Taxi owners who got contract gave money to former Mayor Patrick Cannon
04/12/2014 7:34 PM
04/30/2014 9:05 AM
For the past two election seasons, Patrick Cannon received more money from the out-of-state owners of Yellow Cab than from any other company, yet the company’s name never appears on the former Charlotte mayor’s campaign finance reports.
During that time, Yellow Cab won a controversial city contract that makes it one of only three taxi operators that can pick up passengers at Charlotte Douglas International Airport, considered to be the city’s most valuable taxi business. The City Council oversees the annual renewal of that contract.
State law requires candidates to disclose a campaign donor’s name, address, occupation and employer. The law is designed to allow the public to track who gives money to politicians and whether they stand to benefit financially from government action.
But Cannon’s campaign reports illustrate the shortcomings in the law. The contributions are under the names of three of Yellow Cab’s business partners and an associate, each of whom gave the maximum allowed by law to his mayoral campaign. But their occupations are listed generically, never mentioning Yellow Cab.
Yellow Cab has given $36,000 to Cannon, a Democrat, more than to any other Charlotte City Council candidate. Their donations accounted for 10 percent of the reported contributions for Cannon’s 2013 mayoral campaign.
An FBI affidavit filed when Cannon was arrested on March 26 doesn’t mention the taxi business. It accuses Cannon of soliciting campaign donations and of taking $48,000 in cash and gifts in exchange for using his official position to give favors and influence.
Search warrants unsealed last week reveal that the FBI’s ongoing investigation involves Cannon’s campaign funding, with agents seizing his campaign finance records and checks marked “Cannon for Mayor.”
Campaign contributions from people who want to curry favor with politicians are normal. Such donations generally become illegal when a politician promises specific acts in direct exchange for money.
Bob Hall, executive director of the election reform group Democracy North Carolina, said the contributions by the Yellow Cab owners suggest they were trying to build “a very strong relationship with this politician.”
“I think this is a red flag when you have that much money from out-of-state interests with a very strong financial stake. It raises the question of what’s going on here. Why are they doing this?” Hall said.
A controversial change
Yellow Cab appears to have first donated to Cannon in February 2011, with Mitchell Rouse of California and William Bodenhamer Jr. of Florida writing checks to Cannon’s City Council campaign for $4,000 each, the maximum allowed.
Rouse and Bodenhamer, along with Neal C. Nichols of Arlington, Va., are partners in NBRS USA Holdings. Corporate records show the Fort Lauderdale-based company is a member of Taxi USA LLC, as well as cab companies throughout North Carolina. Taxi USA owns Yellow Cab in Charlotte.
Bodenhamer, Nichols and Rouse didn’t return multiple phone calls from the Observer.
At the time of their donations, an FBI agent was already in regular communication with Cannon as part of an undercover investigation. The 42-page federal affidavit describing the corruption case against Cannon says that sometime in 2011 Cannon became a “primary subject” of the investigation, saying the FBI had found evidence of corruption.
In February 2011, Cannon chaired the City Council’s public safety committee, which oversees taxi issues. The airport taxi contract was embroiled in controversy.
Before the new contract, there were 12 companies allowed to pick up passengers at Charlotte Douglas. But in 2010, then-Airport Director Jerry Orr said he wanted to reduce the number of taxi companies to improve customer service.
Orr originally wanted to allow only one taxi company to work at Charlotte Douglas. But City Council members pushed to add competition.
“Jerry wanted to have one company,” said City Council member Michael Barnes. “I think it was their company (Yellow Cab). I had pushed for competition. I think we talked about having four (taxi companies permitted), but we got it to three.”
Other council members, including former members Warren Turner and Edwin Peacock, also questioned whether the city was being fair in limiting the number of cabs. Orr said he recalls a general sense of agreement from the council to go with more than one.
Orr said he knows Bodenhamer, Rouse and Nichols through Yellow Cab. He said Yellow Cab had wanted to be the only cab company serving Charlotte Douglas – something all the cab companies wanted because of how lucrative airport service is.
He said Yellow Cab did not gain an advantage by donating to Cannon.
“It had absolutely nothing to do with the selection process,” he said.
Orr appointed the taxi selection committee, which included himself, then-CRVA head Tim Newman, Charlotte-Mecklenburg Police Department Maj. Tim Danchess and Airport Advisory Committee Chairman Drew Riolo.
Other taxi companies complained at public meetings that the Greater Charlotte Hospitality and Tourism Alliance, a private lobbying group, unduly influenced the selection process. Two cab companies said the HTA asked them to join or increase their annual donations in exchange for winning a contract at the airport.
The HTA’s president, Mohammad Jenatian, has denied his group exerted any influence over which companies were chosen, or that he pressured anyone to join the HTA in exchange for airport access.
Cannon is a board member of the HTA and is a political ally of Jenatian. It was Jenatian who introduced Cannon to an undercover FBI agent in 2010. The FBI affidavit does not say whether Jenatian knew he was involving Cannon in an investigation with that introduction.
In the public record of minutes from council and committee meetings, Cannon does not lobby for Yellow Cab or any other company. He does question the qualifications of City Cab, a newly formed company, the minutes show. The minutes also show at least one taxi owner said Cannon should have recused himself because of his relationship with the HTA.
Eventually, the taxi selection committee recommended a slate of three taxi companies: Yellow Cab, City Cab and Crown Cab. Yellow Cab and Crown Cab are members of the HTA.
In May 2011, Cannon’s public safety committee – which also included Peacock and Patsy Kinsey – voted unanimously to send the taxi selection committee’s three recommendations to the full City Council.
The contract was awarded with the council’s final vote in June 2011.
After the vote
Two cab owners who lost access to Charlotte Douglas say they were approached after the vote by Zack Kacho, a man who claimed to be an associate of Cannon. They told the Observer last month that Kacho offered them a deal.
Kacho, who is in jail awaiting sentencing in a separate case, allegedly said to two owners that they could get a spot at the airport if they paid $10,000. One taxi operator said he was told the cash would be a campaign contribution to Cannon, and the other said he was told the cash would go to Cannon and other City Council members.
One of the owners, Mohamed Moustafa of Universal Cab, said he took his concerns to the FBI.
Yellow Cab’s giving escalated with the 2013 election season, with more money going to Cannon and smaller donations to other City Council members.
During Cannon’s mayoral campaign, Bodenhamer, Rouse and Nichols gave the maximum legal contributions by giving him $8,000 each. Alice Rouse – who co-owns Yellow Cab property in Charlotte with Mitchell Rouse and Bodenhamer – also wrote Cannon a $4,000 check.
Cannon raised $277,510 during the mayor’s race, which means Yellow Cab’s $28,000 made up 10 percent of what he raised overall.
Cannon’s opponent, Republican Edwin Peacock, raised $392,586, or 41 percent more than Cannon. Campaign records show he didn’t receive money from the taxi owners.
Yellow Cab also gave to other council campaigns.
Bodenhamer – who attended East Carolina University and is a past member of the school’s board of trustees – donated $1,000 to the most recent campaigns of council members David Howard, Claire Fallon, Vi Lyles and LaWana Mayfield. All are Democrats.
Barnes, who won an at-large seat, received $24,000 from Rouse, Bodenhamer and Nichols in 2013. Barnes raised $61,448 for the at-large race, meaning about 40 percent of his funds came from the Yellow Cab owners.
Barnes and Cannon were political allies on the council. The two were also partners in a lighting company called BritTrick Energy, which shut down in 2013. FBI search warrants list BritTrick records among the items seized after Cannon’s arrest.
Barnes said he spoke with Bodenhamer during last year’s campaign.
“What they said was, ‘We run this company; we want to support people’s campaigns who are viewed as having leadership in the city,’ ” Barnes said.
He said their contributions won’t influence his oversight of taxis.
Council member Howard said it was Jenatian who gave him the Bodenhamer campaign donation check.
Howard said Jenatian has done good things for the city and that Jenatian agreed to raise money for him from people in his industry.
The other two taxi companies in the airport contract also donated to Cannon during the 2013 mayor’s race. Twenty-two employees of City Cab gave $4,875 to Cannon in mostly $225 increments, records show. The owners of Crown Cab also donated to Cannon’s mayoral campaign, giving him $500.
Moustafa of Universal Cab, one of the local cab owners who lost airport access, said the campaign contributions show city government is in the hands of big donors.
“They think they can buy Charlotte,” Moustafa said. “They try to take over.”
The airport taxi contract was approved in 2011 with four one-year extension options. Each year since, the airport director has recommended an extension and the City Council has approved it.
City of Charlotte spokesman Keith Richardson said the latest extension was approved earlier this year and goes through June 30, 2015.
“Next year, council could opt not to extend the contracts and re-examine the process for the contracts,” Richardson said.
Observer staff writers Rick Rothacker, Ames Alexander and Gavin Off and staff researcher Maria David contributed.
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