A North Carolina city official has resigned her post while accusing her colleagues of conflicts of interest regarding a potential deal with Baton Rouge-based Bernhard Capital Partners.
Shaw Group founder Jim Bernhard and Jeff Jenkins started Bernhard Capital following CB&I’s purchase of Shaw. The private equity firm has raised more than $2.6 billion since 2016.
Fayetteville (N.C.) Council member Tisha Waddell resigned from office this month while alleging that a potential deal between the city’s Public Works Commission and Bernhard Capital lacked transparency and was fraught with “conflicts of interest,” The Fayetteville Observer reports. Other city officials with PWC also allude to a lack of communication over the company’s offer and the key players involved, according to the local outlet.
Last year, Bernhard Capital Partners offered to pay $750 million to run Fayetteville’s utilities for the next 30 years while keeping the profits. Mayor Mitch Colvin arranged for Bernhard Capital representatives to meet with City Council members and members of PWC to discuss the potential deal, according to local reports.
PWC entered into a nondisclosure agreement with Bernhard Capital that prevented either party from sharing details of the potential impact on customers if the commission were to go into business with the firm. PWC asked to be released from the nondisclosure agreement in April, saying it wanted “to have a transparent conversation with our community,” and backed out of the deal the next month, citing a lack of clarity about the arrangement.
Waddell alleged Mayor Mitch Colvin and other council members had conflicts of interest because of connections to Bernhard Capital. In her resignation letter, she claimed Colvin had a close relationship with Columbia (S.C.) Mayor Steve Benjamin, who is associated with Bernhard and serves as an attorney with the Charleston Group, a law firm in Fayetteville and Raleigh, N.C. Jonathan Charleston, a Fayetteville attorney who also represents Colvin’s funeral home business, owns the group.
Waddell says Charleston held a fundraiser for Colvin with members of Bernhard present. She claims Colvin has been in communication with Bernhard without the involvement of council members.
On a local radio program, Colvin said he has a business relationship with Charleston. While Charleston hosted a fundraiser for him, he said he has not received any financial support from him or members of Bernhard.
Colvin suggested Waddell’s aspiration to run for mayor, which Waddell had not yet confirmed at the time, motivated her accusations. Bernhard Capital did not immediately respond to a request for comment from Daily Report.
“Throughout our involvement with the city of Fayetteville, we have conducted ourselves in a professional manner,” Bernhard Capital’s Jenkins said in a prepared statement to the Observer. “We strongly dispute any insinuation by the former councilwoman that we have done anything unethical or improper.”
There is no official word on whether the deal will move forward, according to the Observer.