Monday, August 14, 2017

Court: Hinds County paid $4.3 million to a non-existent company.

Special Circuit Judge Henry Lackey ruled that Hinds County paid $4.3 million to a company that didn't exist.  Hinds County terminated a multi-million dollar radio maintenance contract with Airwave Consultants, LLC in 2014.  Airwave sued for damages caused by the termination in Hinds County Circuit Court.  Judge Lackey ruled that the company had no rights to damages since it never registered as a corporate entity with the Mississippi Secretary of State.  No company, no money. 

 The Hinds County Board of Supervisors awarded a multi-million radio maintenance contract to Airwave LLC in 2008.  However, Hinds County and Airwave Consultant, LLC signed the actual contract.  Airwave Consultant, LLC never registered as a company in Mississippi and thus does not exist although Airwave LLC formed 57 days after the contract was signed.

 Supervisors Peggy Hobson-Calhoun and Phil Fisher attempted to terminate the contract several times but Supervisors Robert Graham, Doug Anderson, and George Smith always voted to keep Airwave.  Airwave also had contracts for siren maintenance (even though the sirens were brand new and covered by five-year warranties) and a contract to maintain six radio towers. The Board terminated all contracts with Airwaves after Supervisors Tony Greer and Darrel McQuirter became supervisors in 2013. 

Airwave sued Hinds County for damages in 2014.  The Mississippi Supreme Court appointed Special Circuit Judge Henry Lackey to hear the case.  Attorney Robert Gibbs represented Airwave.

The Court ruled that a company that didn't exist couldn't claim damages. Judge Lackey said the plaintiff, Airwave Consultants, LLC
is an alleged entity that did not exist at the time the documents were signed....

Airwave Consultant, LLC did not exist at the time this lawsuit was filed and has never been created and is therefor a non-entity.

Defendant, Hinds County, Mississippi has paid this nonentity $4.3 MILLION DOLLARS. This nonentity seeks an additional $8 hundred thousand dollars for work completed and the estimated value of the agreements had they continued until expiration....
 The Court made sure everyone knew what it meant as it minced no words in its conclusion:

The Plaintiff, AIRWAVE CONSULTANT, LLC is a non-entity. It has never been created, never existed even though the Plaintiff, Stowers, who claims to be the owner of the company alleges in his Complaint that Airwave Consultant, LLC is a domestic telecommunication company residing at 848 Foley St. Jackson, Ms. This allegation is false, untrue.
Before Plaintiff could exist the Secretary of State's office must have breathed life into it by placing its application for creation on record in that office. This never happened. There can be no meeting of the minds nor negotiations nor agreement with a non-entity. It is impossible for a non­ entity to contract.

There is also the matter of "Airwave" actually documenting its work.  It is generally a good idea to provide records of the work performed if one is demanding payment for the work performed.  However, it appears Airwave didn't provide any records to the court to support its claim. The Court said

The Plaintiff has no records for work done nor for payments received having moved its office sometime after this action was filed and apparently misplaced or destroyed its records. Plaintiff apparently bases its request for work done, yet unpaid, on Quantum Meruit rather than on contract.
Judge Lackey wasn't done with Airwave.  It appears that the Board awarded the contract without making it available for bids:

The intent of the Board of Supervisors of Hinds County to accept competitive bids for maintenance of their communication tower sites, and maintenance of their communication equipment and radios were never advertised for competitive bids as required by statute.
Therefore the Board of Supervisors had no authority to enter into the agreements/aITangements with Stowers nor the non-entity purporting to be the Plaintiff.
One interesting part of the opinion laid the blame at the feet of the late District 4 Supervisor Doug Anderson and Mr. Stowers:

  Mr. Stowers and Hinds County Supervisor, Doug Anderson,(now deceased) met and developed a plan whereby Stowers would fotm a company and perf01m services for the Hinds County emergency communication system.

Judge Lackey also awarded payment of attorney's fees to Hinds County subject to documentation.

Earlier Airwave posts
Airwave wants to jack up Hinds County for some jack.
Hinds E911 fund going broke. Graham & Stokes do nothing.
Hinds keeps Airwave contract, Hargrove makes racist comments to Supervisor
Supervisor Jimmie Lewis fired over Airwave
Airwave contracts will bankrupt E911 fund in 18 months.
Supervisors refuse to bid out Airwave contracts (This is a good one to read)
Brown: Stowers & Hargrove stole from company. Lawyer wanted lawsuit to take care of retirement.
Hinds County BOS FOOD FIGHT!!!
Hinds County awarded $4 million to non-existent company.
WLBT shines light on Hinds County & Airwave.

Kingfish note: Judge Lackey confirmed what this website said several years ago.  JJ reported on April 8, 2011

Hinds County awarded a $4 million contract to Airwave, LLC in 2008. The Hinds County Board of Supervisors approved a radio maintenance contract with Airwave, LLC at the November 3, 2008 board meeting. The minutes state on page three:

"UPON A motion of Robert Graham and a second by Douglas Anderson, Peggy Hobson- Calhoun voting aye, George Smith voting aye, Phil Fisher voting aye, it was RESOLVED to approve a Radio Maintenance Agreement with Airwave Consultant. LLC. Document affixed hereto and incorporated herein."

The contract was signed by Airwave, LLC General Manager Stacy Stowers on December 1, 2008 and by Board President Peggy Hobson-Calhoun on December 2, 2008. The contract states the start date is December 3, 2008 and Hinds County will pay Airwave, LLC in quarterly installments according to the fo
llowing schedule (p.18):

Year one: $374,860 ($93,715 per quarter)
Year two: $521,885 ($130,463 per quarter)
Year three: $736,918 ($184,229 per quarter)
Year four: $770,035 ($192,508 per quarter)
Year five: $804,908 ($201,227 per quarter)
Year six: $845,153 ($211,288 per quarter)

The contract automatically renews at the end of the term on an annual basis unless each party gives proper notice it intends to cancel the contract.

 There is just one slight, teenie-weenie problem with the Airwave, LLC contract. Airwave, LLC did not exist until January 28, 2009, fifty-seven days after the contract with Airwave LLC was signed. The Secretary of State's website states that is when Airwave, LLC was created and Stacy Stowers is the manager. Incorporation papers. Thus, Robert Graham made a motion approved by the Board that awarded a $4 million contract to a non-existent company. 

 Editorial comment: The awarding of a $4 million contract to a non-existent company operated by Stacy Stowers is not a simple oversight but a case of malfeasance in office or criminal neglect by the supervisors and county officials. It is hard to argue Mr. Stowers deceived the county given the current board's special treatment of him and Nathan Hargrove. If the company did not exist when the contract was signed, then the contract is invalid and money was illegally spent. The taxpayers should demand repayment of the money funneled to Mr. Stowers. One can find no better example of why Hinds County is broke than this phony contract Mr. Graham awarded to his cronies. One can only hope higher authorities such as the state auditor look into this mess. Mr. Graham and his fellow supervisors don't owe us an apology, they owe us some MONEY!!!

Oh yes, someone tried to defend this crap in the comments section:

Uhh, excuse me . . ., but is the issue here the dotting of an "i" and crossing of a "t" in contract formation, or is breach of contract at issue here? Did Airwave perform under the contract (and I don't know if it did or didn't) so that Hinds Co. could receive the benefit of its bargain? If so, then it's much ado about nothing because preincorporation contracting is not uncommon. Besides, the contract states that Airwave only accepts the contract as of the date of Airwave's first performance under the contract. That would be the "acceptance" side of the offer-acceptance needed to form a contract, and by that date Airwave was probably properly formed. There may be a reason to have the contract/performance investigated, but the preincorporation aspect is just a red herring.

 Kingfish @ 8:32, I hope you don't think there is anything wrong with application of reason and common sense. While I don't condone the way that Jax/Hinds does business, arguing "form over substance" generally doesn't carry the day. If you contract for services to be performed, and the services are actually performed but the manner of contracting wasn't perfect, nobody was harmed if everyone received what was expected out of the contract. For example, if an underage minor signs a lease for an apartment while he is at college, and he pays the lease and stays in the apartment without any problems for his year in college, who got harmed by the imperfect contract? Nobody -- everyone got what they bargained for in the lease contract.

 Kingfish @11:38, that is not the issue -- nobody got hurt or is looking for someone to sue over a personal injury. So, why speculate and get mad over a "past possibility" that never happened -- stick with "reality". You clamored over the incorporation date of Airwave. But, in "reality" that's a non-issue. Sounds to me like the merits and issues relate more to "waste" of taxpayer funds, lack of oversight of the actions of the Bd. of Sup., and potential fraud. So investigate and get mad over the merits -- the real issues -- not a non-issue like the date of incorporation. 


Anonymous said...

Can the county sue this person for damages for misrepresentation and fraud? Probably wouldn't get much out of them financially but jail time seems appropriate.

Anonymous said...

Get out of Hinds county. They will suck your $'s via taxes dry.You have been warned (if KF publish this).The publish this comment orange button must be broke.

Anonymous said...

The names of the crooks were stated in the article. Everyone can read the names of the crooks who stole money from the tax payers.
What else do the people need?

Anonymous said...

Dear Robert Graham

We know you are reading this. While you thought this had gone away it has not. You really should step down. You have proven that you are incapable of being honest over and over again.

Anonymous said...

If you haven't been following the massive sewage discharges that have gone down that past few weeks at Northside and Kimwood then you may not fully understand how truly bad the state of decay is facing Jackson and Hinds.

Anonymous said...

Graham will never fall on his sword for this taxpayer ripoff.

Anonymous said...

this falls half on the board of supervisors and half on the company. shame!

Bill Dees said...

Aren't the supervisors who voted in favor of this contract financially liable to the County for the malfeasance, both personally and on their surety bonds?

Anonymous said...

This is one of the worst business deals I have ever seen. Elected folks, staff, lawyers, accounting, ect. Takes a lot of work to to contract with a paid money to something at does not exist. Brings being dishonest to another level.

THREE Cheers for Kingfish said...

JJ has been there all along. The ONLY media outlet in all of Mississippi that has been exhaustively pursuing this story.

The ONLY media outlet in the metro who went to court to expose the sweetheart deal Graham gave Precious Martin to shakedown Motorola which, in turn, let to this Airwave debacle.

KUDOs to Kingfish and shame on the metro media jello molds -- including the LaddStaufferFraud -- who do nothing to expose government corruption.

Anonymous said...

This is almost as good as the TSUN fiasco.

a fart can be an airwave said...


Anonymous said...

A few questions:

Who was the listed payee on all those checks Hinds County issued in the sum of 4.3 million dollars?

Does the listed payee match the approved claims docket each time a check was issued?

At which bank were the Hinds county checks deposited?

How does a nonexistent entity establish a bank account? Or was it another owner on the bank account?

Who (or what corporate entity) was the account owner at the time the account was created? Who (or what corporate entity) owned the account when the checks were deposited.

Anonymous said...

Do a little research into who major financial stakes in Airwave, and Browns Communication. I bet you will find people directly related to Robert Graham. Also look into how much they paid to have the grass cut around the County's communication towers, as well as how they are related to Robert Graham.

Anonymous said...

BabyChok wants to use tax receipts to fund a public incubator for more co-ops. An idea ripe for graft and abuse.

Anonymous said...

I’ve got a swell idea, how about Jackson be patriotic and volunteer to be the next test site for a nuclear bomb.

Anonymous said...

Sounds like a technicality. Because the company didn't register a mississippi-based LLC with the Sec of State office or as a foreign entity with a registered agent, the contract is void?

Anonymous said... is sad how so many on here get sucked in by a headline. Failing to register or renew with the state is common oversight. A company can still have a tax ID and file federal and state tax returns and have a bank account and be "legit" in the eyes of everybody but the Secretary of State. And it is simple to remedy the SOS problem.

However, the reason the BOS terminated Airwave was failure to perform (and that is the nicest way to put it). The relationship WAS fraudulent and 99% of this had nothing to do with failure to file a few papers. It was because the county was being billed 10 times the actual services being performed.

And yes, bash the board of supervisors for entering into this relationship but also acknowlege a subsequent board of supervisors called it out for what it was and ended it.

Anonymous said...

this makes me happy in so many ways. Airwaves was a scam, and I'm glad to see the courts agree! I knew Stowers when he was with a previous employer(also named in the article) and he got fired from there for cause as well.

Anonymous said...

@ 2:48- Agree with most of what you state. The deal may have been bad to begin with but the fact they did not incorporate in advance would not have made any difference at all if both parties were happy with the deal. The county wanted to breach the contract and this happens to be a way to do it that allows the BOS to save face. Nothing more than a typical "good ole boy" deal gone bad.

Anonymous said...

The real concern here ought to be the lack of legitimate job performance.
The technicality of corporate registration would not negate the fact that
someone is owed pay if the work were actually performed. In this case
the whole thing is probably a big scam to pay cronies and crooks way too
much for way too little. But if it were legitimate work (in Hinds County?)
then I don't see how the county could say it doesn't owe the money to anybody. I do understand how a contract for future "services" would be
void though. The taxpayers should want to know what kind of legal advice
did the county pay for during the time they entered into this contract.

Anonymous said...

The real concern here should be that there appears to be a lack of due diligence with the procurement of millions of dollars of whatever the hell the Hinds County taxpayer money bought through a no-bid contract with connected individuals with questionable qualifications to do whatever the eff they were getting paid to do.

Subbing the work...yeah.

The fact that no one on the Hinds County side of the deal notices that the entity on the other side of the contract with Hinds County doesn't exist...yeah, just a minor bump in the road. Errybody can make that mistake.

Except that either the appropriate procurement procedures are lacking, or weren't followed, or both.

Anonymous said...

Kingfish - Did I miss this? Were is that part about the Attorney that Hinds County has on the payroll? How can you function as county attorney and not verify that the company you are contracting with is a company? I don't mind calling out the supervisors, but don't forget they pay an attorney to check this stuff before they see it. Who was the county attorney at the time?

Anonymous said...

The real concern is the number of crooks making decisions on where our tax dollars are spent. The next major concern is the lack of caring by people who put them in power.
Jackson deserves what they get. If they continue to elect a bunch of crooks they should expect them to steal from the tax payers.

Anonymous said...

Sounds like the State Auditor needs to hold some Supervisors personally liable for spending taxpayer money illegally!

Anonymous said...

I agree. Bring in the State Auditor. Would this time period have been when Crystal Martin was County Attorney? The Board usually follows the recommendations of their paid Attorney and I, too, see the attorney's part being problematic. Sure, I believe there may have been kick-backs involved and I am all for getting to the root of the problem.

No taxpayer in our state should have to put up with having to finance kick-backs. And, for goodness sake, don't we all believe our Legislature should quit investing in businesses?

Anonymous said...

Attorney Crystal Martin, Supervisor Kenny Stokes and several other crew members that are now gone. Don't lump the current attorney or new board members in with this fiasco, they are the reason it got terminated.

Anonymous said...

Judge Lackey is wrong....legally.


Anonymous said...

The fact that this contract was let as a no-bid procurement, using a portion of the state law that does not apply to the purpose of the contract, was told to many state officials, including our State Auditor - who chose to look the other way.

Maybe now - after a Judge has pointed out the illegality of this procurement - our honorable auditor will decide that these millions of dollars were misspent and demand a repayment. Might take a little more work and balls than his demanding $20 thousand here and $15 thousand there from deputy justice court clerks, but hell, that's what he's getting paid the big bucks for.

Oh wait, what am I thinking. This would require Pickering to actually do something controversial - right, but controversial. Never mind.

Pastor Beancounter on the way to Disneyworld in my motorhome said...

It's a lot more fun to be Stickering little people!

Anonymous said...

Why would not the State Audior not do his job?

Anonymous said...

Can someone use the phrase "the real concern" one more time on this one? It would be so special.

Anonymous said...

This was reported to the state auditor years ago. Reportedly he looked into it and came back with "it's not illegal to be stupid". Can't verify the quote but sounds about right.

Anonymous said...

There are times the Board attorney is not consulted. That has happened before. Stupid but true, especially for a contract of this magnitude. They speak in Board meetings only when called upon by the Supervisors. One employed by the Board who speaks out of turn may be an ex-employee shortly thereafter.

Anonymous said...

Judge Lackey has spoken, but it won't be over until the Supremes (court) sing.

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

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There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

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