Feds investigating premier work program for disabled after CNN reports

Feds investigating premier work program for disabled
Feds investigating premier work program for disabled

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Feds investigating premier work program for disabled 07:06

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 a contract bid to clean the federal courthouse in Las Vegas. Another company owned by Lopez had already been cleaning the courthouse for years and had received glowing reviews. Lopez lost the bid, and the contract was 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
    Disabled work program investigated for fraud

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    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."