Business

Attorneys want taxi operators’ ‘pay-to-play’ lawsuit against city dismissed

Attorneys representing Charlotte and several local leaders asked a judge on Friday to dismiss lawsuits from two taxi companies alleging the city’s airport taxicab contract was corrupted by a pay-to-play scheme.

The lawsuits, filed by the owners of Universal Cab and Diamond Cab, assert a long-running conspiracy to trade the lucrative airport contracts for campaign donations to former Mayor Patrick Cannon and the Greater Charlotte Hospitality and Tourism Alliance, a lobbying group.

In a four-hour hearing featuring 16 lawyers, Charlotte Douglas International Airport attorney Leila Lahbabi said such assertions were ridiculous.

“The dispute today really just centers around a run-of-the-mill business decision by the city of Charlotte to improve taxi service,” she said. Lahbabi characterized Universal Cab as a “disappointed proposer ... who has brought suit under different and at times contradictory conspiracy theories.”

The dispute stretches back more than three years. In 2011, the Charlotte City Council reduced the number of taxi companies that were allowed to pick up passengers at the airport from 12 to three. Universal and Diamond were not included.

Universal Cab owner Mohamed Moustafa and other taxi owners have long complained that the city’s process to award contracts for airport taxi service was corrupted by a pay-to-play scheme. Most of Friday’s hearing centered on Moustafa’s lawsuit.

Moustafa filed the suit in June, after Cannon was arrested on federal corruption charges for taking bribes from undercover FBI agents. Cannon pleaded guilty and was sentenced to four years in prison. Moustafa’s lawsuit named Cannon, former Aviation Director Jerry Orr, former Charlotte Regional Visitors Authority chief Tim Newman and Mohammad Jenatian of the tourism lobbying group. It also names the city of Charlotte and the three winning cab companies at the airport.

Diamond Cab’s lawsuit named many of the same defendants.

In his lawsuit, Moustafa said his troubles followed a falling out with Newman and Jenatian in 2006. Moustafa said he refused a request from Newman to repaint his cars with a NASCAR paint scheme in advance of the racing hall of fame opening in Charlotte. After that, Moustafa claims in the lawsuit that Newman and Jenatian said they were going to remove him from Charlotte Douglas – a lucrative place for cabs to operate.

“Mr. Newman and Mr. Jenatian referred to Mr. Moustafa by a racial or ethnic derogatory slur and said they would get his ass out of here,” said John Bloss, Universal Cab’s attorney.

Newman later served on the four-person selection committee that recommended which cab companies should be awarded airport contracts, along with Orr.

Moustafa said Jenatian told him he could get an airport spot if they paid more dues to the HTA. Moustafa said that he joined the lobbying group, but didn’t pay as much in membership fees as Jenatian had asked for. Moustafa alleged there was a “quid pro quo” arrangement in which companies that won airport contracts either made campaign contributions to Cannon or joined the HTA in exchange for favorable treatment.

Newman has denied any wrongdoing, as has Jenatian. Orr also has said the selection process was fair. Their attorneys on Friday argued that the lawsuits lacked enough evidence to prove anything illegal happened, and that the lawsuits should be dismissed.

An attorney representing Crown Cab, one of the companies that won an airport contract, called the allegations “fanciful” and compared them to the musical “Into the Woods,” in which several fairy tales are woven together.

James Ferguson, the attorney representing Cannon, acknowledged the former mayor pleaded guilty to accepting bribes. But he said there’s no connection between that case and the current lawsuits.

“They have strung together a number of events unrelated to each other,” said Ferguson.

Attorneys for the cab companies argued that the cases should be allowed to proceed, because even if there isn’t enough evidence to prove a conspiracy and pay-to-play scheme yet, they can uncover that evidence during pretrial investigation.

“We’ve alleged that there was a conspiracy, and bribes paid,” said James Galvin, representing Diamond Cab. Galvin said a City Council vote to award the contracts was a “dog-and-pony show” with the outcome already fixed by the defendants.

Responding to the “Into the Woods” reference, he said, “My clients are not cartoon characters.”

N.C. Business Court Judge Louis Bledsoe III said he would take the arguments under advisement and issue a written ruling on whether to dismiss the lawsuits soon.

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