10:55 p.m., Aug. 31
Grand Jury transcripts--are there hidden costs to bond construction?
A window into proposition construction expenses for Sweetwater Union High School and Southwestern College
The grand jury's investigation into corruption in the South Bay resulted in 15 indictments of school district administrators, trustees and contractors. Some attorneys argue that the grand jury inquiry is one-sided as clients are not allowed to have counsel present. Some go so far as to say that a grand jury could indict a ham sandwich. Those indicted by the grand jury have all pleaded "not guilty."
Whatever the outcome of the trial set for February 2014, the district attorney's office has accumulated a breadth of material which offers the public a window into the hustle for money, power, and district bond contracts. The saga continues:
Henry Amigable was a program manager. He worked for Gilbane Construction at Sweetwater Union High School overseeing the $644 million Proposition O construction. Then he went to work for Southwestern College supervising the $389 million Proposition R construction. When he worked at Southwestern College, he was employed by Seville Construction Services (SCS). Jeffrey Flores (pictured leaving the South County courthouse) was the president of SCS.
In the following transcript excerpt, deputy district attorney Leon Schorr shows Amigable an email from Jeff Flores and questions him about it.
Schorr: "Look at 3171 and this is--the bottom appears to be the same email from yourself and then the response from Mr. Flores. It indicates [Amigable] 'Understand.'"
Email content from Flores: "You might want to keep your receipts throughout the month so you can keep track. As soon as we get six people on the job, I will consider bumping up the amount. Also, Baci's is very expensive. You might want to consider going to other places for dinner so you don't max out so quickly."
Schorr: "How does the number of people on the job affect the amount of money that SCS is making on the job?"
Amigable: "Well, the rule of thumb, if you get a program, everybody that you get on the job--depending on the level--equates, usually, typically, average, anywhere between $80,000 to $100,000 of net profit to the company.
So, he's wanting me to--he's trying to force me in a position where I try to put more bodies on the project so that, you know, I can uptick my expense report or whatever he's [Flores] considering. I took offense to this email. You don't want a long explanation...But I never did my projects based on, you know, company profits. I did them as efficiently as possible. he wanted me to bump them up and make more profit for the company..."
Amigable has pleaded guilty to a misdemeanor. Flores has pleaded "not guilty."
In May 2011, Nickolas Furr wrote an investigative piece for the Southwestern Sun on the college's proposition R problems. In the article he investigates the practice used by some construction firms called "body shopping."
Here is an excerpt from Furr's investigation:
"In March 2011 the Los Angeles Times began a six-part series on a construction scandal at the Los Angeles Community College district, the cost overruns the district suffered and construction mismanagement issues. On March 3, the Times focused on how contractors had swindled the district and taxpayers out of about $22 million. According to that story, 'about a dozen different firms' were engaged in the creation of "body shops," in which the district would hire consultants and employees and them in different firms. These contractors would function as employers of record and invoice the district for the employee's pay, but would add markups for overhead and to make a profit on each. This had the effect of doubling or tripling the cost of an employee to the district taxpayers, and the contractors or sub contractors would pocket the extra money...."
According to Furr, one contractor was Seville.
More like this:
- South Bay judge upholds majority of indictments in pay-to-play — Oct. 10, 2013
- Past and present officials from three South Bay school districts arraigned — April 12, 2013
- First sentencing in South Bay corruption scandal — March 1, 2013
- Southwestern College Seeks Redress from Contractors — April 12, 2012
- Sweetwater Contractor Plea Bargains in Corruption Case — March 21, 2012