Former Industrial Authority chairman violated ethics code, audit shows

When the annual audit was presented to Macon's Industrial Authority Wednesday, it showed former chairman Cliffard Whitby violated government ethics codes.

An invoice was paid twice from two different funds and relatives of Whitby were officers of companies contracted by the Macon-Bibb County Industrial Authority.

"We did identify certain deficiencies in internal control ... that we consider to be material weaknesses," according to the audit prepared by Clifton, Lipford, Hardison & Parker, LLC.

An invoice for about $77,000 was paid by the authority twice to Armstead Management LLC from two different accounts two weeks apart, said Ken Neil with Clifton, Lipford.

UPDATE Feb. 5, 2018: Armstead Management has reimbursed the industrial authority in full for the second payment for the same invoice, attorney Kevin Brown said following the authority's February meeting.

Also, when Whitby, as CEO and chairman of the board, engaged Armstead Management LLC and New Age Concepts and Consulting LLC to do construction and demolition work, he did not disclose that a brother-in-law of Whitby was an officer of Armstead, and an officer of New Age is Whitby's daughter, according to the audit report. During 2017, the total the authority paid to Armstead Management was $1.48 million and $1.2 million to New Age.

The authority was billed for work done at various sites under multiple invoices. The work that the two companies performed was at Allied Industrial Park, Airport North, Schofield Building, 439 Mulberry St., Industrial Highway and 400 Popular St., the audit states.

Whitby resigned from the authority in August shortly after a federal grand jury indicted him in a public corruption probe linked to technology sales to the Bibb County school district in 2012.

He was indicted on charges of conspiracy to pay a bribe to an agent of an organization receiving federal funds, conspiracy to launder the proceeds of unlawful activity and five counts of paying a bribe to an agent of an organization receiving federal funds, according to the U.S. Attorney’s Office. According to the indictment, Whitby made payments to former school Superintendent Romain Dallemand, who has pleaded guilty to filing a false tax return, under-reporting his income and over-reporting his itemized deductions, according to reports.

Late Wednesday afternoon, Whitby's criminal defense attorney, Nick Lotito, responded to a Telegraph request made to Whitby for comment about the Industrial Authority audit.

"My understanding is that Tyrone Lewis of Armstead has already written to the Industrial Authority about (the same invoice being paid twice) ... and if it was in error they would obviously refund the over-payment," said Lotito with the Atlanta law firm Davis, Zipperman, Kirschenbaum & Lotito LLP. "It may have been an error and nothing more than that."

Lotito wasn't sure of the date of that letter, but said it was "very recently" after the issue was discovered. "There's apparently an error in terms of a bill being submitted twice or payment being made twice."

Regarding Whitby's relatives being officers of the two companies that performed work for the authority, Lotito said James Bumpus, director of small business affairs for Bibb County, reached out to owners of both companies to submit bids for work because the Industrial Authority was seeking minority contractors.

Bumpus "did this as part of their effort to encourage minority participation, which had been, prior to Cliffard's tenure with the Industrial Authority, completely lacking," Lotito said. "For decades there was no minority participation. ... Those were two of the companies that responded to (Bumpus') outreach."

He said there "was no effort (by Whitby) to conceal" the fact that officers of the companies were related. "I don't know that that was a secret in a small community, a relative small community, that Macon construction is."

Following the meeting, chairman Robby Fountain said the situation "is unfortunate. ... We are going to review it and take all things into consideration and we'll get to the bottom of it. ... It's troubling."

Some of the procedures have already been changed, such as controls to avoid payment of duplicate invoices and others are being looked at, Fountain said. Also, the authority is looking at requiring vendors to certify they have no undisclosed related-party interests with board members.

When asked if legal action might be taken, Fountain read from a statement: "The authority will consider and swiftly proceed with appropriate actions as required to fulfill its fiduciary responsibilities upon completion of said review."

Information from The Telegraph archives was used in this story.

Writer Linda S. Morris, 744-4223, @MidGaBiz

This story was originally published December 20, 2017 at 2:38 PM with the headline "Former Industrial Authority chairman violated ethics code, audit shows."