An employee of the global accounting firm that was awarded a no-bid contract to grade applications for the state’s next round of pot shop licenses is also a partner in one of the 21 groups that secured a spot in the upcoming lottery to determine the winners.
Hamd Kamal works as a risk management consultant for KPMG, which is getting nearly $4.2 million through a no-bid contract with the Illinois Department of Financial and Professional Regulation, the agency that oversees dispensaries. All told, 937 candidates submitted 4,518 total applications seeking dispensary licenses.
Kamal is also listed as a manager of EHR Holdings LLC, an upstart pot firm that also counts former Chicago Police Supt. Terry Hillard as a backer, according to records kept by the Illinois secretary of state’s office. EHR’s principal address is a Near West Side head shop, Smoke Stop, that’s also run by Kamal.
Kamal’s LinkedIn account stated last week that he’s a risk consultant at KPMG, though the reference to the firm has since been wiped from the page.
Like the other 20 firms in the lottery, EHR earned perfect scores on the applications that represent its five chances in drawings in three of the 17 possible regions across the state.
The news that a KPMG employee is also part of a firm that’s secured five spots in the dispensary lottery comes as lawmakers and applicants continue to pepper Gov. J.B. Pritzker with concerns about the firm’s contract, methods and how the application process shook out.
KPMG spokesman James McGann said Kamal “is an employee but he was not part of the engagement team that scored the applications.”
He added: “The scoring process was objective, following the state’s criteria, with a blind scoring methodology. The team scoring the applications would have no knowledge of the names or affiliations of applicants. A separate team scored certain aspects of the application, such as social equity.”
EHR spokesman Eric Kowalczyk said the firm was formed last July, seven months before KPMG signed its initial contract with the IDFPR.
“The EHR team learned of KPMG’s selection at the same time as the rest of the state when it was published in the newspaper,” Kowalczyk said, pointing to a news report in July. “In fact, EHR was made aware KPMG only learned of any association two days ago.
“As with every submission, by every applicant who applied for a license, EHR’s application contained no information that could be used to identify the members of EHR or their employers,” added Kowalczyk, who claimed the firm followed state rules “to the letter.”
Despite Kowalczyk saying KPMG just recently learned of Kamal’s ties to EHR, Pritzker spokeswoman Jordan Abudayyeh noted that “KPMG had a plan in place to ensure that any potential conflicts of interest were addressed and did not influence the process. They are a large international firm with experience ensuring there aren’t conflicts of interest.”
Since the final contenders for the highly sought after dispensary were announced last week, losing applicants and lawmakers almost immediately started raising alarms.
The legalization law was passed to benefit so-called social equity applicants, who earn that status by living in areas that have been disproportionately impacted by past drug enforcement, having a minor cannabis conviction or meeting other criteria. The aim was ultimately to create more diverse ownership in an industry dominated by white men.
But KPMG has been one of the big winners as the state moves to dole out new recreational weed licenses.
In addition to the IDFPR deal, KPMG was awarded another no-bid contract by the Illinois Department of Agriculture valued at $2.5 million. Under that contract, KPMG is grading applications for licenses to grow, transport and infuse cannabis products. Like the dispensary licenses, all those permits have also been delayed by the coronavirus pandemic.
Both Democratic lawmakers and applicants of color who saw their bids rejected slammed KPMG during a news conference Tuesday, framing the grading system as tainted as they urged Pritzker to delay the lottery. What’s more, former state Sen. Rickey Hendon referenced the fact a KPMG employee was an applicant without using Kamal’s name.
“The system is flawed. The system needs to be corrected,” noted Antonio Williams, a Black social equity applicant who said KPMG “needs to be held accountable.”