A new audit says Kansas City acted improperly in 2007 when it gave minority enterprise status to a construction company owned by a prominent lawyer.
The decision — involving a company called TWS Technical Services LLC — potentially cost “legitimate” minority businesses millions of dollars in contracts, the study says.
TWS was founded by William Session, a well-known Kansas City attorney. In 2008, the firm signed contracts worth almost $11 million to perform excavation work for the CenterPoint project, a multimillion-dollar rail and trucking port on the site of the old Richards-Gebaur air base.
The city’s decision to certify TWS as a minority business enterprise, or MBE, was crucial because it allowed CenterPoint’s developers to reach minority hiring goals for the project.
But Kansas City Auditor Gary White told a City Council committee Wednesday that the city should have never given the firm MBE status because it didn’t have the necessary experience.
“TWS was not ‘qualified’ under the city’s MBE ordinance to perform excavation, hauling, grading and sewer construction,” the audit found.
The company had little equipment, auditors found. Further, Session said he worked eight hours a day on his law business and then another eight hours daily on the construction firm, raising questions about his control of the company.
Session, who is African-American, did not respond to an email requesting comment.
But Jim Kissick of Kissick Construction, who worked with TWS on the CenterPoint project, said he disagreed with the audit’s conclusions. TWS, he said, was “absolutely” a legitimate minority business.
But City Council members were critical of the MBE designation.
“It’s very, very disheartening that the city allowed this to happen,” finance committee chairwoman Jan Marcason said after the audit presentation.
There were “obvious red flags” that the city chose to ignore, she said, preventing opportunities for legitimate disadvantaged companies that should have received the work.
City officials told council members that several changes have been made since 2007 to improve the MBE designation process.
Session’s role with TWS became a central issue in the 2011 mayoral campaign, and eventually the subject of a federal inquiry, after The Star revealed several details of the CenterPoint project in 2010.
At the time he ran TWS, Session also served as the lawyer for Kansas City’s Port Authority. The Port Authority — and Session — had actually negotiated the CenterPoint development agreement, including the very minority hiring goals that Session’s construction company helped meet.
Several city officials, including then-mayor Mark Funkhouser, criticized Session’s dual roles, calling them an obvious conflict of interest. Officials with the Economic Development Corp., which then supervised the Port Authority, also criticized Session’s connections with both the authority and the construction work.
Session was not retained as the Port Authority’s lawyer, and its chairman resigned. The City Council asked for the audit that was finally made public Wednesday.
The U.S. attorney’s office investigated the contracts in late 2010 and found no wrongdoing.
TWS and Kissick Construction later had a major falling out over their work on CenterPoint, leading to a lengthy legal battle.
An arbitrator ordered TWS and Session to pay Kissick more than $600,000, a ruling upheld this year by the Missouri Court of Appeals. The Missouri Supreme Court has declined to hear the case.