With a federal grand jury now breathing down its neck and covert recordings emerging on WikiLeaks of its former chief compliance officer saying she won't go to jail for the company, disabled workers-program contractor, SourceAmerica is fending off the damning accusations of a San Diego man who tells an incredible story of alleged bid-rigging, cronyism and mafia-like activity that CNN says could lead to racketeering charges.
The company denies the charges levied by Ruben Lopez, CEO of Bona Fide Conglomerates. But Lopez insists he lost a lucrative cleaning contract at a federal courthouse in Las Vegas that allowed him to employ 10 severely disabled workers through alleged malfeasance and bid-rigging. Lopez's contract was a small part of the $3 billion program AbilityOne program, $2.3 billion of which the federal agency outsources to the private sector through, SourceAmerica, itself a private-sector organization.
Following is my exclusive interview with Lopez, held Friday at his office in El Cajon, Calif. It is his first interview since CNN broke the story last week about the U.S. Department of Justice-led gran jury investigation into alleged wrongdoing at AbilityOne and SourceAmerica.
Thom Senzee: You include a commendation from SourceAmerica in materials you share with the media. How do you reconcile showing that you're proud of a commendation from a company you say acts life the mafia with your accusations?
Ruben Lopez: I wouldn't say I'm proud. All I'm evidencing is that I work well and that they are recognizing that.
So you're just pointing out hypocrisy and contradictions in their statements of rebuttal that reflect negatively on you?
Should being on the board of directors by necessity exclude someone from receiving a SourceAmerica contract?
In this context, yes--of course. Most assuredly. According to the information that [former SourceAmerica employee] Jean Robinson provided to us, it is a clear conflict of interest. One should not be a director of the corporation awarding the contracts and an officer of the corporation receiving the contracts. It is a clear conflict of interest.
But aren't there boards across the nonprofit world, in business and government where a board member simply recuses themselves from a particular vote when there's a conflict of interest? One would presume that's what the SourceAmerica board does when directors' companies are competing for a contract their voting on. Isn't that enough?
You would imagine so, that would be the reasonable thing to do. Also AbilityOne, whose mission was to oversee them, should be providing checks and balances.
Are there statutes or at least bylaws to ensure conflicts of interest are guarded against in the contract-awarding process at AbilityOne and SourceAmerica?
The scandal is that it's all legal. The people that make the regulations are SourceAmerica themselves. Let's say you decide that you are going to have this beautiful cake all to yourself and you get to decide how many pieces of cake your going to have today and tomorrow, and no one else can touch it because you make all the rules. That's what;s going on here.
Is there really that much statutory latitude afforded in this multibillion-dollar federal program to a private company?
Yes. Yes there is.
So, this falls on congress and the president?
Exactly. So where have you seen a private company--SourceAmerica--composed of federal contractors controlling the purse strings of a federal entity?
You're saying that the federal government has said, "hey SourceAmerica, here's a $2.3 billion checkbook; enjoy. Knock yourself out?"
Why do you think SourceAmerica's attorney, Jean Robinson approached you in the first place?
Well, we had a settlement agreement with SourceAmerica, which designated her as the compliance official; and she was also the SourceAmerica chief compliance officer. She was doing her job. No doubt in SourceAmerica's view, she was doing her job a little too well. She was just being honest.
In the conversations you secretly recorded, Jean Robinson describes a situation that sounds like the wolf guarding the henhouse. Do you think she actually knew you were recording the conversation?
What do the [AbilityOne and SourceAmerica] boards look like?
I'm just going to say it's incestuous.
Would you say that AbilityOne's executive director, Tina Ballard is the enabler of SourceAmerica's alleged wrongdoing?
The principal, according to Jean Robinson's information. On the recording she will give you ample details.
While arranging for this interview, I was given the impression that you believe the reason SourceAmerica's former chief compliance officer, attorney Jean Robinson gave you so much damning information about her then employer was because she was trying to protect herself from the possibility of future prosecution. Is that correct?
You are correct, but the reason why she approached us was because she had to. She was assigned to by SourceAmerica itself.
With a settlement offer [to your civil lawsuit against the company]?
With a settlement offer. Now, once that happened, while this was in progress--remember, federal agents began to visit her office.
Why did they do that?
Because they realized there was corruption.
Were they acting on a tip from you?
[Long pause] The major reason why she began to talk to them through me, and you will hear in her own words [on the WikiLeaks recordings], "I am not going to jail for them. I am not wearing orange jumpsuits for them." That is the answer to your question.
Did you complain to federal agents, and did that initiate the investigation into SourceAmerica--or do you hope that it did?
I am an integral part of the investigation and I am a cooperating witness.
You don't want to say whether you were the initial contact, the tipster?
I could say that and the answer is yes.
Do you think that Jean Robinson could end up as a scapegoat? I mean, she's got a big target on her back now.
It depends on what you mean by that. SourceAmerica certainly is blaming her for the situation, the government investigations, the media coverage. But SourceAmerica cannot blame her for the things its officers, directors and employees did. No doubt, as a result of things Jean Robinson herself said, and the recordings and what she conveyed to federal agents directly, I would imagine that immunity is a very negotiable prospect for her.
Why do you think she's gone silent?
I cannot speak for her intentions or her mindset.
What was you first indication that SourceAmerica was [allegedly] acting in bad faith?
Ground-zero: Loyd D. George Federal Building, Las Vegas. That's when I could see exactly how the game was played.
That's when you lost your cleaning-and-maintenance contract after having it for 10 years?
Exactly. I had the contract. Only about a month before this contract was to become available for bids to the public, I was called by Sylvia Ortiz with NISH [National Institute for the Severely Handicapped, the entity from which SourceAmerica took over for AbilityOne through privatization of its management]. She said, "Ruben, this account is going to the AbilityOne program." I said, "Wonderful. As you know, I am bona fide, so I'd be happy to vie for it.
So you were okay with that, you were prepared to bid for the contract?
Absolutely. But she said, "Sorry Ruben, It's already been designated to this nonprofit agency here in Vegas." I said, "Sylvia, what are you saying. It has not even yet been made public? Do you hear yourself?" And I will never forget what she said next. She said, "Ruben, it is what it is."
Moving forward, I called the executive director of AbilityOne for the Pacific Area and said, "I know you're going to deny it, but this is what Sylvia said. The funny thing is the quality-control coordinator confirmed that she heard what Sylvia said from the next cubicle over.
When we took this case with this obviously abhorrent process of allocating the contract to a predesignated contractor, the federal judge did the math for the bid allocation scoresheet and said, Bona Fide won. Bona Fide won. There's no question.
Is this a contract-awarding formulation that is coded numerically?
By percentages. This is Alice in Wonderland. Only the Pacific Region had this methodology for awarding contracts. The rest of the country did not use this method. But even by their methodology, the judge saw that we won, yet someone else was given the contract. The judge said, "He's prevailed. What are we doing here?" That's in the transcript of the court proceedings.
Do you think that management of the AbilityOne program should be returned to the government, or should it remain in the private sector--or should it be scrapped completely?
The program has fantastic goals. In a nutshell, a private organization should not control a federal entity. A private organization shouldn't have the power to distribute billions of dollars of federal contracts. A private organization should not have the ability to set forth regulations, to set forth bylaws to set forth grants, to establish pilot programs completely on its own and with the protection of a federal agency such as the AbilityOne Commission.
How badly do you think the disabled workers, whom you say you care very much about, how badly have they been hurt by the alleged cronyism and alleged bid-rigging at SourceAmerica?
Let's move away from the qualifier. I don't say I care about them. I care about them.
Okay, let's put that to the test: I know from past reporting that you have the option as an AbilityOne contractor to dock your disabled workers' pay based on performance. Many of your competitors do just that. It's allowed by the program because these are people with severe disabilities. Have you ever taken advantage of that option? Have you ever docked your employees' pay for low performance?
Never. Not a penny.
But you could increase your bottom line if you did. Some of your competitors do it, why not you?
The government pays me to do a job and to pay my people fairly. I could if I wanted to. But you know, I'm in this program for a purpose. And I'm going to fulfill it.
What is that purpose?
This program is supposed to benefit people with severe disabilities. The government gives you this money to do that. If you betray that, it would be akin to you being left to care for children and you do not feed them the food their parents left for you to give them. Instead, you eat the food yourself and the children go hungry.