August 17, 2008

Whistle-Blowers Say California State U. Fired Them for Questioning No-Bid Contracts

Three senior employees at California State University say they lost their jobs after questioning whether the system’s chancellor, Charles B. Reed, misused public funds when he hired a labor-consulting firm without soliciting competitive bids, the San Francisco Chronicle reported.

Two lawyers who worked in California State’s labor-relations office — Paul Verellen and Joel Block — said their firings were directly related to their questions over the hiring of C. Richard Barnes and Associates, a Georgia-based firm, to represent the university in negotiations with labor unions and in arbitration with faculty members.

Mr. Verellen has filed a whistle-blower complaint with California’s Bureau of State Audits and said he plans to file a lawsuit against Mr. Reed and the university. A third dismissed employee has signed a legal settlement that prevents him from discussing the case, but others told the newspaper he too had lost his job after asking questions about the Barnes contracts.

The Barnes firm, which is led by C. Richard Barnes, a former director of the Federal Mediation and Conciliation Service, has received more than $2-million so far, the newspaper reported. The university says the no-bid contracts were necessary and legitimate.

Mr. Reed said that the former employees were let go in a staff reorganization, and that the Barnes contracts had been some of the office’s “best-spent resources.” The San Francisco Chronicle quoted him as saying: “I frankly got tired of all the labor-relations problems that we were having. I asked somebody who the very best labor person was in the country, and it turned out to be a guy in Atlanta who had worked in the Clinton administration. … And I asked him if he would help us with our labor problems.” —Kathryn Masterson

Comments

1. I don’t see a smoking gun here. It’s easy to make accusations. I don’t see evidence of wrong doing here. But I’ll keep tuned.

   — Gustavo A. Mellander    Aug 18, 06:09 AM    #

2. There must be some sort of “smoking gun” if the university system has “settled” with one employee whistle-blower this early in the game.

   And since the two remaining plaintiffs are lawyers, they know that the whistle-blower laws are their surest refuge. Since the Supreme Court’s Ceballos decision, they wouldn’t have a prayer in the Federal courts: state employers are almighty and invulnerable whenever they can cite possible disruption or the need for economy of services — even in discrimination cases.

   — Anti-hypocrisy advocate    Aug 18, 09:58 AM    #

3. I’m not certain about California law, but in most states, unique professional services are exempt from the bidding requirements. On the other hand, lawyers should have known of that exemption, so what is really going on here?

   — Bill    Aug 18, 09:39 PM    #

4. These services are not unique and if it went out to bid, Ca. State would have had many quality proposals from very well-qualified firms. I suspect the many labor problems start at the top and represent poor administrative practices. This is smoke—maybe some entity will uncover the fire. Something is clearly wrong.
   When I was an administrator, I wanted to hear everyone’s opinion. I was furious with employees who occasionally did not voice their thoughts and then something I had not thought of happened. I hated surprises! Especially the bad ones. I sure as heck didn’t know everything.
   This is such a big dollar amount, something is fishy. Any adminstrator knows that the bigger the contract, the greater the importance of transparency and ‘the rules’ (which may very well be state law) in selecting the best service provider or vendor.

   — kathleen    Aug 19, 05:05 PM    #

5. Pretty vague rationalization. “I asked somebody who the best guy was..” This is a Chancellor spending $2.5million. Chances are the people working under him have a higher degree of accountability. Why not him. It’s easy to see why the Chancellor is much happier now: the turnaround is because people stopped asking questions after these 3 were let go. If a decision can’t stand up to scrutiny, perhaps it wasn’t too strong to begin with. Look deeper!! They’ve acknowledged rule violations and settling out of court (paying someone off). Sounds innocent enough, right? Follow the money.

   — Doug    Aug 19, 09:25 PM    #

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