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Tuesday, May 21, 2024 | Back issues
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Nonprofits Fight Over Seal on Leaked Tapes

SAN DIEGO (CN) - The two sides in a lawsuit over government contracts for disabled workers argued over whether secret recordings that detail bid-rigging should be sealed, though WikiLeaks made the tapes public months ago.

U.S. District Judge David Bartick heard arguments Monday from defendant SourceAmerica as to why the court should seal secret recordings held by plaintiff Bona Fide Conglomerate which SourceAmerica claims contain confidential client-attorney information.

The hearing was the latest stop in a long-running feud between Bona Fide and SourceAmerica. Most recently, Bona Fide sued in 2014 claiming SourceAmerica breached a previous settlement by - as the allocating agency for the government's AbilityOne program to provide procurement opportunities for services by the disabled - stiffing Bona Fide on contract awards in favor of bids by companies run by SourceAmerica's board of directors.

The AbilityOne program is a government procurement system where nonprofits which "substantially employ blind or severely disabled persons" can list their pre-approved goods and services for purchase by the government. At least 75 percent of the employees who work for companies that receive AbilityOne contracts must be blind or severely disabled.

At Monday's hearing, SourceAmerica pointed to seven instances in 30 hours of recordings on at least 26 separate tapes where confidential information is revealed and should be sealed.

But the tapes are already available online, made public by watchdog site WikiLeaks this past November.

The conversations involve Jean Robinson, former lead counsel for SourceAmerica, and Ruben Lopez, CEO of San Diego-based janitorial services nonprofit Bona Fide. In the recordings, Robinson discusses the bidding process for contracts handed out by SourceAmerica as being rigged and discusses burning contract documents or altering them by removing letterhead. She also said SourceAmerica operated like "the mafia."

SourceAmerica has since fired and sued Robinson.

Batrick said sealing tapes already made public is "like putting the proverbial genie back in the bottle."

SourceAmerica attorney Kevin Alexander asked Bartick to exclude the press and public from the proceedings, which the judge denied. Members of the public were asked twice to leave the courtroom because of the confidential nature of what was discussed, however.

"This is new information we've been asking for years," Alexander said. "It has been leaked out and used in other litigation and appeared on CNN. They are using the recordings as a media tool to exert pressure."

SourceAmerica also claimed excerpts alleged in the first amended complaint recently filed by Bona Fide were not included in the original complaint, leading SourceAmerica to move to strike portions of the amended complaint.

The company claimed it has asked Bona Fide multiple times to hand over the tapes, and argued that Bona Fide should have gone to the court immediately upon receiving the tapes for a determination on whether they contained sensitive attorney-client information that should be sealed.

Bona Fide still has not handed over transcripts or recordings to SourceAmerica, which argued Bona Fide was not at leisure to make that call.

Bartick agreed.

"The crux of this is addressing this conflict, that conflict being an attorney has a duty to his client, but he also has a duty to the court, to the profession," Bartick said. "He does have an ethical obligation to maintain ethical standards."

SourceAmerica also claimed Bona Fide attorney Daniel Cragg conspired with Lopez to secretly tape conversations between Lopez and Robinson, which they denied.

"Mr. Lopez made the recordings before counsel was even hired," Bona Fide attorney Joe Ergastolo said. "Mr. Cragg could not conspire if he did not know Mr. Lopez was recording the conversations."

Bartick said he will issue a written order on the matter.

Meanwhile, SourceAmerica and the AbilityOne program are currently being investigated by the Justice Department for fraud, mismanagement, steering of contracts and other claims. In addition to the federal investigation, at least four separate inspectors general offices are performing their own investigations into AbilityOne and SourceAmerica.

The investigators are looking into claims the companies who receive AbilityOne government contracts do not actually employ 75 percent of their workforce as severely disabled or blind people.

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