Zurik: What's a million-dollar contract between friends? Ask Sheriff Gusman

Published: Feb. 4, 2015 at 7:13 PM CST|Updated: Feb. 5, 2015 at 3:46 AM CST
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Bobby Major (Source: NOLA.com/The Times-Picayune)
Bobby Major (Source: NOLA.com/The Times-Picayune)

NEW ORLEANS (WVUE) - Scribbled notes on some government documents have legal and political experts questioning the legitimacy of a deal between Orleans Parish Sheriff Marlin Gusman and one of his long-time friends.

"There's got to be some kind of insider trading going on there," says UNO political scientist Ed Chervenak.

It's a deal that costs taxpayers $1 million every year.

"This is very distressing," says Tulane law professor Joel Friedman. "This is so frustrating on its face."

In 2009, Sheriff Gusman signed a long-term technology contract with a company called Major Services. The company operates out of a house in Mid City. And even though it handles IT services for the sheriff, Major Services doesn't even have its own website.

Every month, Major Services submits an invoice for payment, with little explanation of the work they've done. The invoice simply lists the number of hours each employee worked that month. It includes a timesheet but no detail of what each employee did to earn that money.

"No entity should be paying out $94,000 a month based on invoices that are merely conclusory," Friedman says. "That [invoice] says 'Joe Smith did 29 hours of work.' What work did he do? Well, we don't know. We have Joe Smith's timesheet that says – and I'm using a different name there – 'Well, I worked this many hours on this day…' But doing what? I mean, this is just not acceptable."

The invoices aren't even signed by the employee.

"And of course, what makes it worse - it's not the first time," Friedman says.

Joel Friedman is referring to another deal we uncovered nearly two years ago between Gusman and a law firm, Usry and Weeks. The sheriff paid the firm almost $1.6 million a year, with little to no proof of what work was being done. 

For that story, Gusman declined our request for an interview. But in a statement he wrote that this billing arrangement saved the sheriff's office at least 50 percent in potential legal fees. After our story aired, Gusman changed his tune and his course. He required Usry and Weeks to submit detailed invoices and cut the payments to the law firm in half, saving taxpayers money.

"I'm really shocked and disappointed that the sheriff's office hasn't learned from what it did with the lawyers," Friedman tells us.

So here's yet another lucrative contract with the sheriff's office that lacks details and explanation of payments.

"Why isn't the sheriff demanding more accountability from somebody he's paying a million dollars a year?" Friedman wonders.

We've found three employees who have left Major Services and have full-time jobs elsewhere - but their names still showed up on Major Services' invoices.

Robert Snelling lives in Birmingham and Robert George in Denver. Both say they still do work for Major Services but there's no clear documentation on the invoice of what they do or how their work, performed hundreds of miles away, is justified.

"Why are they doing this in the sheriff's office?" Friedman asks. "Why aren't they managing their money better? I mean, they're always complaining that they don't have enough money to do their job, and maybe they don't. But when you're giving an employee or a consultant money and you're not asking for any explanation of how they're doing what they're doing... that's just gross mismanagement and unacceptable from a public official."

The contract says Major Services must get "requests for services… approved" by the sheriff's office. We put in a public records request with the sheriff for one month's worth of requests. Three weeks later, they still haven't handed over any records.

But there's more. To solicit bids for the technology services contract, the sheriff put out a request for proposals, or an RFP. We got a copy of the draft version of that document from a source inside the sheriff's office.

It's filled with handwritten notes and crossed-out sections. In two places, the draft RFP listed the point of contact as Chief Deputy William Short. But his name was crossed out and replaced with purchasing manager John Sens. The final version of the RFP had Sens' name on it. That's the same John Sens who was sentenced in 2013 to five years in prison for a bid-rigging scheme.

In the draft, someone made a note: "Do we want to say anything about passing criminal background check?" That was crossed out.

The winner of the bid, Major Services, is owned by Bobby Major, who was the finance director under former New Orleans Mayor Dutch Morial in the 1980's. Major was convicted of two felonies, theft and unauthorized use of property, while he worked for the city. The final RFP did not include the part about criminal background checks.

It's important to note that Major actually received a pardon from former Governor Edwin Edwards.

The draft RFP also had nine different positions that the "proposer must submit." But three of those positions were scratched out and not included on the final RFP. The two other companies that submitted bids did not submit any of the crossed-out job titles - but Major Services' bid did.

"So I'm wondering, why is that?" Friedman asks. "And how is that? How did the Major company know to include items that are not in the original RFP unless, somehow, they saw a copy of the original draft RFP?"

Friedman and Chervenak both say these findings raise the question of whether Major had access to the draft RFP

"How is it that they knew about what was crossed out and these vendors did not?" Chervenak asks.

"It doesn't seem everybody else is in a fair position to compete with them," Friedman says, "if everybody else is responding to an RFP for 1-2-3-4, and the Major company is responding to a draft RFP for 1-2-3-4-5 and 6."

Both Major Services and Gusman declined our request for on-camera interviews. Major Services told us by email that they had no access to the draft RFP.

Gusman wrote, "The sheriff's office has no opinion on or recollection about a rough draft."

Major told us he's known Gusman for 35 years and considers him a "longtime friend." In fact, Gusman and Major Services were listed as joint sponsors of a fundraiser for the Dooky Chase Foundation in 2013.

Records show Gusman, John Sens and one other employee decided Major Services should be awarded the contract.

Three weeks before the sheriff helped make that decision, Bobby Major donated $2,500 to Gusman's campaign. Shortly after, Major's wife gave the campaign another $1,000. Since 2000, Bobby Major, his family and his companies have contributed $34,000 to Gusman's campaign.

The sheriff's office estimates it will pay Major Services more than $1 million this year. The project manager on the job bills a rate of about $182,000 a year. The lowest-ranking employees, help desk and PC technicians, bill $107,000 a year.

It's a lucrative contract that leaves our experts with many questions for a long-time politician and his long-time friend.

"It kind of strikes me as kind of a continuation of the Louisiana way," Chervenak says, "where you're awarded contracts based on your connections and based on who know. It's not about how well your company performs, what kind of services they can provide for a certain amount of money."

Major Services sent a lengthy response to a series of questions for our partners at the Times-Picayune/NOLA.com. You can review that statement at this link.

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