DeKalb convenes grand jury to investigate possible watershed corruption

DEKALB COUNTY, Ga.,None — DeKalb County District Attorney Robert James said he will convene a special investigative grand jury next week to begin examining allegations of corruption within the Department of Watershed Management.

"It's not just looking at people who may have had their hand in the cookie jar, it looks to see how deep and how pervasive an issue or problem may be," said James.

James would not disclose names of specific individuals who will be scrutinized, but Channel 2 investigative reporter Jodie Fleischer uncovered county documents alleging bid rigging, fraud and even kickbacks.

"There may have been individuals inside Watershed Management, inside the county agencies, that were manipulating the bidding process, such that when individuals obtained contracts or awards, they weren't done so fairly," James told Fleischer.

Fleischer read through hundreds of pages of court records and spoke with attorneys and individuals central to a pending civil lawsuit. They exposed two very different sides of the case, both of which allege serious corruption within DeKalb County government.

"It would appear that there may have been ways that you didn't get contracts unless you paid for them. We contend our client didn't get paid because he wouldn't grease anybody's palm," said Bob Wilson, attorney for Paul Champion.

Champion's Tree Service sued DeKalb County in 2010 after the county refused to pay more than $880,000 in submitted invoices. Champion had a county contract to cut trees and clear easements so another company could map the county's stormwater lines.

"He was given directions, cut this, and he cut it," said Wilson.

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But in court filings, the county contends that it stopped paying after discovering massive overbilling that "cheated DeKalb County out of hundreds of thousands of dollars, if not millions." Records accuse Champion's Tree Service of billing for trees that were not cut, and for bigger areas than what even existed at certain locations. The county's counterclaim estimates $3 million in fraud, theft, even racketeering.

"Whenever you have that much money changing hands, it's important to make sure that the rules are followed," said James. "They are going to look at the players inside the county and also the companies as well."

The county fired two Department of Watershed Management employees, including Nadine Maghsoudlou, who oversaw the Champion contract. Her brother-in-law, Hadi Haeri, was working for Champion and is also under scrutiny.

"How deep it goes and whether it involved other contracts is obviously something that if it did, we'd like to see it exposed," said DeKalb County Chief Operating Officer Richard Stogner. "We'd like to see people who took advantage of the system brought to justice."

Wilson thinks Maghsoudlou was a scapegoat and he believes there was corruption, but at a different level than the county currently believes.

"If they dig deep, there's going to be some people who have problems, but I don't think my client will," said Wilson, "Why in the world would he have brought a suit if he had done something wrong? Why wouldn't he have just walked away?"

He says the county's own inspectors verified that trees were actually cut and signed off every time a bill was paid. He said stopping payment and then alleging fraud was actually to cover for their own incompetence.

"They didn't pay him because they didn't have the money to pay him. They hadn't budgeted, and people didn't have the political courage to go to the governing authority and say we need more money. We overspent," said Wilson.

He also alleges an even bigger scheme to shake down his client for cash.

"There was someone who had a say about whether my client would get paid, who made a comment to my client that led him to believe he was being asked to share proceeds. My client would not do it," said Wilson, adding that he has shared the specific details of that shakedown attempt with prosecutors.

The district attorney told Fleischer the grand jurors will have subpoena powers to question current and former employees. He hopes they will not only look at every aspect of this contract, but all Department of Watershed Management contracts since 2002. They will not be able to issue indictments, but will be able to recommend the he take the case to a criminal grand jury.

WSBTV