BATON ROUGE – A protracted and expensive legal fight is threatening the future of a 78-year-old state program for blind business owners, but the problem is not as simple as some blind vendors allege.
The federal Randolph-Sheppard Act of 1936 launched programs across the country to help the visually impaired make a living by selling concessions – first cigarettes, now food and beverages – on public property.
The state of Louisiana’s version of Randolph-Sheppard has been robust ever since, using commissions to build up a Blind Vendors Trust Fund of nearly $2 million that supports equipment purchases, insurance and paid sick leave for all of the qualified vendors.
But in the last three years, the fund balance has dipped from $1.3 million to $762,000, and the depletion has coincided with two major changes: the program’s shift from the Department of Social Services to the Louisiana Workforce Commission in 2010, and a series of lawsuits over the way the state’s plum blind-vendor contract, for food service at the Fort Polk military base in western Louisiana, was procured in 2011.
The state has used the Blind Vendor Trust Fund to pay some of the costs for outside lawyers in a fight against the very blind vendors the fund is designed to help. Terry Camardelle, a blind vendor, member of two state advisory committees and the executive director of the Randolph-Sheppard Vendors of Louisiana, decries that as immoral.
“I just think it’s unfair, unethical,” Camardelle said. “It’s probably not illegal. I’m sure they have ways of covering it.”
But even with the costs of defending themselves against the vendors and service providers who didn’t like the Fort Polk selection process, state records show that contract is actually bringing twice as much money into the Trust Fund as the fund has paid to the lawyers.
“I’d rather not spend a penny on litigation, ever,” Workforce Commission Executive Director Curt Eysink said. “But here’s the thing: The program that we’re defending with those lawyers raises more money than the cost of those lawyers.”
Eysink acknowledges that his agency needed outside legal advice when the blind vendor managing the $12 million-a-year food service contract at Fort Polk died in 2011. The lucrative contract could have been lost without a qualified blind vendor, and rebidding the deal was beyond the expertise of anyone on the former Labor Department’s six-person legal staff, Eysink said.
So, the Workforce Commission hired Wade Shows, a Baton Rouge lawyer who happens to be Attorney General Buddy Caldwell’s campaign treasurer and go-to guy as outside legal counsel in the state’s biggest cases. Shows does about $3 million in legal work for the state, charging $175 an hour for everything from the BP oil spill litigation to the controversial collection letters demanding repayment from thousands of Road Home grant recipients.
But the effort to avoid controversy ahead of the Fort Polk re-bid proved futile. Only one blind vendor application out of nine bidding for the Fort Polk deal was deemed complete. The blind vendors who make up two key advisory committees, the Blind Vendor Trust Fund Board and Blind Vendors Elected Committee, complained they weren’t consulted and ended up walking out of a key selection meeting.
The established blind vendors took the Workforce Commission to arbitration. Then the previous service provider at Fort Polk, a company called Cantu Services, sued the state claiming the process wasn’t fair.
And that’s when the Workforce Commission really needed Wade Shows. The state has paid him and his firm $360,000 in the last two and a half years to defend its selection of the new blind vendor, Lee Frazier of Lake Charles, and a California-based teaming partner, Blackstone Consulting Inc.
The state has been using the Blind Vendors Trust Fund to pay the lawyers and to keep fighting the blind vendors and their allies in court.
But the animosity between the state and Camardelle’s group of blind vendors runs so deep that they don’t even understand the way the fund money is being used. Camardelle believes that most of the fund has been depleted because of the legal bills.
But because the federal government matches 78.7 percent of all qualified expenditures from the trust fund, the state has only had to use about $80,000 to pay the legal fees, according to documents provided by Eysink’s office.
Camardelle also says the federal matching dollars should be put back into the trust fund. Eysink says that’s not permitted because the U.S. Department of Education wants the money spent on qualified program costs, not “parked.”
A unique agreement
State records also show that the vast majority of trust fund expenses have been for equipment and expanding vending opportunities at large full-service cafeteria locations, including three state buildings in Baton Rouge and the Federal City complex.
The agreement with Blackstone at Fort Polk is unique, the only contract in the state under which a blind vendor’s teaming partner has agreed to pay a portion of its profits to the trust fund. That’s normally what non-blind vendors do so they can win the right to manage locations otherwise reserved for blind business owners.
Even though 52 percent of profits at Fort Polk go to the blind vendor Frazier, Blackstone also agreed to pay 10 percent of its profits to the trust fund in June 2012 and has deposited $171,000 since.
But Camardelle and Kevin Donelson, an attorney for Cantu Services, say that’s also unfair, because Cantu and other bidders were never informed that they could have offered such a sharing agreement. It’s unclear when in the contracting process Blackstone agreed to contribute to the trust fund, and Donelson says state officials have testified in depositions that they don’t know whose idea it was.
Donelson also alleges that Frazier originally wanted to keep Cantu at Fort Polk, but was directed by the Workforce Commission to interview Blackstone and another company, in violation of the selection rules.
“Frazier did select Cantu, notified Cantu by email that Cantu was his choice and he subsequently notified Cantu that the Louisiana Workforce Commission was requiring him to interview Blackstone and one other potential teaming partner,” Donelson said.
Eysink said that’s not true.
“We did not direct the choice; that was (Frazier’s) choice,” Eysink said. “We did approve it. And I think that that has proven to be a good choice on his part and a wise move on our part.”
Camardelle and fellow Randolph-Sheppard Vendors of Louisiana official Rocky Marchiano are trying to get the program moved – again – out of the Workforce Commission and under the Department of Health and Hospitals. Eysink says that makes no sense.
It seems the only thing the state and some of the blind vendors can agree on is that not enough visually impaired businesses are managing the various vending locations across the state.
According to Louisiana Workforce, 69 blind vendors manage 75 locations statewide. Another 60 locations are controlled by non-blind managers, who must pay commissions into the blind vendor trust fund.
State Sen. David Heitmeier, an optometrist, said he’s working on legislation that will expand opportunities for more blind vendors.
“It's my hope that those dollars will be used for training so we can train additional visually impaired individuals to create more jobs in the visually impaired community and also use those dollars to create the routes we need to so they'll have a job after they're trained,” he said.
But with the relationship between the blind vendors group and the state at its most toxic, Heitmeier's first job might have to be peacemaker.
“There’s a lot of noise around and (I want to) get rid of the noise associated with what's taken place in the past,” Heitmeier said. “And I want to say, ‘This is the goal; how do we get to that goal?’”