Some State Workers Have a Hard Time Getting Paid By a Contractor That Pays Politicians
From last summer until the end of February, Bertina Baker and about 45 other people working for the state of Maryland got their paychecks late, got paychecks that bounced, and got strange excuses.
“There was a situation where [my paycheck was] never deposited, and they never informed you ahead of time that they weren’t direct-depositing,” says Baker, who has worked for a state contractor called Automated Business Systems and Services Inc. (ABSS) since December of 2004. Baker says she was charged bank fees for bounced checks, and on several occasions she got no check at all on pay day—or received a cashier’s check that she could not cash because her bank did not recognize the issuing bank. The late payments to her account caused Baker to bounce a few checks too, she says, including one to pay her electric bill. “I’m trying not to be late on my bills,” she says, “because it doesn’t look good to be late on your bills when you’re trying to buy a house.”
Ironically, Baker’s job is making sure other people get their checks on time. Baker and 14 other employees working for the Maryland Department of Human Resources’ Child Support Division see that child-support checks for the right amount reach the right people when they’re due. They work from an office at 6000 Metro Drive in Northwest Baltimore. Meanwhile, at the EZ Pass Service Center at 1800 Washington Blvd. in the city’s southwest, another 30 or so workers processing payments and sending out transponders for the state’s EZ Pass electronic-toll system had the same trouble getting paid as Baker and her colleagues did, several told City Paper.
But, technically, none of these state workers are state workers. They worked for minority-owned contractor ABSS.
And ABSS, in this case, was acting as a subcontractor for another contractor, Affiliated Computer Services Inc. (ACS), a Fortune 500 company that was formerly part of Lockheed Martin, the world’s largest government contractor. ACS has had the state’s EZ Pass contract since the advent of that system in 2002, and the company won a five-year, $16.9 million contract to run the state’s child-support disbursement unit in December 2005. Bertina Baker and her co-workers didn’t know all the details. They knew only that, month after month, on the 7th and the 22nd, when their bills were coming due, their paychecks weren’t getting to them.
”I’m thinking, you know, because it’s the state, and a project as big as EZ Pass, it would at least be a reputable company,” says one worker, who asked that his name not be published.
ABSS, a 34-year-old company, donated $19,000 to install air conditioners in a Prince George’s County elementary school in 2001, and its founder has been hailed as a philanthropist.
But spokespeople at the state departments of Transportation and Human Resources, which oversee the contracts, at first said they had no idea that ABSS worked for them, and then said the state had no responsibility to ensure that these workers got paid on time—or at all.
“If there is a problem with someone not being paid, that’s not something we have any responsibility for,” Department of Human Resources spokesman Norris West says. “We monitor for how well they pay their customers [children receiving support]—not for how well they pay their employees. And even worse, not how they pay their subcontractors.”
The ABSS workers described a series of bizarre dramas involving their pay, including an instance last September in which the reputed company president came to the office to distribute cash stuffed in envelopes. The situation came to a head after EZ Pass workers reportedly stopped taking phone calls on Feb. 23 to protest their pay situation.
Kara Ross, a spokeswoman for ACS, says her company terminated ABSS on Feb. 24 “because of continuing difficulties or disruptions with payroll and benefits for their employees.” With 55,000 employees and a $5 billion market capitalization, ACS hired ABSS to fulfill “certain MBE [minority business enterprise] requirements we have in the contract,” Ross says.
ABSS founder and CEO Theodore C. Howard confirms his company’s termination. “We had some financial problems,” he says. “And it got canceled for the convenience of the prime. We don’t agree with that, ’cause since then we got new financing in place.”
Howard says his former workers received all of their back pay, adding that the subcontract was a money loser for ABSS.
“I really don’t have any heartburns about these kinds of contracts,” Howard says. “They’re low margins, and a lot of headaches.” He explains that ABSS offers more fringe benefits than the norm for the lower-skilled workers in this contract. “We bid on that as if it was a high-tech contract,” he says. “We paying people $11 an hour, and they reimbursing me for $14. Then we paying fringe benefits, health, dental, three weeks vacation, two weeks sick pay.”
The workers say they are still owed for vacation time accrued while working for ABSS. But their pay and benefits have remained the same under their new employer, Level One Personnel Inc., a new contractor hired by ACS.
ABSS, based in Washington, D.C., and Lanham, has about 200 employees, according to Howard. It also has a history of paying its bills late and struggling to perform on contracts. In 1995, for example, The Washington Times newspaper reported on a $300,000 batch of school computer contracts in Prince George’s County that ABSS had won. The company bid $99,000 lower than its nearest rival—but also got an additional no-bid “consulting contract” worth more than $98,000 at the same time. The school system’s budget director insisted to the paper that there was no connection between the two contracts. The school superintendent told the Times that, although the school system had fired ABSS for poor performance on a 1991 contract, he did not know that ABSS had a spotty credit record, as reported to financial reporting company Dunn and Bradstreet, according to the Times.
Howard says he cannot recall any controversy in Prince George’s in the mid-1990s, and that his company certainly is not in trouble today. “Everything is going fine—not just with the state of Maryland,” Howard says. “I have contracts with the state of Georgia, the state of Florida, South Carolina.”
ABSS and its executives have contributed extensively to political candidates in those states, according to federal and Maryland campaign-finance records. The company, its founder, his family, and executives, have together given more than $41,000 to Maryland state political candidates since 1999. That does not count a $5,000 gift to sponsor then-Gov. Parris Glendening’s 1999 inaugural ball, reported in the The Sun. Theodore Howard and Naomi Howard together contributed an additional $34,000 to federal candidates since 1999, according to campaign-finance records maintained by Opensecrets.org. The Howards have given $1,000 to Sen. John Kerry and $2,000 to President Bush. They’ve given to both Democrats and Republicans on the state level as well, favoring P.G. County Executive Jack Johnson, a Democrat ($5,000), as well as Republicans Lt. Gov. Michael Steele ($2,000) and Gov. Robert Ehrlich, who received $1,000 checks from both Naomi Howard and ABSS business-development manager Debra F. Carter during a May 27, 2004, fundraiser that reportedly banked $1 million for the governor.
Ross, of ACS, says her company chose ABSS for its EZ Pass contract at about that time. “It’s not like a formal process,” she says, but denies any politics were involved.
In December 2004, Maryland Transportation Secretary Robert L. Flanagan named Carter acting assistant secretary. Carter, whose office oversees risk management, safety, Americans With Disabilities Act compliance, and other issues along with MBE certification, says she had not heard of the ABSS case and would not, as a function of her state job, handle issues with her former employer. She says that in her five and a half years with ABSS she was always paid on time, but she had not “had any contact” with the company since her departure, and thought it was under new management.
Carter says she doesn’t think ABSS’s political contributions were “any more than any other MBE,” and that “if I ever gave money, it was on my own initiative.”
Although Theodore Howard says he doesn’t believe he and his company gave so much money to politicians, those political gifts may have weighed heavily on ABSS. Dunn and Bradstreet reported that as of January ABSS had past-due accounts totaling $323,100, with $215,000 placed for collection by the company’s creditors. The report said ABSS’s payments have been generally 120 days late, while the industry average is nine days late.
The most recent political donation reported from ABSS was a $1,000 contribution to Jack Johnson’s “Vision for 2006” slate, recorded last Nov. 21. That would have been two months after Naomi Howard, Theodore’s daughter—who at one point was ABSS’s president—came to the EZ Pass offices to deliver cash in envelopes, according to Carolyn Dunyoh, who says she worked at EZ Pass before switching over to the Child Support contract early this year.
“But she didn’t have an envelope for me,” Dunyoh says. “So she handed me one envelope and said, ‘This person isn’t here.’ It had $157 in cash in it. I remember it was a Friday evening. She said something like, ‘Do you want to keep this money to tide you over the weekend?’
“I said, ‘No, I’ll wait till they cut another check.’ It took a while, but they finally did.”
Some workers say they got paychecks drawn from another contractor called Infinium Services, which they say was or is Naomi Howard’s company. City Paper could find no record of that company’s existence, though, and Theodore Howard says he never heard of Infinium.
Naomi Howard did not return calls seeking comment.
Although Naomi Howard was listed as president on ABSS’s web site until March 9, and her name is in the company’s telephone directory, Theodore Howard says she stepped down as president about a year ago. “She couldn’t take the pressure,” he says.
30 Years Later, the Times Discovers "The New Poor" (2/21/2010)
The Times on "the New Poor": they're actually old, and we're all pretty fed up by now
Developmental Responsibilities (8/6/2008)
Hotel and Restaurant Workers Union Organizes to Fight For Better Development Policy
Old Habits (7/28/2010)
Medicalization is the hot new thing in drug treatment. Just like in 1970.
Room for Improvement (7/14/2010)
Celebrated crime control measure actually a flop, former chief reveals
Shelling Out (7/7/2010)
Mortgage broker goes bankrupt, seeks mortgage modification as taxpayers face mounting bailout bills
812 Park Ave.
Baltimore, MD 21201