http://www.commercialappeal.com/news/2008/jan/11/fbi-probes-pacts-by-city/ The FBI is examining contracts between the city of Memphis and seven companies, including two headed by close associates of Mayor Willie Herenton. The probe, the latest in a series of state and federal corruption investigations, is focused primarily on computer technology contracting and follows longstanding allegations of favoritism in minority contracting. An FBI letter obtained by The Commercial Appeal indicates federal agents want copies of city contracts involving seven firms -- five of them local companies owned by African- Americans. One of those firms, Integrate Technologies, a computer consulting firm controlled by Herenton's longtime friend, Reginald French, has been paid more than $1 million for no-bid subcontracting work. Another, E.W. Moon Inc., a civil engineering firm headed by Herenton friend Elvin W. Moon, has won at least $702,000 in no-bid city road design contracts signed by the mayor since 2002. Herenton declined comment. An investigation by the newspaper last year found that Moon paid the mayor $50,000 in a private land deal after landing lucrative city contracts. The deal involved a one-third-acre lot where Herenton built a $236,000, two-story home. In 2005, Herenton sold the then-vacant lot in Banneker Estates for $50,000 to Moon. Months later, Moon deeded the still-vacant property back to the mayor -- for free. Herenton has since built the home there. Both the mayor and Moon said at the time that the deal was legal and proper and unconnected to any city contracts. More recently, the FBI has been asking questions about French's lucrative city subcontracting deal. Sources told the newspaper in November that agents were interested in a computer programming consultant's claim that French stiffed him out of nearly $80,000 for work performed on city computers. That consultant, Bala Karri, said city contractors told him he needed to go through French and employ him in order to land city work. A former prison guard with no background in technology, French landed a city subcontract in 2004 through ACS, a publicly traded Dallas-based firm that runs City Hall's information technology department. "Integrate Technologies happened to be the preferred vendor for the city of Memphis,'' Karri said. French denies Karri's claims. ACS spokesman Tom Clary said subcontractors for its work for the city "are retained in accordance with the rules and procedures set forth by the city,'' declining to discuss details of the probe. "We are aware that authorities are investigating several city of Memphis contracts, and we are cooperating with the city and federal officials as they conduct that investigation. Because this is an ongoing investigation, we are unable to provide further comment,'' Clary said in an e-mailed statement. ACS was among seven firms named in a Nov. 20 letter from FBI supervisory special agent Howard S. Marshall to City Atty. Elbert Jefferson seeking copies of contracts. In addition to city contracts with Moon, French and ACS, the FBI letter seeks contracts with these firms: The Mitchell Technology Group, a computer equipment sales and service firm headed by managing partner Marvell Mitchell, a state appointee to the Tennessee Lottery Board. Thomas Consultants Inc., a computer sales and installation firm founded by Darrell K. Thomas, unsuccessful candidate in 2006 for the City Charter Commission. LeSure Computer Services, a Memphis-based computer repair firm. Systems and Computer Technology Corp., a Pennsylvania company that won a $50 million contract in 2000 to run city government's information technology functions. SCT was later purchased by ACS. --Marc Perrusquia: 529-2545 ______________________________ It's about freaking time!!!