Report: No-Bid Metro Contracts Awarded to Company with Ties to Top Mayoral Advisor

NASHVILLE, TN — An investigation by The Tennessean revealed that most of Metro Nashville's bond underwriting contracts have been awarded to a company that employs the son of one of the top aides to Mayor Megan Barry and her predecessor.

The newspaper reports that four of the last five bonds issued by Metro were underwritten by Minneapolis-based Piper Jaffray. Piper Jaffray employs the son of Rich Riebeling, who was finance director under former mayor Karl Dean and is currently Metro's chief operating officer.

Those underwriting contracts were awarded under a no-bid or "negotiated" process; Metro switched from a competitive to negotiated system for its bond issuances during Dean's mayoralty and when Riebeling led the finance department. Since 2011, Metro has used a competitive process only once and the negotiated process 17 times, of which Piper Jaffray was the lead underwriter on nine and underwrote at least a portion of 16 others, according to The Tennessean's analysis, and earned $3.07 million in fees for those deals.

Riebeling's son, Michael, works in the public finance division for Piper Jaffray's Memphis office, with which Metro conducts its business.

The Tennessean found that until 2014, even with the negotiated process, Metro used a variety of underwriters, but that Piper Jaffray has been the underwriter on all but one bond issued since then. Michael Riebeling began working for the firm in 2012.

While officially, Metro policy "prefers" competitive deals, there is no obligation for the finance department to use them.

Both Piper Jaffray and the elder Riebeling say careful steps have been taken to avoid conflicts of interest in the matter — Michael Riebeling does not work on Metro issuances, the company says, and he works on salary, so he does not benefit financially from the deals.

Nevertheless, Metro is changing its bond policy. Riebeling will no longer be involved in underwriting negotiations, which will instead be led by finance director Talia Lomax-O'dneal, who said she will ask the firm that advises the city on financial matters to review underwriters and prepare a list of pre-approved underwriters annually.