More drama over KCI single-terminal project as another conflict of interest is alleged

A lawyer representing Burns & McDonnell in its pursuit of the Kansas City International Airport single-terminal project has demanded that the city fire another lawyer advising the Kansas City Council on selecting a proposer for the $1 billion contract.

David Frantze, a lawyer for Terminal Developer LLC — a joint venture between Burns & McDonnell and its financing partner for the KCI project, Americo Life — claimed in a scathing letter sent to City Hall on Monday that one of the city’s outside lawyers had a conflict of interest because he once represented a competing proposer.

Frantze’s letter said that Charles Renner, a Husch Blackwell lawyer in Kansas City who specializes in public-private partnerships, represented Edgemoor Infrastructure & Real Estate when the Bethesda, Md.,-based developer won a contract with the University of Kansas to carry out a major buildings and facilities project at its Lawrence campus. Edgemoor is one of four proposers for the KCI terminal work.

Frantze’s letter said the relationship was never disclosed and it “creates a horrible conflict of interest that has tainted the selection process.” The letter also demands that other advisers who have worked on the KCI terminal project with Husch Blackwell be fired, which would include financial advisory firm Ameritas.

“Obviously, we are still learning details about Mr. Charles Renner’s relationship with one of the proposing firms,” Burns & McDonnell said in a statement late Monday. “The non-disclosure of this relationship certainly gives the appearance of impropriety. In order to preserve the current selection process, we urge the City to remove Mr. Renner’s team from the selection process, immediately. We also ask that the City disregard any work or advice the City may have received from Mr. Renner and his team to preserve the appearance of an open and ethical selection process.”

Renner said Monday that he was aware of the letter from Frantze but was not concerned about any conflict of interest relating to his legal work on the airport selection process.

Renner acknowledged that he did legal work on the Edgemoor project at KU but said that work ended in May 2016. The engagement was also listed in a May 17 pitch to City Hall by Husch Blackwell for legal services in connection with the KCI project, so it was disclosed at that time.

He also pointed out that his firm, Husch Blackwell, had Burns & McDonnell as a client until close to the time when the law firm was hired in May of this year to advise the city council and the selection committee on picking a winning firm for a new airport terminal. He said Husch Blackwell’s work for Burns & McDonnell concluded before Renner started working on the airport selection process.

Renner said none of that prior legal work by him personally or his firm had anything to do with the Kansas City airport, and in no way would it influence “our objectivity or our work” with the airport selection committee.

City Attorney Cecilia Abbott said Tuesday morning that she was still researching the matter but she did not see a conflict of interest.

She cited the relevant section of the city’s code of ordinances, which simply prohibits the city from “contracting for professional services with any attorney who, at the time of the issuance of the contract, either in an individual or firm capacity, represents any party in litigation against the city.” That is not the case with Renner and Edgemoor.

“This is a non-related client matter that terminated in May 2016,” Abbott said.

Quinton Lucas, a Kansas City council member who wrote an ordinance to seek outside legal help for the KCI procurement process, said he saw no conflict of interest, either.

“Eleventh-hour removal of the outside legal team in a process that is substantially complete does not seem to address Mr. Frantze’s concerns about harms already sustained,” Lucas wrote in a Tuesday morning memo to City Manager Troy Schulte. “The most cautious approach would be to terminate the procurement process altogether and start over. At times, I am very sympathetic to that approach, but note Mr. Frantze did not make such a request here.”

This latest claim of conflict of interest comes as the KCI selection committee was set to meet on Tuesday morning with the expectation that it could announce a recommended proposer publicly on Thursday.

It’s not clear as of Tuesday morning how Burns & McDonnell’s complaint against Renner and Husch Blackwell could affect the timeline of a selection process that has been highly competitive and increasingly acrimonious.

Renner did not think this latest allegation would derail those deliberations. Nor did he think the matter would have to go to the municipal ethics commission, which he said is more geared toward considering complaints against elected leaders.　

“We are proud of the very detailed, analytical and objective work undertaken by the selection committee and by all supporting team members in providing and protecting a fair, equal and objective process,” Renner said. “The City is well positioned to make a valid decision on this important issue.”

This is the second conflict of interest allegation to surface relating to the KCI project in the past two weeks. The previous complaint set City Hall’s timeline for announcing a recommended proposer back a week.

That first conflict of interest claim involved Kansas City law firm Shook, Hardy & Bacon’s representation of Burns & McDonnell in a legal dispute with a private airport in Branson, Mo., which had alleged in a lawsuit filed in 2013 that Burns & McDonnell did shoddy work on a runway project. That case settled in 2016.

Jolie Justus, a Kansas City council member who is also on the KCI selection committee, works for Shook, Hardy & Bacon as the pro bono director. An ethics complaint was filed against Justus, but was quickly dismissed by the Kansas City Ethics Commission. The ethics commission determined that Justus stood to gain no personal or financial benefit from her law firm’s work with Burns & McDonnell.

Also last week, Kansas City Mayor Sly James called out a consultant with the AECOM-led KCI Partnership for being seated during a Kansas City Council meeting the week before with his arm around an aide of Kansas City council member Katheryn Shields.

James said the encounter did not look good to him; Shields said that her aide did not know at the time that the consultant had a connection with KCI Partnership.

This is a developing story. Check back to kansascity.com for further updates.

This story was originally published September 5, 2017 at 7:16 AM with the headline "More drama over KCI single-terminal project as another conflict of interest is alleged."