THEY have just signed over £27.5 million. But they are not sure to whom.
Two full years after an historic corruption probe, councillors in North Lanarkshire this week agreed a massive public procurement contract for security systems.
The local authority, The Herald can reveal, did the deal with a firm ultimately controlled by the Wall Street family business of the architect of Donald Trump’s tax cuts, his newly named nominee for deputy Treasury Secretary, Justin Muzinich.
Justin Muzinich
But it did so after a highly unusual split vote, with opposition SNP members demanding a delay so officials could answer questions by a veteran Labour anti-corruption campaigner, Tommy Morgan.
Mr Morgan demanded to know how council officers could guarantee the probity and good standing of the recommended contractor, Securus Group, which set up an office in North Lanarkshire earlier this year.
He told councillors answers were needed before the contract could be signed off. He said: "We need to cross the t’s and dot the i’s. We are putting the cart before the horse. We are closing the door after the horse has bolted."
Mr Morgan's concerns echoed back to the procurement corruption controversies which rocked North Lanarkshire - under a different administration - just two years ago. That is because some of the firms featuring in the CCTV tender had been mentioned in an historic internal audit report on corruption seen by this newspaper but shared with only a handful of officials and councillors in the local authority.
As his fellow councillors looked at their hands or their notes, he said: "We are custodians of the public purse.
“I should be allowed to ask questions when a contract of this magnitude appears and certain names appear as tenderers that I have come across before.
He added: “It is worth mentioning that some of these firms appeared in a well-documented internal audit report last year on corruption. I make no allegations here...but I seek answers.”
Securus Group narrowly beat rival SPIE Scotshield on both price and quality. Scotshield has a long history of selling to North Lanarkshire, securing some £18m in contracts over the years.
But those deals came under intense scrutiny after the former leader of the council, Jim McCabe, admitted to this newspaper that he was “friends” with Scotshield’s one-time owner, Tony Kane, and that his daughter worked for the firm. Mr McCabe denied helping friends, including Mr Kane, get contracts, declaring “I am not corrupt”.
Jim McCabe
However, a whole series of allegations in this newspaper ended audit report in to corruption Mr Morgan cited in the committee.
That report found “no specific evidence” that Mr McCabe had influenced procurement.
It did, however, force a massive overhaul of anti-corruption procedures in council procurement. Those, officials told councillors on Wednesday, had been applied to the new contract Scotshield lost.
Mr Kane sold Scotshield to a business called SPIE in 2014. This March he became a director of a new company, the same new company, Securus, which won the latest North Lanarkshire contract.
Councillors were not told Mr Kane was a director of Securus or, indeed, its chief executive. The Herald asked Securus to comment. It did not do so. Mr Kane was unavailable for comment.
Tony Kane
The Securus Group's website describes itself as a UK network "offering individual specialisms, bringing years of local history and experience into one overarching group." It now controls a local busines called Rodgers Securus, Companies House filings show.
The group, incorporated in late 2016, has transparent ownership. It has named a “person of significant control” or PSC at Companies House. This, effectively its controlling beneficiary, is another recently created entity called Securus Group Intermediate Company Limited in Manchester. And its PSC is Securus Group Holdings Limited, which is in turn controlled by the British subsidiary of Muzinich & Co. Inc. Muzinich & Co was not named by council officials in their contract recommendation.
The company, registered in Delaware but based in New York, is run by George Muzinich, a veteran Wall Street financier and debt expert.
His son Justin, 40, was president of the business before entering politics. The New York Times described him has having played a "central role in crafting and negotiating the terms" of Donald Trump's $1.5 trillion tax overhaul. Muzinich & Co had no comment.
Back at the infrastructure committee in Motherwell the Labour leader of the council, Jim Logue, successfully urged his party to show confidence in the newly reformed procurement team which recommended Securus.
Referring to Mr Morgan, he said: "I don’t accept we are closing the door after the horse has bolted,” he told the committee. “We have devised a framework so never again will we be having the issues we faced two years. This has been the determination since I became leader of this council to address all of those issues. I have absolute confidence in the whole procurement section."
Mr Morgan and SNP councillor Alan Stubbs, who tabled a motion to delay a decision, both stressed they made no allegation of against officials or any business tendering for the contract.
North Lanarkshire Council HQ
UPDATE: Securus Group issued the following statement following publication of the above story.
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