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Tuesday, May 25, 2010

Whoops! Mayor Jackson, City Back Out of Chinese LED Deal After Key Figure's Conflict of Interest Emerges

Posted By on Tue, May 25, 2010 at 11:55 AM

Hi, sir. Do you have any conflict of interests with Chinese LED manufacturers? Would you like to help us?
  • Hi, sir. Do you have any conflict of interests with Chinese LED manufacturers? Would you like to help us?

When last we peeked into Cleveland City Hall, Mayor Frank Jackson was jamming his proposal for a 10-year, no-bid deal with Chinese light bulb maker Sunpu-Opto through council while General Electric was counting the ways it’s getting shivved in the deal.

But another drama has been brewing over Peter Tien, the behind-the-scenes player who brokered the pact. At issue is Tien’s ever-evolving role: Shortly after the New Jersey-based consultant was credited with arranging the marriage, he revealed that he would be president of the firm’s Cleveland-based North American subsidiary.

(Note: The deal has since been nixed, probably because of this exact concern, though the city is being more vauge publicly:

Cleveland Mayor Frank Jackson on Monday killed a controversial, no-bid contract with a Chinese LED manufacturer because he thinks he "tainted" the process when he announced the deal in March while his staff was still seeking responses from other companies.

This, to cities not hailed for their public-service crimes, is what’s known as a conflict of interest.
Tien was a no-show at the May 17 finance committee meeting where the deal was discussed. The mayor’s office said he was sick.

“You say Peter Tien’s got a stomach ache?” Councilman Michael Polensek shot back. “Well, I can assure you he would’ve had one had he been here...Because I want to know who is Peter Tien? And who is Sunpu-Opto USA? Because that’s who we’re going into business with.”

Tien has declined to talk to local press, except for those who stumble upon his direct phone number online.

He confirmed in a call with Scene that he would be part owner of the U.S. operation, but that Sunpu-Opto would remain the principal owner of the North American branch. He added that he was originally approached by Sunpu-Opto, but declined to elaborate on when negotiations took place or what they entailed.

“All we’re really trying to do is something good for the city,” said Tien, apparently in reference to Beijing. Or possibly Trenton. He declined to continue with the interview.

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