked then-City Attorney Sherry Landry for an opinion on whether Holcomb's financial stake posed ethical problems.
Around the same time, Meffert asked BearingPoint, a national technology firm with a branch in New Orleans, to render an opinion about whether the technology described in the grant application would work.
Landry concluded that the ethical issues were serious enough to warrant review by the federal Department of Justice. In a letter dated Jan. 12, 2004, she asked whether Exos' participation, which she said was further complicated by Holcomb's role in helping prepare the application, violated federal or local procurement practices, which require seeking competitive proposals. Because the services in question were considered "professional services," the city had wide latitude in selecting its preferred vendor.
Justice Department lawyers replied in a long and murky letter concluding that if city officials felt their own procurement practices hadn't been followed, they should seek proposals for the services in question.
Meanwhile, the BearingPoint report came back raising questions about both the technology -- calling it "unproven" -- and Exos' ability to deliver it. The report also suggested Holcomb had a conflict of interest.
Soon afterward, the deal was dead. Though Tulane offered to participate in a competitive-selection process for the portions of the grant deemed problematic, the university "never heard back from the city," according to Tulane spokesman Mike Strecker.
And rather than overcome their ethical concerns by inviting competitive bids on the communications system they had once lauded, city officials decided to "re-scope" the grant, which took more than a year. Final approval from the Justice Department on the new use of the grant money didn't come until May 2005. Implementation of the grant had hardly begun when Katrina made landfall.
Spiteful city official?
To Holcomb, Meffert's actions were irresponsible and possibly tainted by spitefulness and pressure from rival technology companies. He maintains that Meffert went out of his way to torpedo the grant and offers a couple of theories why he might have done so: One, Meffert was angry because the grant involved technology but was being handled by Ebbert rather than him. And two, he got pressure from vendors who didn't like Holcomb's system because it didn't use their products.
In particular, Holcomb believes pressure came from Microsoft, the software giant with which Meffert had established a relationship. Early in his City Hall tenure, Meffert announced that Microsoft would help make New Orleans a "city of the future" by providing free computer upgrades and software.
As evidence of Meffert's devotion to Microsoft, Holcomb referred to a meeting he and some Tulane employees had with Meffert shortly after the grant was announced. At the meeting, he claims, Meffert referred to angry vendors, in particular Microsoft.
Though a fellow member of Nagin's executive staff, Ebbert made the same point last month on WWL-TV.
"I think the people who applied pressure to this system were large industrial giants who own radio communications in America," Ebbert said in the interview. Ebbert also told the TV station that he had had a "heated exchange" with Meffert over the deal.
In a more recent interview with The Times-Picayune, Ebbert declined to talk about what went wrong, steering the discussion toward efforts to implement the "re-scoped" grant. "Nothing can be done crying over spilled milk," he said.
Meffert says Holcomb's claims are preposterous. He said Microsoft and other large vendors exerted no pressure on him, and would not have. For companies of that size, he said, a $7 million grant is chump change.
Holcomb counters that his system, if implemented successfully, could have been copied by jurisdictions across the country, creating a lucrative market niche.
As for Meffert's contention that the system was "based on unproven technology," Holcomb noted that "demonstration grants" of the type offered by the federal government for implementation of his system are specifically aimed at funding new solutions, rather than those available off the shelf.
Meffert, who broke into an Office Depot shortly after Katrina's winds subsided to commandeer equipment for a primitive but operational "wi-fi cloud" that bolstered communications a few days after the storm, believes he saved the city from embarrassment by putting the grant under the microscope.
Had the grant gone ahead, the city might have had to repay the money once auditors got wind of Holcomb's double-dipping, Meffert said, adding: "You have multiple laws being broken here."
"No good deed goes unpunished." Meffert said. "I'm getting stuck with someone else's bar bill here."
The question of whether the participation by Exos in the grant raised an ethical problem is a sticky one. What is clear is that Holcomb doesn't believe it did, and that he never made any effort to hide his interest in the firm.
"You eliminate perceptions of conflicts of interest by disclosing them," he said.
The City Hall paper trail makes clear that, at a minimum, Ebbert and the city's lead grant-writers, Rebecca Grenn Queen and Gloria Connolly, knew about Holcomb's stake. Tulane was also aware of the arrangement, records show.
In an interview with the Denver Post, published shortly after the grant award, Holcomb noted that he was Exos' "chief scientist" as well as Tulane's point person on the interoperability grant.
"If I'm doing something illegal, why would I tell the press?" he asked rhetorically. "Why would I put (my interest in Exos) in a spreadsheet? I was following the law. I had an award from the federal government. If I was doing something illegal, why wasn't I fired?"
Holcomb left the university on good terms in May 2004, Strecker said, a few months after it became clear that the grant money wasn't coming through.
Though Holcomb insists his interest in Exos was above board, he said he would have divested himself of it at the city's request. Holcomb said he wasn't in line to make a lot of money.
"Literally every penny of Exos' money was passing through" to programmers and others, he said. "This wasn't going to get me anything. But if it was such a big issue, why not ask me to give up the stock?"
Another option, he said, would have been for the city to request proposals for the portion of the grant involving services that were to be performed by Exos. Gilbert Moore, a spokesman for the Department of Justice's grant program, said there was no reason the city couldn't have replaced Exos or conducted a competitive-selection process.
"If they had decided to change their vendor . . . there's nothing in our rules that says they can't do that," Moore said.
Meffert said that was the initial plan, but that "there was a legal opinion that you couldn't do that."
Setup not unusual
Bill Winslade, who teaches medical ethics at the University of Texas Medical Branch in Galveston and who is an expert on conflict-of-interest issues, said anything about the original arrangement that struck the city or the federal government as untoward could probably have been remedied.
"Every time a university enters into a contract with a drug company or a technology company, you have to deal with questions of conflicts of interest, because a lot of people have interests in technologies that they're researching," Winslade said. "But there are many different ways to manage apparent and real conflicts of interest in such a way that the conflict can be dealt with, so that there isn't any violation of anything."
For instance, Winslade said, the feds could have determined that Holcomb's stake in Exos wasn't large enough to warrant concern, or they could have asked him to sell his share.
"They have to make sure the person with the financial interest isn't in a position to get an unfair advantage, that the control over the contract is properly in the hands of the agency that is managing it," he said. "That's why we have to have the disclosure, so we can manage the conflict. But it does require sometimes a little more bureaucratic imagination than some institutions have."
"Somebody may have mistakenly believed there was self-dealing involved," Winslade concluded. "It may be that the city overreacted to the DOJ letter."
Though he's not saying so now, Ebbert appeared to agree in his WWL-TV interview, in which he expressed regret that the grant -- "a very important project," in his view -- had been scuttled.
"I think it should have gone through," he said. "I think we would have been ahead of the game. I think we'd have probably had the first truly interoperable communications system in America."
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Gordon Russell can be reached at firstname.lastname@example.org or at (504) 826-3347.
New Orleans 911 radio grant ran into dead air