Senate President Mike Haridopolos steered millions to company with connections

Published June 14, 2012

TALLAHASSEE — When a politically connected company was in danger of losing a $9.4 million no-bid contract with the state, Senate President Mike Haridopolos came to the rescue of the outfit — a firm that employs his good friend and political benefactor as a lobbyist.

Haridopolos staved off the threat to the deal with the Department of Juvenile Justice and quietly steered $6 million in additional dollars to the company, despite the vigorous objections of agency leaders and top Republican senators.

The move allowed Evidence Based Associates, a Washington-based probation program, the exclusive contract to handle the state effort to divert at-risk youth from costly prison beds into community programs. The company kept the business despite recent reports that it had failed to comply with key terms of the agreement — and to the chagrin of a long list of providers who wanted to compete for the work.

The company's lobbyist, Frank Tsamoutales, is a Brevard County Republican who has been a financial backer of Haridopolos since the Brevard County legislator was first elected to office in 2000. He went to work for EBA in April 2011, earning between $20,000 and $29,000 in the first year, the same year Haridopolos became Senate president.

The investment paid off.

When a legislative conference committee decided it was time to lower the cost of the project, lawmakers wrote language into the budget ordering the DJJ to rebid the contract after eight years with EBA. That's when Tsamoutales spoke to Haridopolos.

The final budget signed by Haridopolos and House Speaker Dean Cannon deleted the requirement that the contract be put to bid.

Haridopolos referred questions about the matter to his spokeswoman, Lyndsey Cruley, who said a health services exemption allows DJJ to forgo competitive bidding of the contract, and that EBA earned the work with a "proven track record of positive results."

Cruley said no one in the Senate exercised improper influence over the contract dollars.

"The Senate in no way steered that contract toward EBA," Cruley said. It was juvenile justice administrators, she added, who chose not to exercise their authority to seek competitive bids.

But lawmakers who opposed the contract consider it a gift from one of the state's most powerful legislators to one of his closest friends.

"He is as close to President Mike Haridopolos as any lobbyist could be," said Sen. Mike Fasano, R-New Port Richey, referring to Tsamoutales.

Fasano's outspoken opposition to Haridopolos' agenda cost him his chairmanship of the powerful Senate Criminal Justice Appropriations Committee, which controls the budgets of several agencies. He now believes his opposition to Tsamoutales' no-bid contract contributed to the Senate president's animosity toward him.

Long contract history

Haridopolos and Tsamoutales have a history of helping each other out. One of Tsamoutales' clients and closest friends last year paid Haridopolos $5,000 a month — $60,000 a year — to be a consultant. Haridopolos earmarked $20 million in state money for a biomedical development sought by another Tsamoutales client.

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Tsamoutales made no apologies for appealing to his longtime friend to stop what his fellow lawmakers had done. "That was our job,'' he said.

But Haridopolos didn't just give his client a chance to hang on to a contract one more year. He encouraged Senate budget leaders to steer another $10 million to the program in recognition, Tsamoutales said, of a job well done. "Performance counts," the lobbyist said.

Legislators whittled that $10 million down to $6 million.

The probation contract belonged to EBA long before Haridopolos rose to power. Indeed, since EBA was first awarded the no-bid contract in 2004, DJJ renewed it twice without having to go through a competitive bidding process, using an exception to the state's contracting rules that pertains to "health services."

EBA oversees the probation effort, but all the direct care and supervision is subcontracted to other groups, records show. It also knows how to play the lobbying game. Before it hired Tsamoutales in 2011, its go-to lobbyist in the Legislature was Esther Nuhfer, a close friend of then-House budget chief and now U.S. Rep. David Rivera, R-Miami.

The results of the program have been laudable. State auditors at the Office of Program Policy Analysis hailed the diversion program as so successful at keeping at-risk kids out of expensive residential detention facilities that it concluded that the contract saved the state $51.2 million between 2004 and 2010. But in the last year, Fasano and others began raising questions.

In an Aug. 17 letter to the Department of Juvenile Justice, Fasano said he was surprised to learn the contract had never faced a competitive bid and, despite the program's success rate, he urged the department to hold the contract "to a higher level of scrutiny." He ordered that it be "either immediately canceled and properly rebid to ensure the public's trust" or handled in-house.

DJJ Secretary Wansley Walters agreed and, in a Sept. 16 letter to Fasano, said "upon closer examination, we have determined that the use of this exemption from competitive procurement may not be in the best interest of the state."

Strong call for rebid

Unlike most of DJJ's contracts with private providers, EBA's agreement with the state allows the company to evaluate its own performance. DJJ does routine contract monitoring.

The agency's most recent review of the contract showed that some of the company's subcontractors have fallen short of key provisions that two-thirds of the program's clients remain out of jail, and that no more than 40 percent of its graduates commit new crimes.

Some of the efforts served far fewer youth than the contract called for, as well.

Walters followed through on her assurances to Fasano, and sought interested bidders. By January, the agency had heard from 11 other companies, some of whom said they could reduce the amount of money spent on administration. Legislative budget leaders inserted a requirement that the agency bid out the entire contract— the $9.4 million original contract, which was set to expire in the fall of 2013, and the additional $6 million. When the first draft of the budget omitted a requirement that the $9.4 million contract be put up for bid, Sen. Ronda Storms objected.

"If it hasn't been rebid since 2004, you can't convince me there's not a better deal out there unless I see it for myself,'' said Storms, R-Valrico, during a Feb. 8 meeting of the Senate Criminal Justice Appropriations Committee.

"We agree with you,'' DJJ's chief of staff, Christy Daly, told the committee.

Sen. Mike Bennett, a Bradenton Republican and a key Senate leader, also recommended the contract face competition and urged the agency to consider cutting out the middleman.

Tsamoutales said Tuesday there was "no intention on the Legislature's part" to put the contract out for a bid and "the governor's office went along" because "the program has saved taxpayers millions over the course of this contract." He said the Legislature's reason for adding the extra $6 million was "expanding the contract would expand the savings."

Storms, who announced this spring that she will not seek re-election to the Senate, called the situation "just nauseating."

"We are giving money to people who are not producing the right (results),'' Storms said, "and we are pouring in millions of dollars."