By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
The subtle entity known as Cordoba Corporation used to thrive on bad publicity. Cordoba has bid for contracts as diverse as building demolition and subway construction, though lately it has been doing computer-programming work. Formerly located solely in Los Angeles, it now also lists offices in Irvine, Oakland and -- not surprisingly -- Sacramento. That‘s where Richard Alatorre -- close friend of Cordoba founder and CEO George Pla -- has held a $100,000-a-year seat on the state Workers’ Compensation Appeals Board seat since he retired from the City Council two years ago.
After Alatorre moved, little was heard of Cordoba. The firm had been much in the news for 10 years, mostly for complications involving its contracting with public agencies and its political clout. Cordoba, for instance, was a subcontractor on the since-fizzled $65 million MTA Metro East subway proposal; its 1996 acceptance was linked to strong Alatorre pressure. Cordoba was chosen (reportedly at the behest of then--Labor Secretary Ron Brown) over more-favored bidders to create a $3.2 million 1996 federal Minority Business Development Agency facility and, according to the MBDA‘s own report, wasted the money.
Cordoba similarly dealt with a 1991 minority-business tracking assignment with the city of Los Angeles. This $300,000 contract was snatched from a highly rated Bay Area consortium by a last-minute, Alatorre-engineered council action. In 1995, after numerous extensions promoted by Alatorre, the council declared this contract a total loss. City officials still don’t want to talk about it (calls to the City Attorney‘s Office were not returned); maybe they’re embarrassed that no redress was ever sought for the city‘s loss. By then, Cordoba also had been criticized for dubious work with the L.A. Unified School District and on emergency, no-bid cleanup contracts after the 1992 riots. Taxpayer dollars financed all of Cordoba’s failures.
But whatever its screwups, however it bombed, no Cordoba client sued the firm. Which may be why almost any journalistic description of Cordoba includes the adjective ”well-connected.“
Until this year, that is, when a major client sued Cordoba not just for non-performance but for fraud. According to supervising trial attorney William Simmons of the Oakland City Attorney‘s Office, ”no trial date is set“ for the $1.2 million action, and ”matters are still in the discovery stage.“ But the court papers tell a familiar story of promise and non-fulfillment. This plaintiff also claims, however, that Cordoba had no intention of lawfully completing its contract. Hence, the fraud allegation.
Now, this allegation tiptoes into a very mucky area of the firm’s affirmative-action past. Cordoba has mostly been what economists like to call a value-added firm. Such firms traditionally do things like adding milk to chocolate and selling the result as milk chocolate.
Cordoba, however, has no product line. Sometimes it lands a contract, alone or as part of a consortium, even though it, or the consortium, is not the low bidder (as in the Metro East, MBDA and minority-business agreements mentioned above). Then it often pays someone else to do the work. The added value -- the milk, as it were, in the Cordoba chocolate -- is its nominal minority status as a Latino firm, which satisfied various governmental fairness laws and policies. The profits seem to come from the difference between the contracted amount and what Cordoba pays a subcontractor. Cordoba also helps certain prominent Latino politicians (former state Senator Art Torres, for instance, presided over the MBDA disaster to the tune of $80,000 a year), which enhances its status in Democratic governing circles.
Oakland‘s hiring of Cordoba, according to the papers, started with the Silicon Valley business-software giant Oracle Corporation’s inclusion of the smaller firm in a larger 1997 Oakland data-conversion contract proposal. In early 1998, Oakland and Cordoba entered into their own agreement. In this contract, Cordoba, ”promised and affirmed that, among other things, it would convert data to an Oracle-readable format and create external interface files.“ The contract deadline was December 1998. This, according to the suit, Cordoba didn‘t do.
”Cordoba did not perform [nor] fulfill its obligations as specified in the February 1998 contract,“ the suit states, adding, ”prior to entering the [contract], Cordoba knew or should have known [it] could not perform as represented in the . . . agreement.“
Apparently under pressure to produce the converted data, Cordoba -- without telling the city -- subcontracted with another data firm, ASG, ”to perform all the data services Cordoba had agreed to provide.“ ASG, in turn, sub-subcontracted with the firms Winvision and Alphasoft to do the work, the suit states. The original contract specified Cordoba as the sole provider, barring permission from the city. The city alleges Cordoba provided no notice of the new arrangement..
Weeks before the contracted December 31 completion date, according to the suit, Oakland officials finally learned that Cordoba was not doing the work it had promised to do, but instead had subcontracted it. At roughly the same time, the officials also were told by ASG that Cordoba was not paying its own subcontractors. By December 30, 1998 (the day before contract deadline), the suit alleges, Cordoba had still not paid the subcontractors, whose employees then walked off the job ”because they had not been paid since August.“ The city ended up paying the subcontractors itself in order to get the work done.