Brothers fighting over ownership of composting company
A family squabble could become a big headache for new Spokane Mayor David Condon.
Two of Condon’s brothers, who formed a compost operation that has a $2 million city contract, are fighting over ownership of the company, Barr-Tech. In addition, one of the brothers is involved with a new competing company, and both firms could end up vying for the same city contract in the future.
City officials and company representatives say the lawsuit shouldn’t affect the city, but it does highlight potential conflicts of interest for a mayor from a large, prominent family, who has nearly 50 first cousins and eight brothers and sisters, some of whom have extensive business interests.
One of Condon’s brothers was involved in a controversial land deal that became an election issue in a county commissioner race in 2008. Among his cousins are the owners of the White Elephant stores. Now that he’s mayor, one of his employees is his first cousin, Assistant Public Defender Bridget Condon.
“I didn’t know that until I was ringing a bell at Fred Meyer and she came up to me and says, ‘Hi boss,’ and I said, ‘What do you mean?’ ” the mayor said. “People think it’s crazy, but when you do live in a big family, there’s times where I don’t see my siblings for six months or seven months and we live literally two miles from each other.”
Contract approved under Verner
Condon notes that the Barr-Tech contract was approved by a different city administration and that any future contracts will go through the same public bidding process and review by City Council.
He also has requested that the city’s Ethics Commission review the relationship in hopes of preventing conflicts.
Barr-Tech has accepted organic yard and food waste collected curbside in the city since March – two months before David Condon officially announced his bid for mayor – under a two-year contract estimated to cost about $430,000 a year. The City Council approved a separate three-year deal with Barr-Tech in December to accept the organic waste collected by the city-run Spokane Regional Solid Waste System. That contract was estimated to cost the system about $2 million.
The city and its solid waste agency had been looking for a company closer to Spokane to accept so-called “green waste.” Since the city was forced to close its own composting operation in 2002, it had shipped the waste to Oregon, and more recently Royal City, Wash., which is 140 miles away. Barr-Tech’s composting operation is in Lincoln County, cutting transportation costs.
The topic of the lawsuit between Condon’s brothers wasn’t discussed by the council in approving the contract in December, but the relationship between the new mayor and the ownership of the company was.
An assistant city attorney told the council that the City Charter requires disclosure of potential conflicts of interest but that since Condon hadn’t been sworn into office, it wasn’t yet an issue.
“I just want to make it clear to this council that there is a Condon relative that’s a part of Barr-Tech,” said then-City Council President Joe Shogan, who cast the only dissenting vote on the three-year contract.
Other council members said Barr-Tech offers a better deal, environmentally and financially.
“The logic of not hauling compost all the way across the state and developing local jobs sounded like a good deal, particularly when it saved the city money on the contract,” said former Councilman Richard Rush, who supported the contract.
Councilman Jon Snyder, who also voted for the contract, said he wasn’t bothered by the relationship between the brothers because David Condon wasn’t yet in charge.
“It will be the next contract for Barr-Tech that needs scrutiny,” he said.
Brothers battle over ownership
In a suit scheduled to go to trial in November, Larry Condon accuses his brother Ted Condon and their business associate Jack Gillingham of breach of contract, fraud and defamation. He says he was promised a one-third ownership stake in Barr-Tech but was forced out.
“This was on the verge of launching. This was going to be a highly profitable enterprise,” said Larry Condon’s attorney, Bob Dunn. “His brother decided that making Larry an equal would be economically untenable.”
An attorney representing Barr-Tech, Bill Symmes, noted that Barr-Tech and Ted Condon have denied all the allegations in their official response to the lawsuit.
“Other than that, I can’t discuss the ongoing litigation,” Symmes said.
The suit alleges that Larry Condon did much of the work to get the company on its feet.
“I’m not proud of the lawsuit with my brother, but a handshake is a handshake,” Larry Condon said.
Ted Condon said Larry Condon was an employee and that there was never any deal or promise made of an ownership stake in the company.
“Larry’s my brother, and he had just lost his job with HearthBread,” Ted Condon said.
Larry Condon is the former co-owner of HearthBread, a bakery that was sold to the Coeur d’Alene Tribe and later folded.
Attorneys on both sides say the mayor has never been involved in the company. David Condon said he’s never even visited Barr-Tech’s compost operation.
Since leaving Barr-Tech, Larry Condon has formed a new company, PacifiClean Environmental, with SRM Development to handle organic waste.
Larry Condon said he can’t rule out bidding in the future on a city contract for green waste, but PacifiClean’s plans are not contingent on winning a city contract. He said PacifiClean’s plans are to build digesters that specialize in breaking down organic waste such as fatty oils and food waste that otherwise can complicate compost operations because of odor problems. He said it’s a portion of the business that he originally planned for Barr-Tech.
City administrators met with Larry Condon before and after David Condon’s election about building a facility near the Waste-to-Energy Plant that could use steam energy from the trash incinerator for potential side businesses, such as one that would sterilize medical waste. Plans also call for greenhouses that would use compost made from the organic waste. Larry Condon said he has avoided discussing his plans with the mayor to avoid conflicts.
That concept of creating a green business center near the Waste-to-Energy Plant emerged during Verner’s administration. Spokane Regional Solid Waste Director Russ Menke said he last met with Larry Condon about the idea in late November.
Menke said the regional system doesn’t have green waste to offer PacifiClean currently because it’s got a contract with Barr-Tech, and that if the city did become interested in a concept like PacifiClean’s it would have to offer a competitive bidding process.
Family focused on business
David Condon said the suit between his brothers is “the modern-day way of going out in the backyard and having a fistfight.”
“This is not the first time we’ve had lawsuits in my family,” Condon said. “They say don’t do business with your family. Well, apparently, my family didn’t read that rulebook.”
Even so, the mayor also has had business relationships with his brothers.
He founded a coffee stand business, called Coffee Brothers Inc., with Larry Condon in Boston in the mid-1990s when David was a student at Boston College. The mayor told the story of the business at his campaign kickoff speech.
“Small business was such a part of my life that going back to college in Boston my second year, my brother and I decided to open up a coffee shop in downtown Boston. So I’m not kidding you, we literally went to Costco and stopped off and got a coffee stand, drove across the country and set up our first coffee stand in downtown Boston. A few short years later we had four little shops.”
According to his financial disclosure form filed with the Public Disclosure Commission, David Condon’s only current business relationship with his brothers is a corporation called Seilbh. Condon said Seilbh, which means “possession” in Gaelic, according to an online Irish dictionary, was formed to manage some property left over from a railroad salvage company his father and brothers ran called Condon Brothers.
Condon’s father, John J. Condon, was a prominent dentist and businessman who was part-owner in a dental products company, according to Spokesman-Review archives. The Condon dental practice is now run by David’s brother, Michael Condon.
Condon touted his family’s business acumen when kicking off his campaign, noting that he started working for one of his father’s businesses, “Santa’s Tree Farm,” when he was 7 or 8 years old.
“Growing up there were three guiding stars from my mom and dad,” he told his supporters at his campaign kickoff. “They were family – I’m the youngest of 10 kids. Of course, it was family, family, family and then a little bit more family – community and business.”
Family members gave to campaign
Condon’s family members were generous contributors to his mayoral campaign.
Donations from Ted Condon were highlighted late in the campaign by supporters of Condon’s opponent, Mary Verner.
Two companies Ted Condon partially owns, including Barr-Tech, gave $4,000 each to a state Republican Party campaign fund just prior to the election. Two weeks later the party contributed $25,000 to Condon’s campaign. Verner supporters alleged that donations from Condon’s companies and others were made to avoid campaign contribution limits, and they filed a complaint with the Public Disclosure Commission. The Republican Party and Condon’s campaign denied the allegations and said the GOP never promised contributors that it would give money to Condon’s campaign.
Lori Anderson, the PDC’s spokeswoman, said on Friday that officials have not yet determined if the complaint will be formally investigated.
‘We choose not to talk about it’
In his campaign for mayor last year, Condon distanced himself from a controversial business dealing involving another of his brothers.
In 2008, the county’s purchase of land from David Condon’s brother, John Condon Jr., was highlighted by opponents of County Commissioner Todd Mielke’s re-election bid.
John Condon purchased 150 acres of land near Fairchild Air Force Base in 2001 for $65,000 and sold it to the county in 2007 for $600,000 to enable realignment of a railroad line off the base. The county used $200,000 from the state and $250,000 from the Air Force to help buy the land.
Critics questioned the cost and Mielke’s friendship with Condon. Mielke and other county commissioners defended the purchase as a way to prevent development near the base and noted appraisals that indicated the county didn’t pay too much.
David Condon said he never had an ownership stake in the property and never lobbied on behalf of winning government money to help buy the land when he worked for U.S. Rep. Cathy McMorris Rodgers, R-Spokane. He was, however, in meetings when the issue was discussed and he was representing McMorris Rodgers.
The mayor said he’s maintained good relations with all his brothers.
“We choose to not talk about it because, you know, when you’re sitting there at Thanksgiving dinner, it’s not real pleasant,” he said.
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