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The Code of Cordoba

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.

In January of last year, the city told Cordoba it had breached its contract and must now supply a detailed plan on how it would complete the work. Cordoba responded by demanding more money beyond the agreed price and an extended completion deadline.

The city replied in February by declaring the original contract to be breached and demanding that Cordoba return all the $1,173,120 so far paid on the contract -- which was most of the $1,248,000 total payment in the original agreement. Cordoba declined to do so. A year later, the city sued, accusing Cordoba of fraud.

The action filed by the Oakland City Attorney’s Office makes a straightforward demand for the same $1,173,120 requested in its 1999 breach-of-contract notice. It also seeks unnamed punitive damages and legal costs. But what else it asks for could cost Cordoba far more: Oakland‘s action demands that Cordoba be henceforth enjoined from ever again making ”false and misleading statements“ that it possesses ”the capacity, resources, qualifications and ability to consult regarding, and implement program management, information systems and technology services, infrastructure planning and development and data conversion.“ Or, in other words, Cordoba could no longer claim to being able to do the sort of work it now advertises for in a variety of trade journals and elsewhere.

Cordoba officials in its Los Angeles and Bay Area offices didn’t return calls seeking comment on the Oakland matter. But in fairness, everyone who has employed Cordoba hasn‘t had the problems that the LAUSD, the Department of Labor, and the cities of Los Angeles and Oakland did. The AQMD, according to its Web site, contracted data services with Cordoba for at least three years, to the tune of more than $300,000, without complaints. But with all the bad press it has had, you have to wonder how the firm still manages to snag prestigious clients (not to mention such reputable co-contractors as Oracle). Should the firm actually be enjoined from advertising its services, you wonder how it could stay in business.

Hotels Meet First Amendment

The affluent backers of Santa Monica Proposition KK -- the measure that claims to enhance local wages but really forbids local living-wage ordinances -- have spent fortunes in advertising, mailing and media campaigns.

Regardless, nearly everyone who speaks on the matter at City Council meetings opposes the ploy to keep down wages at the city’s costliest hotels.

So the hotels‘ shill group, Santa Monicans for a Living Wage, has tried threats. A September 28 letter to Mayor Ken Genser from the organization’s ”Treasurer and Campaign Counsel“ asserts that letting ”City property . . . be used to make campaign speeches“ subjects officials to criminal penalties.

If such protests were really illegal, of course, hundreds of California city officials would be arrested several times a year.

It turns out the treasurer and campaign counsel of Santa Monicans for a Living Wage is Jim Sutton, of the highly Republican firm of Nielsen, Merksamer, Parrinello, Mueller & Naylor. As a ”Santa Monican,“ Sutton must have quite a commute; according to his letterhead, he practices law in Marin County‘s Mill Valley.


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