Wednesday, April 29, 2009

Educational Service Centers: Tracking down the Tremco school roof jobs

According to reports, the following member schools of the Northwest Indiana Educational Service Center entered into no-bid Tremco roofing contracts for the 2007-08 school year. I will be gathering records from each school pertaining to the specific roof jobs. Since Tremco no-bid roofing contracts go back as far as the year 2002, the task will be daunting, but worthwhile.

I have also requested similar records from the other eight ESC's, and will be tracking down information from the various school districts throughout the state as well.

In addition, I am seeking taxpayers from various parts of the state who would be willing to assist me in gathering records. Please email me at if you would like to participate in this worthwhile project. The map is divided up into nine regions as shown. I'm looking for taxpayers from these various regions to help gather public records for the purpose of assessing the damage inflicted upon Indiana taxpayers.

Northwest Indiana Educational Service Center Schools that bought a Tremco roof in 2007-08:


East Porter County

Lake Station

Union Township

Wednesday, April 22, 2009

"Bidding Process saves Penn-Harrison-Madison School Corp. $75,000; Penn High School roofing bid chosen by state service center was higher"

I'm still sifting through public records that I have collected over the past few months, and I came across an interesting letter written by Doug Copley, a Tremco rep for the Fort Wayne area, that was addressed to the Executive Director of the Northern Indiana Educational Service Center.

Apparently, questions were raised about the AEPA bidding program, which led me to an article that appeared in the South Bend Tribune. The article was titled, "Bidding process saves P-H-M $75,000; Penn High School roofing bid chosen by state service center was higher," and it appeared in the August 10, 2006 edition of the newspaper.

"After a spring of budget cut discussions, Penn-Harris-Madison School Corp. board members received some good financial news at their meeting Monda," began the article written by staff writer Erin Miller.

"Board members voted in July to seek local bids for a roofing project at Penn High School, instead of using bids collected by a state service center for similar projects. The move saved the corporation some money."

"We felt that the state-authorized bid was too high," said Tom Hartman, director of facilities. "By bidding this way, we can save about $75,000."

This is an example of how school officials should be doing their jobs. The school board for this school district were doing the jobs they were elected to do, and Mr. Hartman should be commended for his excellent discernment.

The reporter was wrong about one thing, though. There was absolutely no "state authorization" for the illegal bidding process.

Tom Hartman, the director of facilities, made a very wise decision, and likely spared his school district from a potential liability risk had the school district opted to enter into a contract with Tremco by using the illegal AEPA bidding scheme.

You can read Tremco's spin/response to the article below. Click on to enlarge.

Monday, April 13, 2009

Is the AEPA nothing more than a paper company?

Don't bother looking for an address or phone number for the Association of Educational Purchasing Agencies (AEPA). There isn't one. And as far as I can tell, the outfit only exists on paper. There's not an office, a secretary, or even a copy machine. There's no place or no one to go to for public records. The website that you can log onto was designed and is maintained by the Wilson Education Center, located in Charlestown, Indiana.

According to the AEPA's own minutes, for most of its existence, it had no legal status or liability insurance.

"This Agreement was sent to AESA whose lawyers reviewed it. The AESA council recommended against AESA entering into the agreement because AEPA has no legal status or liability insurance, and any legal action against AESA might include anyone with a relationship, hence AESA." (December 28, 2003)

If the AESA wanted nothing to do with them, then why should we?

AEPA Meeting Minutes Indicate Serious Problems/Flaws in Organizational Structure

I spent a few hours reading through Meeting Minutes for the Association of Educational Purchasing Agencies and am still trying to digest much of what I've read. One thing is for certain; however, and that is, there are serious questions as to the nature of this organization and the legality of some of their activities. I am currently working on writing a detailed report of my findings, which I will release to various investigative agencies around the country. In the meantime, I'll share a few possible headlines, along with a few details to give you an idea of what's coming.

AEPA Member Admits "Bids" Have the Potential to be Illegal

"John Jankowski said that when NJPA bids on behalf of 30 or more states, the bid has the potential to be illegal because of different terms and conditions required in each state. Mike Hajek said they had never said it was legal. John Jankowski said that AEPA needs to be certain all activities associated with AEPA are legal so that AEPA is not damaged in the future." (Ma7 9, 2004)

Maybe a better headline for this should read, "AEPA Should Have Listened to John Jankowski"

You Scratch My Back and I'll Scratch Yours

Most of the records reflect that Tremco personnel played a key role at the bi-annual AEPA meetings. During the May 9, 2004 meeting, Craig Nelson of Tremco/Weatherproofing Technologies, Inc. issued a report on the vendors' meeting regarding marketing. One of the ideas presented by Nelson was to "involve vendors in adding new states" to the AEPA membership. Did anyone besides me see the conflict-of-interest that would present itself with the implementation of this idea?

The concept of co-branding was also discussed. I have one of those co-branded brochures marketing the roofing program. Tremco and the Wilson Education Center are jointly visible on the flyer that was apparently distributed to potential member school customers in Indiana. This doesn't pass the smell test either.

"The concept of co-branding was discussed at length, where members would market their logo in tandem with AEPA. This would allow vendors to provide a single AEPA brochure that would be recognized by all procuring bodies." (May 9, 2004)

AEPA Admits Possibility of 'Bid Law Problems' as Early as 2004

"Liz Storey made a report on roofing, incidicating that there had been $29 million in roofing sales. She reported a survey of the states showed extreme satisfaction with the vendor and the volume of sales. Problems included the lead-time required for roofing sales, and in some states, bid law problems. Craig Nelson of Weatherproofing Technologies said they were using good marketing efforts and had a growing momentum. The committee recommended bidding roofing again this year..."

"Craig Nelson from [Tremco] Weatherproofing Technologies, Inc. (WTI), stated he would like to see the minimum quality sought in the rebid of roofing be the same as in the previous solicitation. He also stated he expected WTI's volume to increase from $35 million to $50 million." (May 9, 2004)

Hey Craig, I have a question for you. What do you mean by "minimum quality?" Would your competitors consider your definition of "minimum quality" to be proprietary, which would effectively lock Tremco's competition out?

Of course the ESC's were satisfied with Tremco as its roofing vendor. They were raking in huge profits in the form of "administration fees!" More details to come on that later. I'll be checking with each state to find out which ones experienced bid law problems and how it was addressed by Tremco and the gang.

Conflict-of-Interest Question Raised in bidding process by Kyocera National & Government Accountant

From the December 28, 2003 report: "An email from Philip Borchardt, National and Government Accounts for Kyocera, a letter from Kevin Flood, V.P. of National/Government Accounts and a response from Max Luft were reviewed. One item that needs to be addressed was the statement from Flood, stating, 'we have...been told, that the only surviving bidder was in fact a Co-op Member of AEPA, which was bidding on behalf of a manufacture (sic). If this fact is true, it poses, in our opinion, a 'Conflict of Interest' in the bidding process." (December 28, 2003)

Mr. Flood, you are spot on. In my opinion, there are many conflicts-of-interests abounding at the AEPA, and the organization should be dissolved.

"AEPA has no legal status or liability insurance"

This is a big one, folks! Apparently, there was a discussion about forming a strategic alliance between the AEPA and the AESA; however, lawyers for the AESA recommended against it.

"This Agreement was sent to AESA whose lawyers reviewed it. The AESA council recommended against AESA entering into the agreement because AEPA has no legal status or liability insurance, and any legal action against AESA might include anyone with a relationship, hence AESA." (December 28, 2003)

No legal status?!! No liability insurance?!! This is the organization that hatched the bidding scheme that has been deemed illegal in Indiana by the Attorney General. Does this mean that individual members are legally liable for the decisions they made prior to their recent incorporation? Those AESA attorneys were sure on the ball! They deserve a little bonus for that piece of golden advice.

Lack of Oversight Raises Concerns

A Summary of Use report was presented during a meeting in 2003, wherein it was reported that a total volume reported by the members for the nine month period was $58,842,500.

"The greatest volume was reocrded by Weatherproofing Technologies (Tremco) with $21,464,000 for the period through September 30...There was a concern that there were no comparative volume and participation from vendor records." (December 28, 2003).

AEPA Financial Concerns Raised in 2005

"Max Luft, chair reported Cooperative Educational Services of Albuquerque, New Mexico, is serving as fiscal agent. Records indicate a balance of $4,700 down from $7,240 last year. The decrease is due to high costs for the Las Vegas meeting which included an event Tuesday evening, without increasing registration costs."

AEPA Admits to 'Varying standards' in approving Vendor Contracts

This is another big admission by the AEPA. This shows that the entire 'bid' process was illegitimate. The fact that a handful of self-serving educrats from around this country perpetrated an illegal bidding scheme of such an enormous magnitude is almost hard to comprehend. Here it is from their January 20, 2006 report:

"A general concern was expressed that a report of vendor dollars be gathered prior to the spring meeting. General comments included those made by Elmo Kallner of Ohio that surveying each member in the use of each contract is essential, and that those summaries need to be made by each committee chair. Liz Storey indicated that there appears to be varying standards in approving and extending the vendors and that a consistent assessment protocol needs to be established..." (1/20/2006)

It's a little late to be thinking about protocol and standards, don't you think, Liz?!! According to this, there was absolutely no oversight, and the so-called bidding process was a sham to begin with! The timing of this new revelation is also revealing. Was this issue raised because of the controversy that erupted in Indiana? Did this same controversey also cause AEPA officials to recently incorporate its organization to limit individual liability? I think that will only protect the officers from decisions made after the incorporation.

A Question for Law Enforcement Agencies: 'Administrative Fees' or Kickbacks?

This is another whopper, folks! This is where it gets sticky for the ESC's. The issue of "Establishing a common vendor fee" was raised at the May 2, 2008 AEPA Meeting. This vendor fee has also been referred to as an "administrative fee." But is it really something else?

The trouble with this is, at least in Indiana, there is nothing to administrate for the ESC's since Tremco handles all its own sales-related work, and the individual school corporations maintain the records. I know this, because after four years of research, I've learned how the scheme operates.

When I first began requesting bidding documents and related materials from the Wilson Education Center, I was informed by former director Larry Risk that the WEC does not maintain any of the records related to the roofing "bid." And yet, there is a full admission in other records that it not only receives "money back" from Indiana Tremco roof sales, but it also gives "money back" to the various ESC's in which district various roof projects are sold. This does not constitute administration.

Furthermore, this is a huge amount of money "given back" for doing almost nothing to earn it. Tax dollars are tight. This money could be spent for real education. Just imagine how many teachers could be hired using the "give back" money!

In fact, Larry Risk admitted as much in his deposition that he was compelled to give in the matter of Brennen Baker vs. Tremco. Here's a little tidbit from that:

Q. Okay. Okay. After the -- the bid is the -- the Tremco bid is reviewed and accepted by your organization, is there any oversight that Wilson has over the --the - to-be-installed roof?

A. No.

Diana's note: There you have it, folks! Not one bit of oversight from the state agency that claims to be qualified to sell roofing materials and services. This is why this entire scheme must be investigated by state and federal agencies.

He also admitted in that deposition the he had "no expertise in roofing at all." Well, that's obvious!

Here's the details of the discussion from the May 2, 2008 report:

"There was agreement that the decision needs to be reviewed at the next meeting, prior to the next bid. Some concerns to be considered include:

Ohio: Vendors need to figure a way to do this, it is a bid requirement

Minnesota: What you do with increased administrative fee is to reinvest

Indiana: Our agency keeps 1.2% and gives 1% to other ESA's

New Mexico: It is difficult for smaller vendors to keep different rates for each agency

Nebraska What is most beneficial to the vendors is probably a uniform percentage

Asked if any agencies could not go with a 2% administrative fee, Arizona and Indiana said no. Pennsylvania could only make that adjustment with board approval.

A subcommittee was appointed with the task of providing a report at the next meeting. The subcommittee consists of Llew Perry from New Mexico, Katrina Burnett from Michigan, Larry Risk from Indiana and Elmo Kallner from Ohio."

The next meeting is scheduled for April 19 thru April 21, 2009 at the Embassy Suites Miami International Airport Miami, Florida.

You can read the agenda here: Agenda

More Financial Concerns

"Max Luft, Chair, reported that Cooperative Educational Services (CES) in Albuquerque, New Mexico is serving as AEPA fiscal agent. Records show (#41) a balance of $22,453.82, up from $6,999.84 last year. The increase is due to lower costs and higher vendor contributions for the Albuquerque meeting."

Vendor contributions?!! Really?! Isn't that interesting?

What amazes me the most, perhaps, is that a poorly run organization with a shoestring budget, no legal status, and no liability insurance could reek so much havoc on taxpayers throughout this nation!

The first meeting report reveals the fact that they had no money at all, and now it appears as though vendors are coming to the rescue. Report after report also reveals the fact that Tremco hosts many of the meals and receptions for the AEPA meetings, which raises additional questions of conflicts-of-interest.

Tremco Given AEPA Approval to Provide Full Envelope Maintenance Services

"The Roofing Committee from the previous meeting of the unincorporated AEPA presented the request from WTI/Tremco to add additional items to their line items. A written request to include full envelope maintenance had been provided to the committee by WTI/Tremco."

What is a line item you ask? According to AEPA minutes, the price for a line item for a particular product provided by a vendor can be be changed and additional items can be added. A catalog item could not be changed. The bottom line for taxpayers is that line-item pricing was arbitrary. As we've read from previous minutes, there were absolutely no control measures to determine whether or not taxpayers were being gouged. This is the anti-thesis of what the AEPA and ESC's were designed for!

Secret Meeting Held Despite Warnings from Some Member States

According to the Revised Meeting Report dated July 30, 2007, a secret meeting took place regarding AEPA structure discussions.

"A motion was made and seconded to go into Executive Session to discuss the structure of AEPA. A roll call vote, as follows, indicated the motion passsed.

For: Connecticut, Kentucky, Minnesota, Nebraska, Texas, Virginia
Against: Iowa, Indiana, Missouri, New Mexico, North Dakota, Ohio, Oregon, Washington
Abstain: Colorado, Kansas, Michigan

Because the Executive Session was not to discuss personnel issues, potential litigation or other issues permitted by their state government the following members withdrew from the meeting and did not participate in the Executive Session: Iowa, Missouri, New Mexico, North Dakota, Ohio, Oregon, and Washington." [April 24, 2007]

My first question is why did Indiana participate in the secret meeting after voting against the secret session? It is a violation of Indiana law to discuss this type of business in secret. This item proves that the AEPA is a shady organization that begs for a full and complete investigation by the federal government. Indiana must sever ties with this organization immediately! Other states should also be concerned.

There's much more to report, but this should give readers and investigators enough of an idea that there's trouble in AEPA paradise. I hope this helps. I'll send the full-report upon completion. I have a few phone calls to make and interviews to conduct.

Saturday, April 11, 2009

Former Attorney General Requested State Board of Accounts Audit of ESC Bids Last Year

Maybe the former Attorney General deserves a little more credit than I was willing to give earlier. According to the March 14, 2008 board minutes for the Wabash Valley Educational Service Center, located in West Lafayette, Indiana, former Attorney General Steve Carter requested that the State Board of Accounts investigate and conduct an audit of Indiana's Educational Service Center bids.

This coincides with the time frame that taxpayers were meeting with high ranking state officials regarding ongoing complaints about the illegal bidding scheme that ESC's and school corporations were engaging in. It sounds like Steve Carter took our complaints more seriously than first thought. I can only wish he would have taken it more seriously four years ago since the scheme continued unabated for several years after he was first made aware of the situation.

The problem with the efforts in focusing on bidding at the state level, though, is that the investigation needs to focus largely on the national AEPA since that's where the roofing scheme originated and the so-called "bids" are let. These national meetings are held twice a year at varying places around the country. Our state has no jurisdiction over criminal activities that may be occuring in Nevada, or anyplace else where they are approving these so-called bids.

The investigation needs to start with the most recent allegations of bid rigging that occurred in Phoenix, Arizona. The state AEPA entities are pawns and accomplices in an elaborate scheme to rip off taxpayers. This is why we need a federal investigation as well as one at the state level. This scheme involves over 20 states and varying legal jurisdictions within those states. It's a tangled web that will require cooperation from many local, state, and federal government agencies, but since the big scheme involves potentially billions of tax dollars, it's an investigation that will be well worth the time, money, and effort.

Friday, April 3, 2009

ESC Board Minutes Contain False Information

I'm taking very personal a comment found in the Mach 12, 2008 board minutes for the NWIESC. Here's an excerpt from those minutes, and it contains false information about my husband. I have asked for a retraction and an apology.

"Information regarding Senate Bill 238 was distributed at the Board meeting. Senator Weatherwax introduced a bill that could have potentially ruined Service Center bids. He wanted the Service Centers to purchase off the Department of Administration's QPA bid if a supply item or a service were available there. [Sounds perfectly reasonable to me, but then again, these folks aren't interested in saving tax dollars; they're interested in collecting more of them.] The Directors and several member school corporations wrote letters to the Senate Education Committee in protest. [I'll be requesting copies of those letters!] At the second hearing, the Service Centers were allowed to speak and present some evidence that was contrary to what the committee had received from the wife of a roofer. [This is absolutely false!] When the committee found out the truth of what happened, they were somewhat embarrassed and did not vote for the bill." [History has proven this to be untrue, and a more potent version of Weatherwax's bill recently passed the Indiana Senate by a vote of 50-0! The only thing they're likely to be embarrassed about now is the fact they were hoodwinked by the schemers.]"

So, it appears as if the schemers have been telling lies about my husband for the obvious purpose of discrediting me and my message. You see, my husband is not in the roofing business, and he has never been in the roofing business. In fact, due to health issues, he's not even allowed to be on a roof! The lies these people tell to promote their cause is shameful!

The real question now is where did this lie originate? That remains to be seen, but it's no secret that Tremco was trying to dig up information on my husband even though he is not a party in this matter. My stat counter registers particular google searches whenever my site is visited, and my husband's name has appeared several times. The schemers obviously tried to find a connection in their desperate attempts to tie me to the roofing industry, which would imply that I had a financial interest in the outcome of the proposed legislation. In fact, Tremco's google searches have been very revealing. My interest in the matter has always remained the same. I am a worn-out taxpayer, and I've had enough of the tax waste and abuse.

Let me make it easy for the schemers. My husband and I are taxpayers. We have no connection to the roofing industry, financial or otherwise. But the fact that the schemers had to misrepresent the facts and flat out lie to a Senate Education Committee just shows me and others how desperate they are.

Educational Service Centers have lost crediblity because of this type of activity. It's time to dismantle an organization that is no longer needed.