Whistle blower alleges Oil Spill Foul Play

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1/24/12 – A subcontractor hired during last year’s oil spill cleanup has come forward and has blown the whistle on the

$ 1.8 million oil spill cleanup bill.

On November 8, 2011, the City council had unanimously authorized paying the highly controversial bill in full.

In a lawsuit filed on January 20, 2012 (view), Robert Cruz, d.b.a. Cruz Concrete, claims that cleanup contractor HCI billed the City for “hours not worked and services not rendered”, and that HCI marked up his invoice by as much as 287 %.

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SERIOUS ALLEGATIONS BY SUBCONTRACTOR :  287 % MARKUP, SOME SERVICES BILLED WERE NEVER RENDERED

The legal dispute arose because subcontractor Cruz claims he is still owed money by cleanup firm HCI. In his lawsuit, Cruz has submitted a copy of his invoice to HCI (view). The invoice shows that subcontractor Cruz billed HCI a total of $ 77,338.92 for 5 days of work. Cruz alleges that HCI then billed the City of Banning $ 222,985.04 for the exact same work – a markup of $ 287 % !

Furthermore Cruz says that the City of Banning was billed for “double time” and “overtime”, both of which he says never occurred. Cruz claims further that there was no other contractor on site that could have performed the type of work he did.  Furthermore, Cruz accuses HCI of fraud, unfair business practices and intentional infliction of emotional distress. HCI could not be reached for comment.

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HCI CLEANUP BILL ALSO QUESTIONED BY CONSULTANTS

In order to verify the accuracy of cleanup contractor HCI’s billing, the City of Banning had hired consulting firm Erler & Kalinowski (EKI). And sure enough, in their report (view) the consultants promptly questioned $ 1,278,000 of the $ 1.8 million cleanup bill.

The consultants labeled the vast majority of the bill “inconsistent” and requiring “backup documentation”. Their report even went as far as questioning whether the City was “billed twice” for the same services, ( see pg. 7 of report).

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CITY COUNCIL IGNORED DIRE WARNINGS OF CONSULTANTS

EKI’s report was made available to the City two weeks prior to the fateful November 8, 2011 City Council meeting, during which payment of the entire bill was approved. During this session, City manager Andy Takata publicly stated that the consultants deem the bill “accurate”, when in reality their report questions the vast majority of the bill.

A stone faced City council did not discuss the report nor did any council member ask any questions. It seemed that they could not get the matter approved fast enough – the entire proceedings lasted just 4 minutes. The vote was 5: 0  in favor – therewith ignoring any and all of the consultant’s concerns.

For those of you who have not had a chance to watch this truly bizarre council session, here it is once again :

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WHO BENEFITS ?

If the allegations of subcontractor Cruz are true, the taxpayer has been ripped off in the worst way. If this is true and HCI generally marked up subcontractor invoices by 287 %  – i.e. almost tripling them – then over $ 1 million of the 1.8 million bill could be considered pure profit ! Is it just a coincidence that consulting firm EKI – in their report – also questioned a similar amount ( $ 1,278,000 )  ?

Who profited from the oil spill cleanup ? Why did City manager Andy Takata push so hard to pay the bill in full – against the consultant’s recommendations ? Why did not a single council member discuss the bill and everyone seemed to rush to a vote ? Are they just stupid ? Can’t they read what the consultant’s report said ? – or does any of them have a financial interest here ?

Are we possibly dealing with “Bell-style” corruption on the part of City council and/or officials ?

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CONCLUSION

If true, the allegations of whistle blower Cruz could prove earth shattering ; will the oil spill cleanup story become a “Pandora’s Box” for the entire City council?

In the above video, City Manager Takata can be heard saying that he wants to ”get it over with” – referring to the oil spill bill . Sorry, Mr. Takata, but it does not look like this will happen anytime soon ….

Stay tuned  ! We predict that the Banning oil spill story is far from over – it may even make mainstream headlines in the months to come. And remember that you did NOT read about this in the Press Enterprise, the Record Gazette nor on patch.com. Once again, The Banning Informer remains the premier source of investigative reporting in the Pass area.

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