Canada Plagued by the Scam - and a Recommendation on How to Stop It

For those who think this scam is just going on in the United States, think again.

We have exported the so-called "civilized" form of corruption.

How was I tipped off to it going on in Canada?

To begin with, I was aware that Tremco was a Canadian company many years ago.  Then I heard of a California Tremco Rep that had taken the scam into Latin America.

Sure enough, you can google the companies involved and find their specs in various countries online.

Let's start with Canada, since they ae so close and so much alike the US (sorry about that to our good Canadian neighbors! We do share a very long border!)

Canada does something unique - they require specifications be posted online.  A good service to the taxpayer, in fact - and could help keep the scammers run out if used properly by those "in the know" and the press.

I hear there are a lot of good, real roofing consultants in Canada using these blogs to fight the scams there - good for them!  These blogs were designed to give the facts, and as much evidence as possible, to fight the scams anywhere.  They are most welcome to send us information to post or to follow up on.

Here's a recent spec to Garland in Canada, in an article in their press - over the controversy now heating up.

Briefly, in the Muskoka-Parry Sound area, a new building constructed in 2002-3 for about $3.8 million had to have a 6,600 square foot area of the roof repaired last year at $30,340.

The new roof "consultant", Garland Canada, has recommended total roof replacement at year 8 and their system, which they have assured the town lasts at least 30 years and is expected to last 45 years. 

Reports are that the roof is 28,000 square feet, or 280 squares.  And the total initial - not including those outrageously cost is $454,000, $16.21 per square foot or $1,621.42 per roofing square.

Just how many hundreds of feet in the air is this roof (not!)???

Wow, so this community is willing to put down "gold" roofs????  I sure hope they are getting gold for that price!

You can see the story here:
http://www.cottagecountrynow.ca/community/southmuskoka/article/1042197

Another good community has gotten taken once on a roof, and have now fallen for the masters of the conflict of interest con game - again.

Canada could show up the American system by doing the following:
1.  Publish a national standard which could be available to everybody for what ever roofing system someone wanted.


This could be easily done and it would eliminate the waste in one swoop

For example, the national standard could state that all high performance modified roofs must meet ASTM D6162 type 111 with and a base ply being ASTM D6163 type 111.

And you don't have, for instance, additional "tensile strengths" properties added to form a "Lock-Spec" - which are not part of the comprehensive, existing ASTM D6162 testing standard for SBS modified roofs.

The same goes for warranty standards.  For instance, the NRCA or RCI could publish a standard manufacturers' warranty.

Clarity prevents corruption - Keep it simple!

2.  The NRCA should publish performance standards based upon astm standards as well as consulting standards.  The problem could become that they would be restrictive and proprietary.

3.  RCI should refuse to allow RRO (Registered Roof Observers) designation of roof consultants if they work for a manufacturer

4.  Architects should also be required to possess an RRO or RCI (Roof Consultants' Institute) standing if they are going to spec a roof

Rule of Thumb: If there is a Conflict of Interest involved, look for the Scam

A Facilities Master Plan for the West Sonoma County Union High School District in Sebastopol, California, dated June 22, 2011, lists as its' "Roofing Consultant" the following:
     "The Garland Co., Inc., Novato, CA.
      Consultant:  Sean Mulligan"

The Roof Consultants' Institute (RCI) reads in their Code of Ethics, in part:

"Obligations to the Client
Members and registrants shall conduct themselves in a fashion which brings credit to themselves, their employers and their profession. In addition to upholding the behavioral standards described above, a member or registrant:

I. Shall preserve the confidence of his/her client or employer and serve each in a professional and competent manner.

II. Shall exercise unprejudiced and unbiased judgment and conduct when performing all professional services; 

III. Shall practice only in his/her area of competence;

IV. Shall decline any activity or employment, avoid any significant financial or other interest, and decline any contribution if it would reasonably appear that such activity, employment, interest, or contribution could compromise his or her professional judgment or conduct, or prevent him/her from serving the best interest of his/her client or employer, without making full disclosure to the client and obtaining the client's consent thereto;

V. Shall neither offer nor make any payment or gift to any public official, private client or industry representative with the intent of influencing that person's judgment or decision in connection with an existing or prospective project in which the member/registrant is interested;"

and

"The standards contained in this Code of Ethics are statements of ethical principles having broad applicability to members and registrants of RCI. However, the enumeration of particular duties and the proscription of certain conduct do not negate the existence of other obligations logically flowing from such principles. Conduct deemed unethical may be construed to include lesser offenses, such as aiding and abetting."

The link to the RCI's Code of Ethics is here:

http://www.rci-online.org/ethics.html 

So let's just compare what the Roof Consultants' Institute's standards are versus what is happening right now in the West Sonoma County Union High School District:

"
II. Shall exercise unprejudiced and unbiased judgment and conduct when performing all professional services;"
     The "Roof Consultant is an employee of one "manufacturing" company, and therefore cannot be unprejudiced or unbiased.
  
     Question:  Is Mr. Sean Mulligan a "Registered Roof Consultant (RRC)" or "Registered Roof Observer" by the RCI?

IV. Shall decline any activity or employment, avoid any significant financial or other interest, and decline any contribution if it would reasonably appear that such activity, employment, interest, or contribution could compromise his or her professional judgment or conduct, or prevent him/her from serving the best interest of his/her client or employer, without making full disclosure to the client and obtaining the client's consent thereto;

• Is the Client truly informed as to the fact that the "Roof Consultant" is not an independent professional?  
• Is the extent of the problems known with Garland internationally with the client?  
• Did they consent to being charged with huge prices for relabeled products, reinstalled way too soon ("Churned")?  
• Is the local Teacher's Union there aware that huge prices will be paid for services ongoing for years, not needed?  How do they feel about it?  
• How do the taxpayers feel about it?

V. Shall neither offer nor make any payment or gift to any public official, private client or industry representative with the intent of influencing that person's judgment or decision in connection with an existing or prospective project in which the member/registrant is interested"

      Well, the question is:  Are there any payments being made?  It's the elephant in the room....

We do know of this issue:
      According to Garland, they "indemnify" architects up to $50,000, the Errors and Omissions Insurance Policy deductible on many an architects' policy....is that not an "inducement" of and by itself alone?

Just why would an architect NOT use a real Roof Consultant, registered by the RCI?

All these questions are important, and the taxpayers there need to know before just signing off on what this architect is apparently "recommending".

Conflicts of Interest, pure and simple, allow scams to occur....and that is precisely what West Sonoma County Unified High School District has gotten itself into.

It is known that another architect has complained in writing to that Superintendent about such - and no answer was received.

See below the appropriate first two pages of that Facilities Master Plan, and specifically on page 2, for the listing of Garland and one specific Sales Rep, Sean Mulligan, as the "Roofing Consultant::

The FBI Criminal Investigations' Division goes after the CEO of an Engineering Firm in New Jersey - that does Tremco Specs......

Well, well, well....here we go again.....

A New Jersey Engineer involved in specifying Tremco roofing - heavily - is getting "probed" by the FBI Criminal Investigations' Division out of Newark - in an insurance probe.  It's not the first time in New Jersey that the roofing scams and insurance scams have been uncovered in the same probe...we just don't know yet if the FBI in Newark is on to the engineer being known for heavily specifying Tremco as well.....

Little wonder, given what I have seen in the San Francisco Bay Area, where, according to the former Hickman Roofing Regional Manager, "EVERY" Architect in the San Francisco Bay Area "was involved."

How exactly remains to be determined, but involved de facto or outright - they are.  Even the international firms.....

Let me explain a little, to give you some background, and then read what is happening in New Jersey. It will make sense to you then....

Trying to find work in San Francisco after reporting a manager at UCSF had said they were getting kickbacks for (illegally) sole-sourcing roofing products in bid specs is like prying open the jaws of death. 

San Francisco is a small town worse than anything I ever saw in Georgia, never did see it really....and it's like this statewide in California...so many people are involved......

In fact, "Everybody!" was involved according to a former Contracts Manager at UCSF and a former San Francisco School Board President...both laughing in my face as they said it -one who lied to FBI Agents in my case, the other laughing that she had said it to a Grand Jury looking into the millions of dollars stolen by her former head of Facilities at the San Francisco Unified School District.

The State of California and it's budget aren't laughing now. 

Neither are the credit ratings bureaus......

Too many people are stealing.....for power, money, and more votes for the same...a truly vicious cycle here in California.

Eventually, here in this teeny tiny town of San Francisco, I did find a job at one point - saving an architect from his staff's admittedly uncoordinated drawings and bid specs - on a 29-unit, 8 story affordable housing project half a block from the Federal Building in San Francisco (421 Turk Street).

So they hired me and I did save them and the building owner, Asian, Inc., the estimated $800,000 in change orders anticipated by the contractor on an $8 million job, and we did get the tax credits under a horrific schedule - one of only two out of 12 to make it that year.  The architect only had $56,000 in Errors and Omissions - on the roof!

All other change orders were due to staff at the San Francisco Mayor's Office of Disability - about $396,000 - because said Mayor's Office staff could not read plans (notorious for it) and approved them, then changed everything in the field.....

What was so interesting about this firm that needed my help - and a bit frightening later on when discovered - was that the woman who hired me (a "marketing" person, not an architect or engineer) not only knew that I had been in the San Francisco Weekly about what I caught onto, but my story. 

It turned out that she was caught stealing hundreds of thousands of dollars from the (mostly) absent architect....and right before that, I learned who she was. 

And learned who she was after she had insistently determined to get me on a boat to the Farallon Islands, which I refused to go on.....the Farallons are about 50 miles straight out from the Golden Gate Bridge.......

You see, this woman had done something that alerted me to who she was - she had refused to tell me who her husband worked for - until about a year later, about the time she was caught stealing, she accidentally forwarded an email from him....and I recognized the firm.

As it turned out, her husband was in charge of the Mechanical Engineering Firm that was caught by John Karamanos in similar scams to the one I caught onto at UCSF and in his case, also at UC Davis.  (University of California campuses).

John Karamanos owned a sheet metal firm, doing mechanical ductwork, including air control valves.  The Mechanical Engineering Firm run by the husband of the woman that hired me was up to their neck in the "bundling of mechanical equipment" contracts - all going to the same source - in UC jobs.  It included charges at ten times normal for Air Control Valves, leaking 30% instead of no leakage at ten times less the price - and placed in San Francisco Bay Area Hospitals.....

John Karamanos had caught gratuities involved to the Facilities personnel at UC Davis and UCSF.  To read the story, click on the link at the top of the column to the right - with the picture of the San Francisco Weekly cover, "The Fix Is In."

Similarly, now in New Jersey, an Engineering Firm is involved with heavily specifying Tremco, and is somehow involved with sole sourcing and a large insurance scam targeting taxpayer dollars.....and in New Jersey, it seems that the FBI might be catching them.

In the roofing scam, the payoffs work like this:  The Reps pay off City Council members, School Board Members, Business Managers, Facilities Managers and Maintenance Personnel....who then force architects to spec certain products.  In some cases, not all by a long shot!, the architects and engineers get paid off  - we hear in $10,000 payments here in the San Francisco Bay Area - to specify certain manufacturers.

But the roofing scam primarily works in targeting the budgetary decision makers, not the specifiers.  FYI....

In other product scams related to engineering, it appears that the Engineering Firms getting a lot of the work are being paid off to do so. 

And in other cases, separate from the scams, design professionals have had to make payoffs to public officials to get the work, as just reported in the Los Angeles Times last week, here:
http://www.latimes.com/news/local/la-me-community-college-cruz-20110703,0,3808085.story

A Long Beach Architect was found to have served time in Texas for paying off officials for work...but was allowed to help "...manage major construction programs at community colleges in Southern California".  In his case, apparently he paid off officials to get work, not paid off to illegally sole-source.  Interesting.....

But what that architect did is different from the scams and their payoff systems, and so must not be "mixed up" into one kettle of fish...if the investigative agencies are to clearly define and stop what is going on.

So the engineering connection with the scams by one well-used engineer in Toms River, New Jersey public work is what the FBI Criminal Investigations' Division may have just caught onto in New Jersey.

We have again in New Jersey the Insurance Scams tied into the products scams - targeting the taxpayer dollar.

In a Sept. 6, 2007 FBI roofing scam and insurance scam sting, the FBI caught 2 Mayors, 5 City Council Members and 4 School Board Members across the state (NJ) - all Democrats - taking payoffs, by starting with one lone school board member, who pointed to someone else to go pay off and that person did the same - all over the state.

Are you all getting the picture, here, folks?  Dirty politicians and bureaucrats all over, who know of each other, getting paid off......and all in one party in New Jersey. 

Now there is one engineering firm  in New Jersey suspected of some kind of similar issues - allegedly.

Wow!

This is getting extremely interesting, folks....could  these scams using one engineer or architect in various areas to facilitate them - everywhere across the US and Canada, possibly England now?

See the report from New Jersey, at:
http://www.app.com/article/20110714/NJNEWS/307140073/IRS-FBI-show-up-home-Toms-River-Regional-s-former-engineer?

And see reports from the Sept. 6, 2007 arrests in the Roofing & Insurance Scam , where Eleven Public Officials are caught taking bribes for roofing contracts in Public Works Contracts:

http://abclocal.go.com/wabc/story?section=nj&id=5640158

http://www.nysun.com/national/legislators-mayors-arrested-in-new-jersey-bribery/62077/

http://thecaucus.blogs.nytimes.com/2007/09/06/clinton-supporter-arrested-in-nj-corruption-sting/

Update:
For those in other Countries looking at this blog, specifically Canada and England, and any others: Please contact us to report kickbacks in your country.
The FBI and Justice Department in this country can go after the manufacturers involved, from here, with laws we have. It is very important that you do so.

Restrictive Proprietary Performance Specs : What They Are - and how the Scams are facilitated by them

Questions come up from time to time about Restrictive Proprietary Performance Specs - and what they are.

Even more questions come up about how such specs facilitate the scams.

Restrictive Proprietary Performance Specs are exactly what they say - specifications that may or may not say the name of the manufacturer being specified, to the exclusion of others, in the performance qualities specified.  They restrict the products being allowed to bid upon to one.

So for those who have questions and need clarification, here's the explanation in the Letter to the Editor from myself regarding how Restrictive Proprietary Performance Specs allow one manufacturer "in" as the only product to be bid upon.   It was printed in the Midwest Roofer Magazine, Spring of 2003 by the Midwest Roofing Contractor's Association (MRCA), and is reprinted below.

I heard the President of Tremco flew in to the MRCA headquarters in the midwest to complain.....but owners of huge roofing concerns were "so glad to know me!" 

Feel free to use the Letter with confused facilities managers and complicit architects & specifiers, liberally!
_____________________________________

Letter to the Editor

Response to Letter to the Editor from President of Tremco, printed in the Midwest Roofer, Summer, 2001

Midwest Roofer, March, 2003

Exclusionary Specifications Update


It is long past time that what some roofing industry insiders call “a billion-dollar taxpayer scam” be exposed.

I recognize that your publication, the Midwest Roofer, broke ground on the subject of “Exclusionary Specifications” back in 1997 with what resulted in a series of articles written by members and manufacturers that stated opinions on both sides of the issue. Thank you for dealing candidly with the issue, as other industry publications have not included several articles critical of the practices involved. I would like to update the industry regarding recent events on this subject.

As an architect, I was laid off at the University of California, San Francisco (UCSF) in response to my reporting to the FBI about long-term violations of the California Public Contract Code in restrictive proprietary roofing specifications.

The roofing specifications were provided by a local Tremco Field Representative to in-house UCSF architects, project managers, building managers and consulting architects, who incorporated them into their contract documents for bidding at the University of California, San Francisco over the past 20 years.

In the summer of 1997, the FBI found those same restrictive proprietary roofing specifications to clearly violate the California Public Contract Code. According to the FBI Agent involved in his deposition in my on-going case, when they brought it to the Federal District Attorney’s Offices here in San Francisco, they turned down prosecution and wouldn’t tell him why. This same FBI Agent again stated, under oath, that the specifications were in clear violation of the California Public Contract Code.

For one set of specifications alone, UCSF records show a payment of $25,000 made to the Tremco Field Representative for “Roof Consulting.” Further, the Tremco representative was paid for inspections of their roofs, also according to UCSF records.

These practices pose a question: Are Tremco representatives certified by the Roofing Consultant’s Institute (RCI) as Roof Consultants? If so, are they at the same time acting as a Tremco manufacturer's rep? It is our understanding that Tremco attempted to have a number of their representatives receive certification by flying them in for a seminar put on by the RCI. When the RCI was asked to give them designation as roof consultants for the seminar, the RCI declined. It was against RCI’s By-Laws - Article 16, Section 1: "Conflict of Interest," to have a manufacturer’s representative be certified as an independent roofing consultant.

Documents pertinent to this point and many more that raise other concerns have been produced during depositions. One of those documents includes a Tremco in-house training document that headlines, on page six of the document, “CONTROLLING THE SCHOOL AND PUBLIC WORK”.

This methodology was described in-depth in a Midwest Roofer article written by L.B. Morris titled “Tremco: Strategies and Methods” in 1997.

Here is a brief summary of instructions provided in those documents, and how they were applied at UCSF:

Control the setting of budgets one year or more prior to the bidding process.

At UCSF, Tremco representatives produced a TRIM report, according to one of their former Inspectors, recommending new roofs where the Inspector said that new roofs were not needed.

Convince the maintenance and School District personnel that they should purchase a maintenance agreement from the manufacturer, without addressing warranty issues.

Aren’t roofing contractors alone the best parties to provide the maintenance service, not through manufacturers? And how can other major manufacturers give 20 or 30 year roofing warranties, without requiring an expensive maintenance agreement?

Have pre-bid mandatory meetings at which those who wish to bid must attend in person.

At UCSF, several repeat roofing contractors showed up along with the Tremco representative. In other cases in the south San Francisco Bay Area, dates for the meetings were not advertised until after the date of the meeting, or until it was too late to participate in the process as required by law.

The representative controls the specifications, delivers the bid submission documents package to each of their "approved" contractors, and who gets what pricing. This according to former personnel at the largest roofing contractor in the US, now out of business - also formerly an approved Tremco applicator.

All of which occurred when I was working at UCSF.

I am sure almost every roofing contractor, roofing products supplier, roofing manufacturer, roofing consultant, and errors and omissions insurance carrier is aware of these practices. However, most importantly, the customers - architects, purchasing agents and school district board members - are not aware of these carefully planned and executed "CONTROLLING THE SCHOOL AND PUBLIC WORK" practices.

Industry professionals who have compared estimates when these practices occurred on UCSF and other jobs over the past 13 years demonstrate a large disparity in pricing. Further, the restrictive tests required in the UCSF-Tremco restrictive proprietary roofing specs were either:

     Out of date, according to the testing agencies, when newer
     specifications should have been cited and met;

     Nonexistent, in some cases, according to the testing agencies; or

     Numbers were picked out of range when the
     range was the applicable and only data that should have   
     been used, according to the testing agencies.

Through legal research, we know of at least two cases when Tremco restrictive proprietary roofing specifications were brought up in criminal proceedings.

Had it gone to trial, one case may well have proved that the product being produced here in California was not consistent with test data and in conflict with the certifications being produced at that time in UCSF specifications. That case resulted in an out-of-court settlement of a slander suit against Tremco for their accusations against a contractor. Apparently, a Tremco-approved applicator decided to bid another and equal product as allowed by law. Tremco then accused this roofing contractor of diluting their product and applying it to buildings belonging to the government. In order to win that suit, the applicator had to be prepared to go to court to prove that they had not done so. One of the ways to prove they had not done so was to prove that as an applicator, they simply had no knowledge or way of diluting the product. In order to mix anything into the product, a high-speed mixer is required. The only known way of successfully diluting the product would have been at the manufacturer’s plant, as such equipment was not nor is known to have been owned by any applicator.

The other case involved a School Administrator who was accused of allowing a substitution for a Tremco product by using a test that was not equal to the one that Tremco had supplied in the specification. The School Administrator was able to produce an in-house Tremco document that described how the two tests were equal.

We have also seen numerous cases of former Tremco representatives being sued for non-compete and other issues arising from continued employment in the roofing industry.

Serious questions arise from such practices and cases:

     How can we rely on a manufacturer who engages in these
     activities to certify that they have no problems with their
     own materials?

     How can we rely on a manufacturer to be a roofing consultant?

     How can we rely on a manufacturer to inspect its own roofs?

     How can we rely on a manufacturer that does not go out on
     the open market with its pricing?

     How can we have a fair bidding process for a good product
     at a reasonable price on public buildings, when one manufacturer
     infiltrates and manipulates the process to exclude competition
     for public bids?


The final question is one of professional ethics, private conscience and public interest. How can we as taxpayers sit idly by when the same manufacturer, who fixed the process so only its high-priced product can meet the specification, also arranges for the application of a product that is not even in compliance with its own specification?

These conflicts of interest result in a deliberate undermining of the educational system, the taxpayer dollar, and public health.

Architects are licensed to protect the health, safety and welfare of the general public. It was my professional duty to advise the proper authorities when I observed these practices. UCSF officials kept turning a blind eye when others and I protested similar practices, over a long period of time.

Not one person at the University of California, San Francisco (UCSF) has been known to stop these practices. If you have read Steve Bennish's article in the Dayton Daily News, reprinted in 2002 in the Midwest Roofer, he reported what one of UC's employees, Chris Patti, told him. He said that they "let Tremco write specifications for them."

It is true. Ongoing UCSF projects, some of them quite large in San Francisco and in other cities, include restrictive proprietary roofing specifications written by UCSF's favorite roofing manufacturer - and inserted by the design firms into project specifications documents.

When I looked into local professional organizations for help, I found that their "roofing and waterproofing experts" were not only defensive of these practices; some of them also attempted to involve others, including protesting, unwilling governmental clients, into using restrictive proprietary specs in roofing.

Proprietary specifications may be acceptable in some situations, but ones that are written to exclude legitimate competition on public bids are not. As states across the country struggle with massive budget deficits, and are making large cuts in educational services, it is our common duty as taxpayers to expose and end waste of taxpayer dollars.

If you are involved in similar practices, it would be advisable to permanently distance yourself from them as quickly as possible. In order to stop this massive and very costly scam, it is going to take concerted action on the part of everyone affected or previously involved.

We all need to speak out, and where it counts.

Janet C. Campbell, is an Architect in San Francisco, California, and an Associate Member of the MRCA. Any and all opinions expressed in the Midwest Roofer are those of the author(s), and not necessarily those of MRCA by fact of publication.