Saturday, April 21, 2007

Investigative Report

Lost Slots License But Won $2 Million Consolation Prize

CLT Efficient Technologies Group …. Who Are They?

After a blink-of-an-eye RFP bidding process, CLT Efficient Technologies was awarded a multi-million dollar energy consulting contract with the City of Pittsburgh. Under the terms of the contract, CLT will guarantee savings of $542,000 a year to the city’s light bill. The city will in turn pay that savings to CLT for the first four years, but will retain all future year’s savings once CLT is paid off.

What a lucky break for Pittsburgh. Considering the city’s RFP went out at the end of the year, giving interested companies only a couple of weeks to respond, and considering the bid deadline was during Christmas Holiday…. It is no wonder only two of the eighteen Pennsylvania firms licensed to do such work actually applied.

So who is CLT? How were they able to put together a winning bid in lightening speed at the 11th hour of the 12th month during Christmas no less?

CLT’s founding investor is Charles Zappala, uncle of Allegheny County District Attorney Stephen Zappalla, Jr. and brother to a former Chief Justice of the PA Supreme Court. He was a contributor to Bob O’Connor in 2004 and is an investor/businessman who’s been involved with a wide range of area companies and projects. He’s had some hits and he’s had some misses.

One fairly big miss involved $215 million dollars, Ohio’s Bureau of Worker’s Compensation (BWC) and MDL, an institutional money management company where Zappala was a Shareholder and Director. Seems the worker’s compensation fund monies were invested in one of MDL’s high-risk funds which tanked, leaving Ohio’s Inspector General none too pleased about the loss. In addition, MDL used the BWC funds as collateral to borrow an additional $5 Billion or so (yes, that’s with a “B”), which it then lost.

Closer to home and closer to the present, Zappala chaired the Regional Asset District (RAD), but subsequently resigned that post to partner with Forest City Enterprises which was vying for the slots license to be awarded for the City of Pittsburgh. Again, Mr. Zappala’s timing was just a tad off on this one too. Forest City lost out to Don Barden’s Majestic Star on December 20th, 2006 when the state awarded Pittsburgh’s casino license to Barden instead of Zappala and Forest City.

Coincidentally, just a few days later, the bidding time for Pittsburgh’s energy consulting RFP would close and Zappala’s CLT would be the lucky company to win that bid. Now it’s hardly the billions of dollars associated with the high-stakes world of gaming or worker’s compensation fund management. (Could they be one and the same thing?) But a couple of million dollars is nothing to sniff at no matter what your net worth. It’s certainly a suitable peace offering, certainly a respectable consolation prize. A real “win-win” situation for everyone involved.


Smitty said...

I share your sympathies for Charlie Z.Don't count him out yet.The attempt by the two disgruntled casino bidders to take away Barden's license will be decided by the PA State Supreme Court currently run by Zapalla family friend and protege Chief Justice Ralph "pay raise" Cappy. Forest City is still in the hunt as long as the "Supremes" are a factor.

YinzerBoy said...

Such an obvious lay-up for CLT. Johnson Controls had a snowball's chance in h*ll of getting this, CLT's bid notwithstanding. I wouldn't be surprised if Zappalla and Geanopulos told the city to call JCI for a bid ... to give the illusion of "competition." Siemens probably hung up the phone laughing.

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