Judicial Council has a change of mind…releases Aleut settlement agreement

Posted on October 6, 2015


Yesterday we received a copy of the settlement agreement between Aleut Global Solutions and the Judicial Council from Yen Interactive Media. While a previous request for that same settlement was refused with a claim that the settlement was confidential, the judicial council appears to have had a change of mind and released the agreement to Yen Interactive Media on Monday morning.

On the courts website, there was a dismissal of case number CGC 09 495035 the corresponding declaration that accompanies the dismissal  regarding waived fees was not executed indicating that the matter was settled. We’re speculating that the reason that there was no declaration made was because no court fees were waived. Nonetheless, the citizens of California will be happy to learn that the AOC recovered and did not give away $9,448,510.67. This settlement with AGS consists of a 5.5 million dollar payment. The balance was for invoices that were submitted but payments were withheld from AGS due to their license status.

We’re speculating the reason for releasing this settlement now is because the AOC still must settle the Jacobs case and that case is worth more than double the AGS case. Knowing there was a settlement in the AGS unlicensed contractors suit would appear to offer some settlement leverage in the unlicensed Jacobs suit.

Utilizing the AOC’s own words, The responsive records that reflect the total settlement include: 1) Settlement Agreement and Mutual Release between Judicial Council of California, Administrative Office of the Courts and AGS; 2) AGS’ Limited Guaranty of Payment Agreement executed in relationship to the Settlement Agreement and Mutual Release; 3) Judicial Council’s First Amended Complaint for Breach of Contract and Violation of Contractors’ State License Law; 4) AGS’s Cross-Complaint for Breach of Contract and Unjust Enrichment, and; 5) AGS’s Request for Dismissal of Cross-Complaint for Breach of Contract and Unjust Enrichment. The documents referenced can be reviewed in this link.

We’re not entirely positive why the AOC changed their mind which is why we’re speculating. Nonetheless, this is a positive development and a minor move towards transparency and accountability.

Real accountability can only happen when state employees who knowingly engaged with the unlicensed contractors and ran up millions of dollars in billings after they knew for a fact that they were unlicensed lose their jobs. That should consist of the entire Facilities Management management team who initially tried to hide from upper AOC management that the contractors were unlicensed, then tried to launder contracts in increments less that $500.00 under the mistaken belief that no contractors license is required. The problem with that theory and the conspiracy to launder contracts in increments less than 500.00 is that anyone working on a state building must be licensed to do so and there is no $500.00 floor like there is for private entities.

We would sincerely hope that we get to witness the other shoe drop and that it results in some career and pension ending terminations but as we have seen before many times, these fine public servants will probably have buildings, conference centers and awards named after them.