Former South Bend, Indiana Mayor Pete Buttigieg, U.S. President-elect Joe Biden’s candidate for Secretary of Transportation, reacts to his nomination as Biden looks on during a press conference on December 16, 2020 at Biden’s interim headquarters in Wilmington, Delaware, USA .
Kevin Lemarque | Reuters
Pete Buttigieg, Joe Biden’s election as Secretary of Transportation and former mayor of South Bend, Indiana, received presidential campaign donations from executives of companies that had public works contracts with the city while he was running it.
A CNBC review of dozens of the city’s infrastructure contracts during his second term as mayor from 2016-2020 shows that under Buttigieg, some of the city’s spending went to contractors who would later become donors to his presidential campaign, which he launched in 2019.
If approved by the US Senate, Buttigieg, as head of the Department of Transportation, would be responsible for driving the incoming administration’s infrastructure proposals forward.
Buttigieg is 38 years old and is considered a rising star in the National Democratic Party. His role as transport secretary could strengthen him if he aspires to a higher office again.
Several of the contractors produced new roads, bridges and buildings for the city. South Bend’s latest budget is over $ 350 million. The Department of Transportation will start the new year with a budget of over $ 80 billion. Buttigieg proposed a $ 1 trillion infrastructure plan when he ran for president.
Data from the bipartisan Center for Responsive Politics shows Buttigieg raised nearly $ 100 million during his presidential campaign. About $ 2 million came from real estate donors.
A report from the Center for Public Integrity and progressive media company The Young Turks shows that Buttigieg received similar contributions from city entrepreneurs when he first ran for mayor in 2011. In this case, potential contractors gave something to his political organization, and they then received funding agreements from the city after submitting competitive bids. These offers were then approved by the Public Works Authority.
The Buttigieg team answers
After CNBC finalized most of the contracts and resulting contributions to the Biden transition team, a Buttigieg spokesperson sent CNBC a detailed response. The representative declined to be included in this story.
The spokesman said Buttigieg was not involved in the projects while noting that the companies did business with the city before Buttigieg became mayor. The spokesman also said leaders have run other Democratic presidential campaigns in the past, including Bidens, Hillary Clintons and Barack Obamas. Some also gave up to Republicans.
“Pete avoided delving into who got those contracts for that very reason. And I’d also like to point out that on Pete’s first day as mayor, he put in place a code of ethics and signed a responsible bidder regulation in 2018 to ensure that taxpayers’ dollars are preserved efficiently spent by responsible contractors, “said the Buttigieg spokesman.
The spokesman noted that Buttigieg signed an executive order in 2012 that stipulated that any government employee, including himself, would not knowingly solicit or receive gifts or favors from any person who has a business relationship or seeks business from a city authority.
“You link to contracts that have been approved by the Board of Public Works, which meets in public, does its business in public and approves those contracts through an open and transparent procurement process that goes through a bidding process, and as I said earlier – has little involvement from the mayor, “said the representative.
CNBC provided the City of South Bend with details of most of the contracts approved by the Board of Public Works and the executives who later contributed to Buttigieg’s presidential campaign. A spokesman defended the company.
“Each of these firms is highly regarded and has a local reputation for providing quality services to the city and residents of South Bend,” Mayor’s press secretary Caleb Bauer told CNBC. “Each of these contracts also went through a professional procurement process, which is public and transparent, before being approved by the public works agency, which is governed by state law.”
Still, some Democrats expect Republicans to make a big deal out of the contributions Buttigieg has received from contractors.
“He’s been charged with conflicts of interest, and if the Republicans hold the Senate, he’s going to go through a very, very tough ratification process,” said veteran Democratic strategist Hank Sheinkopf.
Companies and contracts
In 2017, construction company Walsh & Kelly signed a $ 600,000 contract with South Bend for a future Courtyard Marriott hotel. Two years later, the company received contracts valued at just over $ 2.4 million from South Bend. The hotel opened in 2018.
Walsh & Kelly President Kevin Kelly contributed $ 2,700 to Buttigieg’s presidential campaign, according to CRP data. This is almost the maximum contribution a person can legally make to a campaign.
Walsh & Kelly did not return comments-seeking calls.
Arne Sorenson, CEO of Marriott, gave Buttigieg’s campaign the maximum amount of $ 2,800, records show.
A Marriott spokeswoman defended Sorenson’s donation to Buttigieg’s political organization.
“Arne Sorenson personally supported Pete Buttigieg’s presidential campaign because his wife and children were inspired by his campaign,” Elynsey Price, a spokesman for the hotel chain, told CNBC. “Whatever was going on near or in relation to the South Bend hotels would have been the responsibility of our franchisees or owners, not Marriott.”
South Bend real estate development firm JSK Hospitality closed one of its largest deals in 2018 when a subsidiary of the company bought the former College Football Hall of Fame building in town for over $ 525,000, according to the South Bend Tribune. The CEO, AJ Patel, gave $ 1,000 to the Buttigieg campaign. The Courtyard Marriott is part of the company’s hotel portfolio.
CNBC was unable to leave a message on JSK Hospitality’s general voicemail box on Tuesday because the voicemail was full. The same was true of Patel’s line. Instead, CNBC left a message for the company’s CFO, who didn’t respond to a request for comment.
In 2017, the city reached an agreement with Epoch Architecture to build a new fire station in South Bend. The company agreed to make payments from the city of over $ 280,000 for the project. The director of the engineering and architecture firm, Kyle Copelin, later gave $ 500 to the Buttigieg campaign, records show.
Copelin did not respond to a request for comment.
In 2017, the city signed at least three contracts with Jones Petrie Rafinski, an architecture and engineering firm with offices in South Bend. The company had over $ 200,000 worth of business with the city that year. Two years later, the company’s vice president David Rafinski donated $ 500 to Buttigieg’s presidential campaign. His company also had other contracts with South Bend in 2019.
Rafinski told CNBC that he has no interaction with Buttigieg’s executive team while his company works for South Bend.
“We have been a customer of South Bend since Pete was in high school,” said Rafinski. “The work we do is done through the Board of Public Works. We had no interaction with Pete at all with our work. It was all through the Board of Public Works.” Rafinski said he supported Buttigieg’s presidential campaign because he believed the former mayor’s “compassion” was needed in national politics.
South Bend also signed a consultancy agreement with the Canadian company Stantec in 2017. The order was valued at over $ 105,000. The agreement with the design and engineering firm appeared to go through the nearby Chicago offices. Later, Michael Toolis, who is a Stantec vice president according to LinkedIn, gave $ 2,000 to Buttigieg’s presidential campaign. Toolis was once employed by VOA Associates, a Midwestern design firm that previously worked at the University of Notre Dame. VOA was taken over by Stantec in 2016.
“The company does not allow political contributions to candidates on its behalf,” Stantec spokeswoman Laura Leopold replied in a one-line email to questions from CNBC.
American Structurepoint, an engineering firm headquartered in Indianapolis, won at least seven $ 300,000 contracts in 2018 for consulting and other services for South Bend. Greg Henneke, the senior executive vice president, gave Buttigieg’s presidential campaign $ 2,700 a year later.
Both Stantec and American Structurepoint had contracts with the city in 2019.
An American Structurepoint spokeswoman did not respond to a request for comment.