Competitors complained about contractor tied to Poplar Bluff official

POPLAR BLUFF, Mo. -- Two Muskegon County, Michigan, technology companies claim Information Systems Intelligence had an unfair advantage when receiving government contracts during Heath Kaplan's time as chief financial and technology officer.

The Daily American Republic also received a document showing Kaplan, now city manager of Poplar Bluff, signed a promissory note in 2012 on an almost $28,000 loan from ISI owner Ryan Leetsma that isn't due in full until June. An anonymous source provided the document Friday.

The DAR confirmed the note's authenticity with Muskegon County notary and county employee Lisa Chalko, who oversaw Kaplan signing it.

In the document, Kaplan promises to repay $25,000 at an interest rate of 4 percent per year. The amount later is crossed out and a handwritten amount of $27,950 added.

The only information about the purpose of the loan is the statement, "In return for valuable consideration received, the undersigned Heath Kaplan, the 'Borrower,' promises to pay to Ryan Leestma, the 'Lender,' the sum of $25,000.00, together with interest ..."

Calls to Kaplan and Leetsma were not returned.

'Stacked deck'

Also during Kaplan's tenure in Muskegon County, ISI may have received as much as $13 million in government contracts between 2011 and April, when commissioners abruptly broke off relations with the company -- its general contractor for technology work.

County officials said last week accounting firm Plante Moran is expected to review purchases from ISI, which also received more than $3 million in technology contracts from Poplar Bluff since August.

No bids were solicited for any of them.

Also while serving in his previous position for Muskegon County, Kaplan allegedly warned ISI competitor Corlnet it no longer could do business with the county if it chose to pursue legal action against ISI.

The information is contained in a deposition given by Kaplan in June 2014, about a month before he interviewed for and was hired as Poplar Bluff city manager.

Kent Davies of Red Five, another Michigan-based technology company, said it was clear the deck was stacked in favor of ISI.

Bids were written to the strengths of ISI, he said, adding he filed protests with Kaplan about the way contracts were awarded to his competitor.

His complaints were swept under the rug, Davies claimed.

Muskegon County acquired a technology infrastructure from ISI that is so complex, it requires a consultant for day-to-day management, Davies said.

The county also bought some of the same equipment Poplar Bluff has.

ISI provided the Muskegon County consultant until its relationship with the county ended in April.

In Muskegon County vs. Corlnet, the case in which Kaplan's testimony appears, Muskegon County demanded that Corlnet return $80,000.

Corlnet alleges a communications infrastructure project was stopped in retaliation for litigation the company later brought against ISI.

"We cannot comment on any pending litigation, but we know that as the facts come out, the citizens of Muskegon County will learn that their tax dollars have been wasted," Corlnet owner Hank Betten said.

In court documents, Kaplan says the county did not ask for the money back because of ISI.

Instead, the money was given to Corlnet as a "safe haven" -- not to pay for work invoiced by the company.

The county's family circuit court had $80,000 remaining in state grant money.

If the money wasn't spent by the end of the fiscal year, Muskegon County would have been required to return it.

So Kaplan requested an invoice from Corlnet to prove an expenditure had been made with the remaining $80,000 grant money.

The Corlnet attorney asked Kaplan about his plans to spend the money on the labor purchased from Corlnet.

"No, meaning to get the money out of the county's bank account," Kaplan responded in the deposition, later saying, "I needed help in getting the money out of the county's hands, and then I needed to determine in the future what we'd use the money for."

Corlnet attorneys say work already had begun on the infrastructure project when Muskegon County demanded the money back, providing documents and email exchanges between Kaplan and the company.