City Kills Contracts With American Sewer

Embattled city contractor American Sewer Services has reached a tentative deal with the City of Milwaukee to terminate two of their contracts.

American Sewer has come under intense scrutiny following the discovery of their employees openly carrying firearms on a job site on November 30th. That scrutiny was amplified after another firm employee was spotted with a cooler bearing stickers representing the Confederate flag and Ku Klux Klan, and further escalated when the firm’s owner Dennis Biondich failed to appear before a city committee.

Department of Public Works Commissioner Ghassan Korban told the Public Works Committee that “given the seriousness of the issue and the importance of holding our contractors accountable,” he has reached a tentative deal with American Sewer to terminate two contracts worth a combined $800,000. Since 2013 the firm has received approximately $50 million in city contracts.

The settlement would include a provision that American Sewer not rebid on the work and waive their rights to contest the terminations. “I want to ensure that whatever action I take has a sign off from the contractor. So it’s final and not subject to action. If I terminate a contract it’s done and we’re moving on,” said Korban.

Korban analyzed the 11 open contracts the firm has with the city to reach the deal. Five of the seasonal contracts are effectively complete and just awaiting final payment or approval. The remaining six were examined for how much work was left and who was scheduled to do it. Korban noted that, since city contracts include provisions that require hiring minority-owned firms and underemployed or unemployed city residents for some of the work, “what is the point of taking work away from people who really weren’t related to these incidents?” Korban added that he also considered whether cancelling the work would negatively impact the city

Korban’s settlement proposal came after Alderman Russell W. Stamper, II introduced a resolution to terminate all of the firm’s contracts. But Stamper supports the compromise measure.  “I want to thank the commissioner for understanding, recognizing and realizing the importance of what occurred,” Stamper said. The settlement also drew the support of committee chair Robert Bauman, with the alderman stating he preferred a straight up-and-down vote on terminating all of their contracts, but was willing to go along with the compromise.

After a war of words that involved Ald. Robert Donovan walking out of the meeting (detailed below), the council ultimately held Stamper’s resolution, allowing Korban to pursue the settlement. The city charter gives the commissioner substantial power to govern contracting, and Korban’s settlement isn’t likely to need further council action to be approved.

Donovan and Kovac Wrangle Over Racism

The debate over the proposed settlement quickly went off the rails after Korban ceded the floor back to the committee. It ended with Donovan walking out of the meeting after contending he was called a racist.

Donovan, in praising Biondich for swiftly terminating the involved employees, said “I’m all for the City of Milwaukee designing and implementing policies that hold our contractors accountable for their behavior, for their actions and the actions of their employees. I am reluctant, however, to support something that is going to punish this company because of the acts of a couple employees. I do not believe that this company is at all racist. They have a 30-year record of working exceptionally well for the city.” Donovan went on to state: “We are all concerned, but we are losing our sense of proportion here and going out of the way to stick it to this company when he has apologized.” Those comments were echoed in a similar statement by Ald. Mark Borkowski.

Donovan’s comments drew a swift rebuke from many of his colleagues. “I couldn’t disagree more with the comments I just heard from Alderman Donovan,” said Bauman. Stamper said, “We have to operate from a level of consistency here.” He singled out city policies that hold bar owners accountable for the actions of their patrons and landlords for their tenants, before pointing out that the National Collegiate Athletic Association (NCAA) holds universities accountable for the actions of their coaches.

Donovan responded: “This idea of almost labeling this company as racist. This is what concerns me that this is somehow the policy of this company to let this go on. That I am not convinced of. They have taken action. If this company didn’t do anything, I would have said alright maybe we do need to take these steps.” Donovan noted that the city didn’t bring in the Milwaukee Fire Department chief when a firefighter was arrested for sexual assault and harassment. “You’re the chair of the [Public Safety] Committee. Haul him in,” Bauman responded.

Ald. Nik Kovac wasn’t buying Donovan’s logic, offering this retort: “Given the amount of facts we have now, it appears to be that racism was tolerated at the company.”

Kovac then turned his attention towards his fellow committee members. “What we just heard from Aldermen Donovan and Borkowski is a pattern of ignoring racism when possible then calling for immediate forgiveness as soon as it becomes obvious.” The comment drew support from Stamper, the one African-American in the debate, and Bauman. Donovan immediately objected, with Kovac citing years of observing Donovan’s behavior in informing his opinion.

Donovan said,”I’m now in the position of having to defend myself that I’m not a racist because of the action sent my way.” Kovac quickly responded, “To be clear, you defended yourself against an accusation that didn’t occur.” Kovac noted he didn’t call the two south side aldermen racist; instead he described their behavior.

During the back-and-forth between Kovac and Donovan, council president Ashanti Hamilton quietly entered the room. The council veteran offered a calming presence: “We shouldn’t have to get to the point where we are calling each other names. We are moving away from the debate we should be having,” he said. Added committee member and past council president Michael Murphy: “I concur with president Hamilton. Obviously, this is a very troubling incident for all of us in the city. It causes a lot of pain to a lot of people who personally feel very offended. It strikes us even harder when here we are using taxpayer money to support employees that have that kind of hate.”

Shortly thereafter Donovan got up from his seat and left the meeting, not to return. Borkowski never spoke on the matter.

The committee held the matter, allowing Korban to pursue the settlement.

Biondich to be Subpoenaed, Firm Could Be Disbarred

The matter of Korban’s settlement wasn’t the only American Sewer item before the committee Thursday morning. Numerous members of the council still want firm owner Dennis Biondich to appear before them publicly. And they’re willing to get subpeona power to do so. They also want to explore disbarring the firm from working with the city in the future.

Following instructions from Assistant City Attorney Katherine Block, the committee voted to open a formal investigation into American Sewer. Following the passage of the matter, Block, who previously sparred with Bauman over the need to disclose her personal views on the matter, said: “You, Alderman Bauman, have subpoena power.” Bauman, to laughter in the room, responded: “I like that.”

In an interview after the meeting, Bauman promised to use the subpoena power granted to the chair of an investigation to compel Biondich to appear before the committee.

Simply getting Biondich to appear isn’t the end Bauman is seeking to the matter though. “As far as I’m concerned the real remedy here is disbarment. I think that will get the industry’s attention really quick.”

In explaining the procedures for disbarment, which would prevent American Sewer from doing business with the city, Block told the committee that such provisions are usually put in place for a period of no more than five years. That power currently rests with Department of Public Works Commissioner Ghassan Korban, who declined to state on the record if he would pursue such a measure given the pending settlement. Korban did tell the committee that his department should draft a disbarment policy, not specific to American Sewer, that would send a signal to the industry to be on their best behavior.

Block said the council could amend the city charter to give themselves the authority to direct the commissioner to disbar the company.

The measure was held to the call of the chair.

If you think stories like this are important, become a member of Urban Milwaukee and help support real independent journalism. Plus you get some cool added benefits, all detailed here.