In a move to surprise many, the California Legislature's Committee on Accountability and Administrative Review got a bill through the Legislature in less than a month - not the usual two years - to begin measures to stop the scam.
Update Sept. 29, 2010: Governor Arnold Schwarzenegger signed the Bill!
It has taken 13 years to get someone to listen at the State Level other than the excellent California State Auditor's Offices, since I began reporting something didn't seem right and a Manager at UCSF told me that they were getting kickbacks as the reason why they weren't putting out competitive bid specs.......
A Budget crisis in California and legislators facing corruption in their cities finally brought about a new legislative committee that would look into such activities.
Many, many thanks have to go to Hector de la Torres' Committee on Accountability and Administrative Review and each of its' members, and his staff.
His staff listened, researched the issue very well - and used great wisdom in getting the bill through. They are a great asset along with the State Auditor to California.
And many, many thanks have to go to literally hundreds of folks in the roofing industry, media and investigators across California and the US who have helped over all these years and now.
And especially to the four manufacturers who have been stymied by the scam, who finally came forward for the first time to openly speak about what we are all dealing with, in a hearing that specifically did not name names.
To the brave souls in the roofing contracting business, roof consulting and independent roofing rep business in California: What you have done is to open the door to Californians to take back their state, and make it whole. Many, many congratulations!
Californians should thank you every one of you - and they particularly need - right now - for you to contact the Governor's Offices with your support, asking him to sign the bill that went to his desk Sept. 16, 2010 for signature - AB 635. And it needs to be done the week of Sept. 20, 2010.
Californians need the help of everyone across the US, concerned about the scam, to contact the California Governor's Offices and support this bill - and ask them to do more.
Please also urge the Governor to push for:
1) Requiring Government Officials, elected or employee/consultant status, to sign the same forms this bill requires, with the same penalties .
2) Revise existing Statutes back to their original language and to the long-known "best practices" in competitive bidding, whistleblowing and in procedures that allow effective State Auditing - all that will help dramatically with the overruns in the state budget. ____________________________________
For those who don't know, California's laws have been changed over the past 30 years, destroying accountability in many areas. No doubt it has created their massive deficit.
Please understand: This bill is a start, not the complete picture.
So you ask: Specifically - What else needs to be done?
First:
Because the scam revolves around paying off officials, who then force consultants to (illegally) sole-source ("or else" is implied), elected and appointed government officials, and employees and consultants acting as employees must also have to sign the same financial disclosure forms with the same penalties as manufacturers' reps and design professionals.
Other items that need to be addressed to stop the scams include process issues allowed by California Laws, such as:
- Public Contract Code (No. 3400) should state that a minimum of three products and the term "or equal" should be listed in competitive bidding specs. That is the law as it has been for decades in other states and federal contracting procedures. As it stands now, the California Public Contract Code states that "If" the designer "Happened to know of an equal.", they should list it. Part of the due diligence required of an architect or engineer is to determine what equals do exist, to list in specifications.
- The lack of one clear, written, comprehensive and openly published whistleblowing process for all governmental agencies, employees, consultants and with an impartial "jury" not at all involved in any way with that agency or persons in that agency.
- The lack of Futility Issues in Whistleblowing recognized by the Courts. The California Supreme Court ignored practicality and allow a State Agency they have deemed does not have to obey any laws able to "investigate" the claims of employees and contractors with respect to wrongdoing at the taxpayers' expense. It is, in fact, not possible -and was not in every whistleblowing case known of for the past at least 20 years at that Agency. How much has it cost the California taxpayers during the protracted case (since 1997)? Well over a billion dollars.
- The lack of the Courts recognizing stated intent of the Legislature as to whistleblowing (and other laws) in the Legislature's debate. Calfornia courts don't recognize Legislative intent even if only stated once and even if only at the beginnning of the legislative debate - as done in my case. Which helped in covering up the scam, and costing taxpayers hundreds of millions over the past 5 years.
- The lack of a "Safe Haven" (non-political) for whistleblowers to go to when attempting to help the state balance its' budget. The State Attorney General's Offices should never be contacted by a whistleblower, only the State Auditor's Offices should, as they do not disclose nor do they allow politics to enter the issue. Only after the State Auditor has done an audit should the State Attorney General be contacted - by the State Auditor's offices. But California Whistleblowing Laws have been changed recently to require whistleblowers to expose themselves to the very politicians with such conflicts of interest - the State Attorney General's Offices. In my case, the State Attorney General, contacted in 1997 and 2000-1, was in the Roofer's Union....and nothing happened other than gathering who talked to me and what they said.
- The ability to stop a public airing of a False Claims/Qui Tam issue in court. Right now, the State Attorney General can dismiss any False Claims Act case before it is unsealed - a new twist on a 500-year old, historical law. Given the nature of such cases, when one is brought, its' serious enough to move forward. No other Qui Tam Act has been known to be written to allow a person, not a court, to dismiss the case during the first 60-90 days while sealed - forever silencing high crimes and misdemeanors.
- The system of using internal "investigations" within organizations to make "findings". That procedure has cost California over a billion dollars over 13 years since my first reports, in this one scam alone - and needs to be thrown out. Fraught with Conflicts of Interest, it's one of the reasons Risk Managers at the University of California got away with what they did in my case - covering up for UC and forgetting the overall State's and taxpayer's interests.
- The State Auditor is not allowed to audit or investigate the Department of Education, 40% of California's Budget, nor are they allowed to investigate without permission Cal State and the University of California system. This should not be happening.
- Politicians control what the State Auditor can look into through "political consultants" at the Joint Legislative Audit Committee. It's like a City Council telling the cops what investigations and arrests they can make. This should not be happening.
- The University of California, the state agency claiming immunity from laws in their Administrative/Business Operations, is operating outside of its' Land Grant Charter and needs to be forced to operate under that Charter. Their Charter is the Organic Act of 1854, and that act requires that the governance of the University be such: That the Administrators are under the rule of the Academic Senate, which Academic Senate held the Academic Freedoms to study what was needed. The University of California pulled out in an "Office of the President" in the late 1960's on an opinion letter of a State Attorney General - who had no case law to back up the action. The Office of the President has since claimed and taken the freedoms of Academia with them into their Business Operations. Did you hear that? I hear Administrators in other states are now trying to mimic these "operations" - which have gotten Californians stuck with massive tabs wasted on Administrators hiding behind claims that are untrue - that they are not accountable. Do you want that where you are? If not, please help us demand an end to unaccountability, waste and fraud of the taxpayer dollar here, in this scam.
Yes, my case upturned a lot of operational issues that clearly describe why California is in the fix it is in -and won't get out of - till they correct all of the operational issues affected now by laws changed that have allowed the present-day budgetary nightmares California has.
And it is all coming or is already in at your town and state.
You will learn a lot about how to protect your state and cities from it, and how to stop it in your state if already launched into such acts - from listening and helping here.
You can read the final bill, what was done and needs to be done, below.
Your support is absolutely critical to getting not only this bill through, but more done.
Please help by calling and/or writing the Governor's Offices in California!
And thank you so much for doing so!!!
I know I'll be doing the same for you, when you decide to help your own states!
WHERE TO WRITE AND CALL: Please write the Governor's Offices and copy the Committee on Accountability and Administrative Review with your support letters. Here is the contact information you will need to do so:
CONTACT THE GOVERNOR Governor Arnold Schwarzenegger State Capitol Building Sacramento, CA 95814
Phone: 916-445-2841 Fax: 916-558-3160 email: http://gov.ca.gov/interact
CONTACT THE COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW Committee Phone: 916-319-3600 Committee Fax: 916-319-3650 WEBSITE: http://www.assembly.ca.gov/acs/newcomframeset.asp?committee=423 ____________________________________________
AB 635: A Recap
Here's what was done, to recap:
1.
A California Legislative Hearing on the issue was held June 30th, 2010.
Many persons helped behind the scenes from all walks in the roofing industry, in California and beyond and should be credited with exposing the scam.
You can see the hearing here:
https://www.calchannel.com/channel/viewVideo/1571
You can see who spoke here:
http://www.assembly.ca.gov/acs/committee/c423/Agenda63010.pdf
Testifying were:
a.
The Little Hoover Commission , a State Agency involved in exposing scams, previously contacted by this blogger but did not act (Carole D'Elia);
b.
The Legal Counsel for the State Auditor, Steven Russo, who read out their audit in my case. You can read that four-page synopsis here:
http://www.bsa.ca.gov/pdfs/reports/I2003-2.pdf and see Chapter 5. Their testimony about my case brought realization and anger - and the need for urgency to stop the scam - from Committee Members.
c.
Four roofing products manufacturers. They were:
1)
GAF Materials Corporation, from New Jersey (Helene Hardy Pierce, Vice President of Technical Services, Codes & Industry Relations);
2)
Firestone Business Products, from Indianapolis, Indiana (Carter Slusher, Senior Systems Engineer);
3)
Carlisle SynTec, Roofing Materials, from Carlisle, Pennsylvania (Mike Ducharme, Director of Product Marketing);
4)
Malarkey Roofing Products, out of Portland, Oregon (Greg Malarkey, Senior Vice President and New Product Development)
d.
Roofing contractors. They were, in order of appearance:
1)
Western States Roofing Systems, Gary Reeves, from Northridge, CA. (Los Angeles area)
2)
Waterproofing Experts, Inc., Steve Shipley from the Canoga Park, CA. (Los Angeles area)
e.
A roofing consultant from Skyline Engineering, Inc. who is a mechanical engineer and a former Tremco Rep, Bryan Schalesky, from the Peninsula just south of San Francisco.
f.
An independent roofing rep with Don Lambrecht& Associates, Inc. , Don Lambrecht, who also owns
http://www.roofing.com/ and is from the Sacramento, CA area.
2.
The Committee was so upset with what was going on and the costs to the state, that they demanded an Emergency Bill to stop the scams be enacted. They used a bill sitting on the shelf and amended it. You can see that here:
http://www.aroundthecapitol.com/billtrack/text.html?bvid=20090AB63596AMD
3. Subsequent hearings were held. Testifying against the bill was the President of Garland Roofing. We heard they had paid a lobbyist $250,000 to stop the bill.
4.
Voting against the Original Bill in Committees were 2 on the Senate Governmental Organization Committee:
a)
State Senator Leland Yee from the 12th District (San Francisco). He was formerly on the San Francisco School Board for eight years from 1988 t0 1996, part of the time as its' President, and had seen to it that everyone but the governmental officials and School Board Members had to sign financial disclosure statements when doing business with the SFUSD. The San Francisco Unified School District and Board is widely known for approving Garland Roofing Products for many years in their School roofing projects.
b)
State Senator Rod Wright from the 25th District (Los Angeles to Long Beach). He was indicted in an 8-count felony charge by a Grand Jury on Sept. 16, 2010, for allegedly misfiling statements regarding his residence location in order to run for office from the district.
5. With no votes against the bill, it cleared the other Committees, Senate Appropriations, Assembly Business and Professions, and Assembly Business, Professions and Consumer Protection.
6. With no votes against the bill, it cleared the California Assembly,
77-0.
7. With one vote against the bill, it cleared the California Senate,
33-1. The person voting against the bill was: State Senator Robert Dutton from Rancho Cucamonga, State Senate District 31, where he previously sat on the City Council in Ranco Cucamonga. His district includes parts of San Bernardino and Riverside Counties.
8.
A Bill was introduced at the State Legislature August 5, 2010 and passed by the full legislature on August 30, 2010 on an "urgency basis".
9. The Bill was sent to the Governor's Offices on Sept. 16, 2010, and awaits signing. Normal times for bills to go through the Legislature,? Two years. An old bill sitting on the shelf was "dusted off", revised and pulled through in less than a month. The History of the Bill is here:
http://www.aroundthecapitol.com/Bills/AB_635/ The enrolled Bill (final version) is here:
http://www.aroundthecapitol.com/billtrack/text.html?bvid=20090AB63595ENR
______________________________________________
Here's AB 635, enrolled (final) version, copied in below:
PASSED THE SENATE AUGUST 27, 2010 (33-1)
PASSED THE ASSEMBLY AUGUST 30, 2010 (77-0)
AMENDED IN SENATE AUGUST 20, 2010
AMENDED IN SENATE AUGUST 5, 2010
AMENDED IN ASSEMBLY APRIL 2, 2009
INTRODUCED BY Committee on Accountability and Administrative Review (De La Torre (Chair), Arambula, Block, Caballero, Bonnie Lowenthal, V. Manuel Perez, and Audra Strickland) FEBRUARY 25, 2009
[Note: An old bill from 2009 was taken and revised]
An act to add Article 1 (commencing with Section 3000) to Chapter 3 of Part 1 of Division 2 of the Public Contract Code, relating to public contracts, and declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST AB 635, Committee on Accountability and Administrative Review. Public contracts: roof projects.
Existing law prohibits a state agency, political subdivision, municipal corporation, or district from drafting specifications for bids, in connection with the construction, alteration, or repair of public works, calling for a designated material, product, thing, or service by specific brand or trade name unless the specification is followed by the words "or equal" so that bidders may furnish any equal material, product, thing, or service.
This bill would provide that, for a project for the repair or replacement of a roof of a public school or community college, a material, product, thing, or service shall be considered equal if it meets specified requirements. The bill would require an architect, engineer, roofing consultant, and other specified persons or entities to complete and sign a certification related to financial relationships in connection with such a roof project and provide the certification to the school district or community college district.
The bill would make related changes.
This bill would declare that it is to take effect immediately as an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 1 (commencing with Section 3000) is added to Chapter 3 of Part 1 of Division 2 of the Public Contract Code, to read:
Article 1.
Roofing Projects
3000. For purposes of this article, the following terms have the following meanings:
(a) "Architect" means an architect who has a current license issued by the state.
(b) "District" means a school district with an average daily attendance greater than 2,500 or a community college district.
(c) "Engineer" means an engineer who has a current license issued by the state.
(d) "Public facility" means a public school or community college.
(e) "Roofing consultant" means a consultant who is registered by RCI (formerly Roof Consultants Institute).
(f) "Roof project" means a project for the replacement or repair of a roof of a public facility, except that "roof project" does not include a project for the repair of 25 percent or less of the roof or a repair project that has a total cost of twenty-one thousand dollars ($21,000) or less.
(g) "Substitute" or "substitution" means a material, product, thing, or service proposed by a bidder to be an adequate substitute material, product, thing, or service that is equal to an item designated in specifications, pursuant to subdivision (b) of Section 3400 and subdivision (a) of Section 10129.
3002. (a) For purposes of subdivision (b) of Section 3400 and subdivision (a) of Section 10129, for any roof project, a material, product, thing, or service shall be considered equal if it meets all of the following requirements:
(1) The item is at least equal in quality, durability, design, and appearance but not necessarily of an identical color.
(2) The item will perform the intended function at least equally well.
(3) The item conforms substantially, even with deviations, to the detailed requirements contained in the specifications.
(b) A substitute may be unequal if the resulting roof system would be substantially different than other equal or better systems in terms of performance and durability, but not merely different by virtue of the inclusion of proprietary products or a proprietary warranty.
3004. Specifications for any roof project shall be designed to promote competition.
3006. (a) (1) An architect, engineer, or roofing consultant who provides professional services related to a roof project shall disclose any financial relationships by completing and signing the certification set forth in subdivision (b) prior to the time professional services are engaged. A materials manufacturer, contractor, or vendor involved in a bid or proposal for a roof project shall disclose any financial relationships by completing and signing the certification set forth in subdivision (b) when the award is made. The architect, engineer, roofing consultant, materials manufacturer, contractor, or vendor shall provide the certification to the district.
(2) An architect, engineer, roofing consultant, materials manufacturer, contractor, or vendor shall not disclose a financial relationship in which that person or entity is a stockholder of a corporation the stock of which is listed for sale to the general public on a national securities exchange and registered with the United States Securities and Exchange Commission, if the person or entity holds less than 10 percent of the outstanding stock entitled to vote at the annual meeting of the corporation.
(3) An architect, contractor, engineer, materials manufacturer, roofing consultant, or vendor who knowingly provides false information or fails to disclose a financial relationship pursuant to this section shall be liable to the district for any costs to the district that are reasonably attributable to excess or unnecessary costs, when compared to competing bids, incurred by the district as a result of the undisclosed financial relationship.
(b) I, ____ Name , ________________Name of Employer, certify that I have not offered, given, or agreed to give, received, accepted, or agreed to accept, any gift, contribution, or any financial incentive whatsoever to or from any person in connection with the roof project contract. As used in this certification, "person" means any natural person, business, partnership, corporation, union, committee, club, or other organization, entity, or group of individuals. Furthermore, I, ____ Name , ________________ Name of Employer , certify that I do not have, and throughout the duration of the contract, I will not have, any financial relationship in connection with the performance of this contract with any architect, engineer, roofing consultant, materials manufacturer, distributor, or vendor that is not disclosed below. I, ____ Name , ________________ Name of Employer , have the following financial relationships with an architect, engineer, roofing consultant, materials manufacturer, distributor, or vendor, or other person in connection with the following roof project contract: ______________________________________________________ Name and Address of Building, Contract Date and Number I certify that to the best of my knowledge, the contents of this disclosure are true, or are believed to be true. _________Signature ____ Date __________Print Name _______________________ Print Name of Employer
(c) Any person who knowingly provides false information or fails to disclose a financial relationship in the disclosure set forth in subdivision (b) shall be subject to a civil penalty in an amount up to one thousand dollars ($1,000), in addition to any other available remedies. An action for a civil penalty under this provision may be brought by any public prosecutor in the name of the people of the State of California.
3008. (a) To report bid rigging involving local government agencies and employees, including, but not limited to, county, city, and school district employees and officials, an interested person may contact the Antitrust Law Section of the Office of the Attorney General, 300 S. Spring St., Ste. 1702, Los Angeles, CA 90013, (800) 952-5225, or fill out the online complaint form on the Internet Web site of the Office of the Attorney General (Consumer Complaint Against a Business/Company) at ag.ca.gov/contact/complaint_form.php?cmplt=CL.
(b) To file a complaint regarding improper bidding involving state funding, an interested person may contact the Bureau of State Audits Whistleblower Hotline for any state agency or institution, at 800-952-5665, or by mail at 555 Capitol Mall, Suite 300, Sacramento, CA 95814.
3010. This article shall not apply to a school district operating in accordance with Section 20113 or a community college district operating in accordance with Section 20654.
SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to control expenditures for the repair or replacement of roofs on public schools and community colleges, it is necessary that this act take effect immediately.
__________________________________
NOTES:
1. A School District operating in accordance with Section 20113 is using the emergency clause. We should be vigilant and report any abuses.
Here is that section:
California Public Contract Code Section 20113 (a) In an emergency when any repairs, alterations, work, or improvement is necessary to any facility of public schools to permit the continuance of existing school classes, or to avoid danger to life or property, the board may, by unanimous vote, with the approval of the county superintendent of schools, do either of the following: (1) Make a contract in writing or otherwise on behalf of the district for the performance of labor and furnishing of materials or supplies for the purpose without advertising for or inviting bids. (2) Notwithstanding Section 20114, authorize the use of day labor or force account for the purpose. (b) Nothing in this section shall eliminate the need for any bonds or security otherwise required by law.
2. A Community College District operating in accordance with Section 20654 is using the emergency clause. We should be vigilant and report any abuses.
Here is that section:
California Code Section 20654 (a)In an emergency when any repairs, alterations, work, or improvement is necessary to any facility of the college, or to permit the continuance of existing college classes, or to avoid danger to life or property, the board may by unanimous vote, with the approval of the county superintendent of schools, do either of the following: (1)Make a contract in writing or otherwise on behalf of the district for the performance of labor and furnishing of materials or supplies for the purpose without advertising for or inviting bids. (2)Notwithstanding Section 20655, authorize the use of day labor or force account for the purpose. (b)Nothing in this section shall eliminate the need for any bonds or security otherwise required by law.
