A UCAN mailing trumpeted the now-bankrupt Best Windows as a “best bet” based on a rigged study.
  • A UCAN mailing trumpeted the now-bankrupt Best Windows as a “best bet” based on a rigged study.
  • Story alerts
  • Letter to Editor
  • Pin it

The truism goes back centuries: “Hee that lies with the dogs, riseth with fleas.” But ten years ago, Utility Consumers’ Action Network (UCAN), the watchdog nonprofit attempting to dissolve while it is being investigated by the federal government, had not learned the lesson.

In 2001, a now-bankrupt company whose top two officials later pleaded guilty to fraud, Best Windows and Doors, installed for free $20,000 of double-paned vinyl windows in UCAN’s then-new headquarters. The next year, the consumer group sent out a mailing to 31,000 members and 30,000 consumers extolling the energy- and money-saving virtues of these windows but warning that companies selling them were often crooked.

Documents in my possession — verified by interviews with former and current UCAN employees — show that the cost of the mailing was $32,965.71. Best Windows and Doors paid $27,403.71 of that mailing; the rest was paid by the consumer group. This means that Best Windows and Doors had advanced more than $47,000 in cash and services to UCAN. (The two employees who handled the mailing, Jordana “Jodi” Beebe and Charles Langley, a whistle-blower now suing the consumer group, say they knew all along that Best had provided the windows for free.)

The nonprofit watchdog set up a purportedly blind test. A staffer, disguised as an ordinary consumer, solicited quotes from ten different dealers, who were supposedly unaware that they were participating in a test.

Best Windows knew UCAN was comparing prices and gave an artificially low price.

On the basis of the so-called test, UCAN made its recommendation of the best dealer. Lo and behold, the winner was Best Windows and Doors, which had paid most of the costs of the mailer. “Excellent qualifications and windows make this a UCAN ‘best bet,’” enthused the nonprofit watchdog in its mailing. It was a blatant quid pro quo.

Two factors make it even more blatant: (1) The fact that Best Windows and Doors had paid more than 80 percent of the mailing costs was never disclosed to the recipients; (2) Unlike other companies, Best knew full well it was participating in a test, and its bid was artificially low.

Alex Valdez was the Best sales representative who presented the bid in the test. “I knew that I was going out to give a bid for UCAN,” he says. “I was instructed by the owner of the company [Michael Chavez] to have no pricing or sales gimmicks — give them the lowest absolute price. We didn’t sell windows for that low a price.”

The Best Windows and Doors price the nonprofit quoted in the mailer was $7109. Chavez says that a normal quote would have been $9600. Chavez claims that after UCAN got the initial lowball quote, the nonprofit tweaked it to bring it down even more. I get conflicting stories on whether that happened, but Langley does say, “The whole study was skewed.”

Beebe, no longer with the consumer watchdog group, says, “The survey was forthright and accurate.” She initially claimed that she had not dealt with Best Windows and Doors about the mailing’s costs, but after I faxed her two letters showing otherwise, she had to admit she had. She considers Chavez’s gift of the windows as “a donation” that he had made after the test was completed. However, correspondence clearly shows that Chavez put in the windows in 2001, and the test wasn’t done until several months later. “This is ancient history,” she says, explaining her inability to regurgitate some details.

Langley, who was in charge of recruiting members, as well as doing much of the writing and analysis for the nonprofit, says he was following instructions of Michael Shames, cofounder and chief executive officer. Langley had a $30,000 budget for membership recruiting; Shames wanted it combined with the windows mailing. Langley argued that evaluating windows and dealers “had little to do with UCAN’s core mission. At one point we had a discussion. I said it doesn’t smell right. There is a potential conflict of interest. But Michael [Shames] said, ‘If you want to do your job, you have to do this mailing.’”

So Langley put together the mailing lauding double-paned vinyl windows and warning consumers to watch out for wolves in sheep’s clothing. “Here we were sanctimoniously telling people to watch out for wolves in sheep’s clothing, and the people we were promoting were wolves.… It’s one of the most shameful things I have ever done in my life.”

After only part of the mailings had gone out, UCAN got bitter complaints about Best Windows and Doors. The mailing was aborted. The nonprofit printed the consumer complaints on its website. Among many things, Best had been tied up with a Colorado-based rebate program that was charged with fraud in its home state and Wisconsin. (Initially, the head of the company disappeared to Costa Rica rather than face the music in the United States.)

In 2009, Chavez pleaded guilty to fund diversion and grand theft of personal property. He was sentenced to three years of probation and 180 days in custody. The jail sentence was stayed, but Chavez was ordered to make restitution to victims. Best went into Chapter 7 liquidation bankruptcy, and so did Chavez. One of Chavez’s top lieutenants, Joseph Fink, was sentenced to 120 days in custody and given three years of probation.

John Mattes, former San Diego TV investigative reporter, now an attorney, had interviewed Chavez in 2006. Mattes had asked about the rebate program and the mounting consumer complaints. “[Chavez] was wholly incredible; he used every defense in the book…everybody in the world had betrayed him,” recalls Mattes. At the Chavez sentencing, Mattes, no longer on TV, did a piece on Chavez as an embedded reporter for the watchdog group.

Shames finds it “vile and repugnant” that anybody thinks the UCAN/Best relationship was a quid pro quo. He claims that the nonprofit dropped Best when it used the mailing as a marketing tool, just as Consumer Reports denounces companies that use its reports in marketing promotions. However, a memorandum of understanding dated July 16, 2002, states how Best will pay $27,403.71 for “100,000 pieces to homeowners and UCAN members.” It is signed by Michael Shames and Michael Chavez.

  • Story alerts
  • Letter to Editor
  • Pin it

Comments

JustWondering April 11, 2012 @ 9:03 a.m.

Just think if this story had seen the light of day way back in 2001-2002, maybe just maybe we would not be saddled with the fraud UCAN has been all these year since.

Over and over I am amazed, or maybe just still naive on the ways frauds can be perpetrated on the public. Obviously the overarching theme is simple greed, but it's sad to read about those who knew a fraud was in progress but chose to remain silent. Are those who are aware, but remain silent as guilty as those who invent or facilitate these schemes???

0

Don Bauder April 11, 2012 @ 11:29 a.m.

I think the perpetrators are far and away the major villains. Those who may know about the fraud are probably working for very low pay and desperately need the job. They will rationalize their participation. There are degrees of this, of course. For example, telemarketers who know they are defrauding the elderly are almost as guilty as those running the operation, in my opinion. Best, Don Bauder

0

mikechavez April 11, 2012 @ 6:16 p.m.

First, the windows UCAN rec'd were not free. Michael Shames threatened to use UCAN'S newsletter to discredit the replacement window bus. if he did not get free windows for his new headquarters.Second, the company Best Windows had a twenty plus year track record for excellence ,as demonstrated by the State Contractor board file showing only a few RESOLVED COMPLAINTS from over 12,000 completed jobs. Third,UCAN renigged on it's joint marketing agreement after receiving over $50,000 in cash and goods from Best using an old -resolved complaint to justfy it's breach.Fourth, John Mattes' statement that the owner said "everyone in the world betrayed him" is easily proven to be false since the entire inerview was videotaped. Lastly, Best Windows was voted "Best window company" four years in a row in the S.D Union reader poll. Mike Chavez former president Best Windows

0

Don Bauder April 11, 2012 @ 8:06 p.m.

Chavez had made all these assertions to me in my interviews with him. I did not include them in the column. Best, Don Bauder

0

Visduh April 12, 2012 @ 8:52 a.m.

Chavez was the CEO of a large window contractor, yet he cannot punctuate or properly space a brief paragraph. But Chavez doesn't really deny the allegations about the double-dealing at UCAN. His purpose here is to deny that HE was guilty.

0

Don Bauder April 12, 2012 @ 11:55 a.m.

Chavez says that Shames threatened to expose the replacement window business -- particularly the kind of windows Best specialized in -- if UCAN did not get free windows. I decided not to write about that; I didn't have a paper trail, as I did on other matters. It would certainly have been a "he said, she said" tale. Even if it were true, it doesn't speak well for Chavez. Best, Don Bauder

0

Don Bauder April 14, 2012 @ 7:24 a.m.

The kind of rope that you smoke, or....? Best, Don Bauder

0

Twister April 13, 2012 @ 8:47 p.m.

Is it the bottom-line that we, the UCAN "contributors," paid for what was, in essence, a promotional scheme for a crooked company.

Do we have standing? Can the pockets of the perpetrators be tapped, or must we pay ourselves whatever damages are found to be actual? Are punitive damages out of the question? Will anybody go to jail for lying? Skimming?

Or does the non-profit status shield its principals, employees, and "major donors?"

PS: For those readers who find it difficult to find the Reader "Suggestion" Box, here is a link: http://www.sandiegoreader.com/weblogs...

0

Don Bauder April 14, 2012 @ 7:26 a.m.

It seems to me that the statute of limitations would have run out on this one. So don't expect redress in the courts. But I am not a lawyer and could be wrong. I do believe that law enforcement is looking more at nonprofits. Best, Don Bauder

0

realnews April 14, 2012 @ 1:08 p.m.

The only question I have is why this is considered news? San Diego has a long, happy history with scam non-profits, and profiteers. Also, when caught, and admitting guilt, their sentences are a joke. Such as Carolyn Smith

http://www.nbcsandiego.com/news/local/SEDC-Executives-Sentenced-Embezzlement-137787793.html

Yet news anchors continue to trill "San Diego is America's Finest City"

No wonder San Diego has earned it's national laughing stock reputation. San Diego voters have proven time and again, they support this. Quite a collection of dullards.

0

Don Bauder April 14, 2012 @ 2:40 p.m.

Yes, San Diego is a scam haven. But when people think of crooked cities in the U.S., they think of Chicago, Las Vegas, Miami, New Orleans, Newark, L.A., etc. San Diego doesn't get the credit (or blame) it deserves. Best, Don Bauder

0

hibob April 14, 2012 @ 4:18 p.m.

People think of Chicago as a crooked city rather than San Diego because the corruption here is so ... banal. There's no drama, just an oligopoly that keeps its dealings (and San Diego's funds) to itself. Growing up in the Chicago area I was used to reading about judges being convicted for fixing murder trials, bombs as part of the city election process, cars being legally stolen by the Lincoln Park Pirates ... as well as the high level and relatively genteel abuse of contracting we see in San Diego.

If San Diego is truly America's finest city, it really shouldn't settle for third rate corruption probes like Operation G-Sting. Can we get a Greylord or a Silver Shovel, please?

0

Don Bauder April 14, 2012 @ 8:41 p.m.

I grew up in Chicago suburbs in the 1930s and into the 1950s. Chicago had Al Capone and all manner of famous Prohibition gangsters. It has had a lot of mob murders, mayors connected to mobsters, restaurants being torched in the middle of the night, etc. San Diego's corruption is more convoluted (deliberately so)..the pirates wear pinstripes and don't carry machine guns, as they always did in Chicago.

0

Sign in to comment

Join our
newsletter list

Enter to win $25 at Broken Yolk Cafe

Each newsletter subscription
means another chance to win!

Close