A number of stories exist about an entity known as Jacobs Facilities, Incorporated, an entity whose contractors license expired in late 2008 and who was operating in the courts doing business as “Team Jacobs” since 2006.
Mr. Michael Paul, a former senior technical analyst with the AOC initially broke the story of “the contractor that no longer exists.” As the evidence we’ve recieved shows, the AOC directed the Attorney General to disregard business and professions code 7031 and file suit for only two years of the four years that “Team Jacobs” was doing business in the courts. Furthermore, the AOC has permitted “Jacobs Project Management” to fulfill the contract void by operation of law that was previously held by the unlicensed contractors.
This year, the AOC has budgeted about $50 million towards facilities modifications for this fiscal year, all while filing suit against the same entities for $40 million dollars for the last two fiscal years. Regardless of the AOC playing games with the name of their contractor, california law states that an entity must be licensed at all times during the performance of a contract. Both the Appellate Court and the Supreme Court of California have affirmed that a subject without a contractors license at any time during the performance of the contract experiences the harsh reality that not a dime will be paid to them for any of the work. California has one of the strongest public policies against the use of unlicensed contractors in the nation and if precedence is any guide, Michael Paul was right to file a taxpayer suit against the AOC for two reasons.
1. Leaving a substantial amount of taxpayer money on the table by filing suit for only a fraction of what is owed is not sound stewardship of scarce public funds. Neither is extending the contracts to these entities when the record shows that not only were the entities unlicensed, they’ve been grossly overcharging for their services.
2. Lawbreakers, even if they work for the judicial branch are not above the law.
Analyze the evidence pertaining to how much the AOC spent the last two fiscal years on the unlicensed contractors that the AOC supplied to the Assembly Committee on Accountability & Administrative Review. Then add up the amounts sought in the lawsuits that the Attorney General has filed against the previously unlicensed contractors. These numbers should not be the same and yet they are. For your reading pleasure, here are a few key decisions that should underscore both cases against the unlicensed contractors as well as the taxpayer lawsuit launched by Michael Paul against the AOC.
Great West Contractors, Inc. v. WSS Ind. Constr., Inc., 162 Cal. App. 4th 581 (2008)
MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co, Inc.36 Cal.4th 412, 427 (2005)
JusticeCalifornia
November 6, 2010
Two questions:
a) Why wouldn’t the Judicial Council/AOC seek full recovery of the taxpayer funds paid to Team Jacobs?
b) Why would the Judicial Council/AOC continue to do business with a contractor that i) let its license lapse and ii) overcharges?
Just wondering.
judicialcouncilwatcher
November 7, 2010
Two answers:
a) Someone way high up in the Judicial Council/AOC has a conflict of interest that remains undisclosed. For those who participate in California’s Savings Plus program, you’ll be happy to know that one of Jacobs largest investors is a little company called Northern Trust. The same Northern Trust that manages your savings plus account. Many readers may not know that a part of their retirement nest egg may rely on Jacobs performance.
b) That same undisclosed conflict of interest caused the AOC to turn a blind eye towards the law. If you look at public statements on the matter, the most vociferous defender of these sweetheart deals thus far has been Ron Overholt, who has perpetually ignored the issue of price gouging and defended the quality of the work of these contractors, even during the period they were unlicensed.
JusticeCalifornia
November 7, 2010
A few more questions if anyone has the answers.
a) Who owns Northern Trust?
b) Who made the decision to invest in Jacobs?
c) Did/do those who made the decision to invest in Jacobs participate in the California Savings Plus program?
d) Did/do members of the Judicial Branch, Ron Overholt and/or those others managing the AOC litigation against Jacobs and/or contracts with Jacobs participate in the California Savings Plus program?
This seems sort of like people with insider knowledge trading with insider knowledge.
If the Judicial Branch has essentially invested in Jacobs, and is making contracts (throwing money at) or curtailing lawsuits with Jacobs to enhance and/or protect the “investment” rather than to protect the public. . . .
judicialcouncilwatcher
November 7, 2010
There is another kink that might explain why the AOC was unhappy with Mr. Paul’s disclosures. When the AG goes after the unlicensed contractors, the money that the AG recovers does not go back to the AOC but goes back to the general fund, so there is no incentive for the AOC to pursue state funds.