When a politically connected company was in danger of losing a $9.4 million no-bid contract with the state, Senate President Mike Haridopolos came to the rescue of the outfit — a firm that employs his good friend and political benefactor as a lobbyist.
Haridopolos staved off the threat to the deal with the Department of Juvenile Justice and quietly steered $6 million in additional dollars to the company, despite the vigorous objections of agency leaders and top Republican senators.
The move allowed Evidence Based Associates, a Washington-based probation program, the exclusive contract to handle the state effort to divert at-risk youth from costly prison beds into community programs. The company kept the business despite recent reports that it had failed to comply with key terms of the agreement —– and to the chagrin of a long list of providers who wanted to compete for the work.
The company’s lobbyist, Frank Tsamoutales, is a Brevard County Republican who has been a financial backer of Haridopolos since the Brevard County legislator was first elected to office in 2000. He went to work for EBA in April 2011, earning between $20,000 and $29,000 in the first year, the same year Haridopolos became Senate president.
The investment paid off. Print version here.
Wen a legislative conference committee decided it was time to lower the cost of the project, lawmakers wrote language into the budget ordering DJJ to rebid the contract after eight years with EBA. That’s when Tsamoutales spoke to Haridopolos.
The final budget signed by Haridopolos and House Speaker Dean Cannon deleted the requirement that the contract be put to bid.
Haridopolos referred questions about the matter to his spokeswoman, Lyndsey Cruley, who said a health services exemption allows DJJ to forgo competitive bidding of the contract, and that EBA earned the work with a “proven track record of positive results.”
Cruley said no one in the Senate exercised improper influence over the contract dollars.
“The Senate in no way steered that contract toward EBA,” Cruley said. It was juvenile justice administrators, she added, who chose not to exercise their authority to seek competitive bids.
But lawmakers who opposed the contract consider it a gift from one of the state’s most powerful legislators to one of his closest friends.But lawmakers who opposed the contract consider it a gift from one of the state’s most powerful legislators to one of his closest friends.
"He is as close to President Mike Haridopolos as any lobbyist could be," said Sen. Mike Fasano, R-New Port Richey, referring to Tsamoutales. Fasano’s outspoken opposition to Hardiopolos’ agenda cost him his chairmanship of the powerful Senate Criminal Justice Appropriations Committee, which controls the budgets of several agencies. He now believes his opposition to Tsamoutales’ no-bid contract contributed to the Senate president’s animosity towards him.
Haridopolos and Tsamoutales have a history of helping each other out. One of Tsamoutales’ clients and closest friends last year paid Haridopolos $5,000 a month — $60,000 a year — to be a consultant.
Haridopolos earmarked $20 million in state money for a biomedical development sought by another Tsamoutales client. And just days after Tsamoutales registered as an agent for Lennar Homes, Haridopolos bought a home from the company in Mount Dora as investment property.
Tsamoutales makes no apologies for appealing to his long-time friend to stop what his fellow lawmakers had done. “That was our job,’’ he said.
But Haridopolos had given his client more than a chance to hang onto a contract one more year. He encouraged Senate budget leaders to steer another $10 million to the program represented by Tsamoutales. Although legislators whittled it down to $6 million, the money would be used to expand the delinquency as recognition of a job well done, Tsamoutales said: “Performance counts.”
The probation contract had belonged to EBA long before Haridopolis rose to power. Indeed, since EBA was first awarded the no-bid contract in 2004, DJJ renewed it twice without having to go through a competitive bidding process using an exception to the state’s contracting rules that pertains to “health services.”
EBA oversees the probation effort, but all the direct care and supervision is subcontracted to other groups, records show. It also knows how to play the lobbying game.
Before it hired Tsamoutales in 2011, it’s go to lobbyist in the legislature was Esther Nuhfer, a close friend of then-House budget chief and now U.S. Rep. David Rivera, R-Miami.
The results of the Redirections program have been laudable. State auditors at the Office of Program Policy Analysis hailed the diversion program as so successful at keeping at-risk kids out of expensive residential detention facilities that it concluded that the contract saved the state $51.2 million between 2004 and 2010. But in the last year, Fasano and others began raising questions.
In an Aug. 17 letter to the Department of Juvenile Justice, Fasano said he was surprised to learn the contract had never faced a competitive bid and, despite the program’s success rate, he urged the department to hold the contract “to a higher level of scrutiny.”
He ordered that it be “either immediately cancelled and properly rebid to ensure the public’s trust” or handled in-house.
DJJ Secretary Wansley Walters agreed and, in a Sept. 16 letter to Fasano, said “upon closer examination, we have determined that the use of this exemption from competitive procurement may not be in the best interest of the state.”
“The goal,” she added, “would be to reinvest more of the overall contract amount into serving the treatment needs of the youth in our care.”
EBA’s own reports show that more than 30 percent of taxpayer money goes to administering the contract. An EBA report to the Justice Research Center said that while 69.5 percent of its contract goes toward “provision of services,” the remaining portion pays for project management, quality assurance, training, travel and administration.
Unlike most of DJJ’s contracts with private providers, EBA’s agreement with the state allows the company to evaluate its own performance. DJJ does routine contract monitoring, though, and the agency’s most recent review of the Redirections contract showed that some of the company’s subcontractors have fallen short of key provisions that two-thirds of the program’s clients remain out of jail, and that no more than 40 percent of its graduates commit new crimes.
Some of the Redirections efforts served far fewer youth than the contract called for, as well.
Walters followed through on her assurances to Fasano, and sought interested bidders. By January, the agency had heard from 11 other companies that indicated they could reduce the amount spent on overhead.
Legislative budget leaders inserted a requirement that the agency bid out the entire contract — the $9.4 million original contract, which was set to expire in the fall of 2013, and the additional $6 million. When the first draft of the budget omitted a requirement that the $9.4 million contract be put up for bid, Sen. Ronda Storms objected.
“If it hasn’t been rebid since 2004, you can’t convince me there’s not a better deal out there unless I see it for myself,’’ said Storms, R-Valrico, during a Feb. 8 meeting of the Senate Criminal Justice Appropriations Committee. “Turn the light on. Pull the curtain back and make sure every taxpayer gets the benefit.”
DJJ’s chief of staff, Christy Daly, vowed that the contract would be put up for bid. “We agree with you,’’ she told the committee. “We feel there could be a cost savings there by eliminating that overhead.”
In addition to Storms, Sen. Mike Bennett, a Bradenton Republican and a key Senate leader, also recommended the contract face competition and urged the agency to consider cutting out the middleman. “Look at individual contractors,’’ he said. “Because sometimes the aggregate is not better.”
Agency officials don’t need legislative approval to order a contract to be rebid, but since DJJ sent out its request for bids, it has halted all attempts at opening up the $9.4 million contract.
The recent questions raised about EBA’s performance have also increased doubts within the agency about whether the company can also handle the additional $6 million.
DJJ plans to seek bids for that program but, to stave off more legislative intervention, Walters has formally asked the governor’s office for advice.
In a letter this week to the governor’s budget director, Jerry McDaniels, she said, “DJJ has determined that there is no authority in the existing contract to expand services” and “seeks to determine the legislative intent regarding procurement of these additional services.”
Walters declined to discuss the controversial contract with the Herald/Times Tuesday but said in a statement she remains committed to “competitive procurement of services to treat troubled youth in the agency’s care.’’
Tsamoutales said Tuesday there was “no intention on the Legislature’s part” to put the contract out for a bid and “the governor’s office went along” because “the program has saved taxpayers millions over the course of this contract.” He said the Legislature’s reason for adding the extra $6 million was “expanding the contract would expand the savings.”
Storms, who announced this spring that she will not seek re-election to the Senate, called the situation “just nauseating.”
“We are giving money to people who are not producing the right [results],’’ Storms told the Herald/Times, “and we are pouring in millions of dollars.”