Story highlights
- AbilityOne is under investigation after allegations of fraud
- Federal investigators are specifically looking at accusations of bid rigging, favoritism
- Officials at AbilityOne, SourceAmerica deny allegations of wrongdoing
(CNN)A federal grand jury is examining the nation's premier program that provides work for people who are severely disabled, after a series of CNN investigative reports
detailing allegations of corruption and cronyism in what sources say
could be the biggest fraud case ever in a U.S. government agency.
CNN
has learned government investigators have issued grand jury subpoenas
as they investigate the huge taxpayer-funded program, known as
AbilityOne, and specifically its managing agency, SourceAmerica.
Along
with bid rigging and corruption, grand jury investigators are looking
into allegations the program is operating numerous contracts illegally,
and not hiring enough disabled people to fill contracts as required by
law, as CNN detailed in earlier reports.
The
AbilityOne and SourceAmerica program dole out hundreds of
multimillion-dollar contracts to scores of organizations. To get a
contract, 75% of a company's work must be performed by the severely
disabled, people who cannot get work elsewhere.
Yet,
numerous sources have told CNN that SourceAmerica awards contracts
unfairly, giving lucrative deals to companies with inside connections.
Some SourceAmerica board members have also worked at companies that are
awarded big contracts.
One
such example is outlined in a lawsuit alleging bid-rigging, one of
several suits filed against AbilityOne and SourceAmerica in recent
years.
The suit was filed by Ruben
Lopez, owner of Bona Fide Conglomerates, a company that lost its
contract cleaning the federal courthouse in Las Vegas. He alleged the
contract was taken away and given to another company that had an
official sitting on the board of directors at SourceAmerica.
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Eventually,
Lopez settled the Las Vegas contract dispute with SourceAmerica. As
part of the settlement, SourceAmerica agreed to treat Lopez's company
more fairly, even appointing their top lawyer, Jean Robinson, to work
with him.
But Lopez said his company
was blackballed instead and received no more contracts. Lopez sued
SourceAmerica again, claiming it violated the settlement agreement, and
that claim is now ongoing in the courts.
Lopez
became so disgusted with how corrupt the process was that he began
working with federal investigators and secretly recorded conversations
between himself and Robinson.
What is AbilityOne?
The AbilityOne program
was first created with ambitious, altruistic goals by President
Franklin D. Roosevelt and Congress in 1938 to help give jobs to the
blind.
Those
recordings, which CNN obtained independently, are now part of the
federal investigation, having been requested under the grand jury
subpoena.
The recordings are
striking, among other reasons, because Robinson compared her company's
leadership to the leadership of the mafia.
"They're
like -- they're like the mafia, I mean, and they pride themselves in
it. They don't care," Robinson is heard saying in one part of the
recordings.
"You know, we are dealing with the mafia here, the old -- the old SourceAmerica mafia," she said in another recording.
Disabled work program investigated for fraud 07:25
On
the recordings, Robinson confides she is nervous about being set up by a
board of directors she claims has been fraudulently awarding contracts
for decades.
"People have been doing it
for so many years, and they're not going to stop," she said. "They're
just -- it's like an addiction. They're just, so much time has passed,
they've been getting away with it for, you know, for what, 25 years, and
they don't know how to do it different."
Officials
at SourceAmerica and AbilityOne repeatedly declined interviews with
CNN, issuing statements denying fraud, corruption, cronyism, bid
rigging, or illegal activity.
The
recordings of Robinson, SourceAmerica writes, are "factually inaccurate
and untrue." The statement notes that Lopez, head of what it calls a
"disgruntled" nonprofit, is suing SourceAmerica. The statement goes on
to say "SourceAmerica is continuing to vigorously defend itself against
these unfounded allegations."
CNN.
YEMI.
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