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By Brian Hews
In 2016/17, a Hews Media Group-Community News investigation found that the City of Montebello paid almost $500,000 from 2013 to 2016 to an obscure construction company, JCS Construction, using sole source no-bid contracts – while fabricating documents using sham companies with false names, addresses and suspended state contractors licenses – so JCS could win the lucrative jobs.
The investigation proved that JCS, and officials at the city of Montebello, violated many federal and state statutes including the City’s Municipal Code and the State’s Public Contracts Code.
Now a complaint, filed Feb. 24 of this year under seal and exclusively obtained by HMG-CN, has been lodged against JCS and its owner David Magallanes by the city of Montebello and the Los Angeles law firm of Spertus, Landes & Umhofer, LLP.
The City and Spertus’ complaint sites the HMG-CN investigation as its primary source of information, in some cases using exact words from the exposé.
Also implicated in the complaint is Montebello City Council members, City Manager Francesca Tucker-Schuyler, and an “employee of Montebello who had to know the bids, other than JCS’, were fabricated.”
Pictured (l-r) Mayor Vivian Romero, Mayor pro tem Bill Molinari, Councilmembers Art Barajas, Vanessa Delgado, and Jack Hadjinian, and City Manager Francesca Tucker-Schulyer.
The city of Montebello is suing Magallanes for damages, while Spertus is a Relator in a whistleblower lawsuit under California Government Code 12652.
JCS was awarded contracts amounting to $53,000 in 2013-14, $121,000 in 2014-15, and $320,000 in 2015-16.
During the bidding process, two other firms submitted bids, but the HMG-CN investigation found the bids to be fabricated; the firms either denied they ever worked for the City, or indicated they could not bid on a project.
Even more suspect the investigation found several of the contracts contained gross misspellings of rudimentary words and in some case repeated words on different contracts.
JCS’s bid document for EDD, note the many misspelled words. Click on image to view larger document.
California Public Contracts Code generally obligates cities to award contracts to the responsible lowest bidder following a competitive bidding process.
The Montebello City Code requires three competitive bids if the contact is under $50,000.
A contract over $50,000 requires public notice and approval of the City Council.
The contracts awarded to JCS did not go through the vetting process as mandated by the Public Contracts Code and the Montebello City Code.
The contracts were also not contained in the “Agreements” log maintained by the City Clerk’s office to track approval of City contracts.
City code mandates that any contract under $50,000 must be in the log along with the person who approved the contract, which is usually City Manager Tucker-Schulyer.
Any contract over $50,000 must also be in the log along with the date the contract was approved and the item number the contract was listed under from the City Council meeting agenda.
None of the JCS contracts appeared in the log.
The complaint goes on to state that former City Treasurer Charlie Pell saw the potential corruption and tried to stop paying JCS for any services; the City Attorney agreed with Pell also citing the lack of formal contracts.
Yet a majority of the City Council voted to pay JCS.
At the Nov. 2 City Council meeting, City Manager Tucker-Schulyer handed out a letter demanding payment from Magallanes.
The letter was not included with the “Council packet;” the packet given to councilmembers a few days before the meeting.
In the letter Magallanes requested an “unpaid amount” of over $31,000 because “he had to pay his employees.”
Yet Magallanes told the State License Board years earlier that JCS was exempt from carrying workmen’s compensation insurance because JCS “had no employees.”
Once again, despite lacking formal contracts, a majority of the City Council voted to pay JCS.
Finally, at the Nov. 30 City Council meeting, $21,780 was scheduled to be paid to JCS, but the public spoke on the JCS fiasco- after reading the exposé in HMG-CN- and demanded that JCS payments be stopped.
Seeing the public’s anger, this time the Council voted 4-0 to deny JCS the payment.
But somehow, according to the compliant, JCS received the $21,780 check the next day.
Deputy City Clerk Lillian Guzman, “emailed the Mayor, Councilmembers, Tucker-Schulyer, and Public Works Director Danilo Batson to inform them that the $21,780 check to JCS “has been paid” because the unapproved amount was simply a reissuance of two prior checks from the Nov. 2 City Council meeting.”
The check was purportedly issued prior to Guzman’s email to the Mayor and City Council with someone in the City calling the new check a “reissuance” of previously approved checks.
The complaint also asserted Tucker-Schulyer personally knows Magallanes and was instrumental in procuring jobs for JCS while covering up JCS’s substandard work.
Some of the work was performed at a Montebello fire station where a door was replaced that “did not lock and scraped the floor,” and the bathrooms JCS updated had “leaking ceiling tiles, no hot water, cracks in shower walls, and mold.”
Spertus apparently spoke to the firefighters who reported their frustrations and who said they did not want to work further with JCS.
Those same firefighters told the Spertus that when Tucker-Schulyer learned they were complaining, she “came down on them hard,” and told the firefighters to “keep their mouths shut if they want to see any improvements.”
The City is asking for all money to be returned by Magallanes with damages, while Spertus was filing for awards as a whistleblower under Code 12652.
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Twitter: @cerritosnews
