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 its contract cleaning the federal courthouse in Las Vegas. He alleged the contract was taken away and given to another company that had an official sitting on the board of directors at SourceAmerica.
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.
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.