JOE SANTOS KNEW A CONFRONTATION would be risky. For months, his boss had brushed off his concerns about possible waste on the federal earthquake-safety project that was supposed to be making hundreds of L.A.’s public school classrooms safer. But Santos didn’t want to be part of anything questionable — especially if he could get blamed.

The University of Southern California senior had answered a campus advertisement placed by Torres Construction, an Eagle Rock contractor with a long history of working for L.A. Unified School District. He had gone from part-time data-entry clerk to assistant project manager in three months, and by now had signed off on invoices totaling hundreds of thousands of dollars. But on the night of February 18, 2002, in his final conversation with his boss, Tomas Torres, he realized that he might be in over his head.

Santos, as he would later allege in a series of legal actions, pointed to a batch of what appeared to be padded invoices for strapping file cabinets, bookcases and other heavy objects to school walls. He refused to back down on his claims that the company was cheating on its share of the $10 million FEMA project. He felt a jolt of panic when, he alleges, Torres told him, “Just sign the invoices. They can’t catch us. If there’s a problem, we’ll blame the inspectors.” It suddenly dawned on Santos that if anything went down the wrong way, his name would be all over the damning evidence.

Later that night, Santos returned to the office, grabbed a pile of invoices and split for good. But his ordeal was just beginning. And though details of his late-night visit remain in dispute, what is clear is that eventually he learned a lesson no USC communications class could teach him: Get in the way of an alleged federal rip-off in Los Angeles, and you do so at your own risk.

From the start, paying a contractor millions of dollars to brace furniture to a wall using removable straps seemed a bit odd to Santos. But he needed a part-time job that wouldn’t interfere with his studies. A product of private Catholic schools, he was good with numbers. The $12-an-hour data-entry job seemed perfect, at first. With 360 schools and thousands of cabinets and bookcases and water heaters — which could be braced for up to $120 a pop — the numbers added up fast. Santos began to wonder how closely the work was being monitored.

His unannounced visits to schools confirmed his suspicions, which he detailed in lawsuits: Fly-by-night inspections and hodgepodge floor plans made keeping track of the work nearly impossible. Not that allegations of inadequate work, untrained workers and his company’s tendency to inflate bills seemed to matter. The school district’s inspector was cozy with Santos’ boss, and seemingly more interested in long lunches and Lakers tickets than in checking classrooms for earthquake safety. The whole project looked like a wasteful enterprise on par with that notorious boondoggle, the Army’s $1,500 toilet seats.

Over the next five years, Santos would find out just how hard it is to pierce the layers of bureaucracy that surround such a boondoggle. Particularly when the federal government and the nation’s second-largest school district fail to uncover evidence of wrongdoing, teachers unintentionally tamper with evidence by moving furniture around in the very classrooms in need of safety upgrades, and local police and the district attorney are willing to turn the tables and go after a whistleblower.

TORRES CONSTRUCTION’S RELATIONSHIP WITH L.A. Unified always seemed strange to Santos. Now 26, he’s trying to make sense of it all. Santos cuts a striking figure in his black suit with open-collar shirt and square-toed shoes. Occasionally, he flashes a broad smile that shows off his awkward good looks. Left fatherless at age 13, he grew up in Glendale as the de facto man of the house, looking out for his sister and mother. Still without a degree, he owns a limo company, and has had to borrow money from his mother.

Santos felt like an outsider at Torres Construction, a family business owned by Timoteo Torres. Torres’ son Tomas runs the company. Torres’ daughter Martha is in charge of accounting. Torres’ other sons, Ismael and Esteban, also work for the company. The work force varies by project, but the most consistent employees are family, and friends of family.

For years, the company’s main client has been L.A. Unified. Santos says Torres Construction took an unusual path to winning the lucrative contract. After the Northridge earthquake of 1994, FEMA doled out $168 million to L.A. Unified to repair hundreds of schools across the district; $10 million of that went to the peculiar task of strapping heavy objects to walls, known as seismic bracing. Though a competitor bid lower to brace refrigerators, water heaters and TV monitors, Torres Construction radically undercut them on a single item: file cabinets. Whereas the contract paid up to $20 per file cabinet, Torres agreed to brace them for $8.95 each. Santos couldn’t help but notice that L.A. Unified listed more than 23,000 file cabinets — twice as many as any other item — and that file cabinets were weighted higher than almost any other item.


For a company that had no seismic-bracing experience, the expertly crafted bid seemed uncanny to Santos. But, as reflected in court papers, he said nothing at the time about his suspicions that Torres might have a source inside L.A. Unified helping him out. Despite his reservations, he quickly won the praises of his boss for designing a spreadsheet to streamline the billing process — a key development for a company in a hurry to bill the school district, Santos says. Within three months, Tomas Torres made Santos an assistant project manager, at $58,000 a year. It was a lot of responsibility for a young man in his early 20s.

As expert as the company was at winning the contract, and as eager as it was to submit invoices to the school district, Santos alleges in court papers that he found it to be lacking in expertise and integrity when it came to the job itself. After he started going out on-site as a project manager, he noticed that the floor plans of the schools did not match up with the rooms where work crews supposedly braced objects. He observed workers drilling holes in dry wall instead of a stud, attaching straps to the dry wall with toggle bolts that could easily be ripped out, and puffing up the numbers for items they braced. Some workers told him they had been instructed by his boss to bill for file cabinets under a different category — anything but a file cabinet — since the company had submitted a below-cost bid on those items. For the strapping down of water heaters, an item on which Torres Construction bid the maximum price — $120 — the instructions were to bill the school district whether workers had braced them or not, he alleges.

Santos was not alone in his suspicions. Daniel Hurt, now an undergraduate student majoring in sociology at UCLA, worked the summer of 2002 for Torres Construction and gave Santos a sworn statement about job conditions. “I had trouble taking the job seriously,” says Hurt, who was 20 at the time. “Sometimes I would go through the room after workers were finished and there would be items left unbraced. I know [my boss] inflated the numbers. If the inspector showed up, my boss would lead him into certain rooms to verify the number of straps, then the inspector would check off the entire school. That was shady.” Another former employee, Robert Duran, now a custodian for the city of L.A., stated in an affidavit that the whole project seemed like a waste of money — for the government. Getting paid was all that mattered, he alleges, having helped move Torres Construction into “newer and much nicer offices” after the project ended, and observing Torres family members driving new cars and a new motorcycle. “We were always hurrying, and the bosses kept a point system. If you didn’t have enough points, you got fired. People were always losing their jobs.”

One inspector was not so compliant. Juan Penaherrera, then with Orgel Construction Management, a contractor with L.A. Unified, was a stickler. According to Penaherrera, who approved final invoices, he was transferred to another project after Torres Construction complained to the school district that he was too strict. Penaherrera told the L.A. Weekly he rejected at least eight requests for payment during his one year on the project. “In my opinion, [Torres] was not submitting accurate numbers on the amount of work. If they billed for 50 bookcases” — at $20 per bookcase — “I’d inspect and find they braced just 40,” he says. Penaherrera, in corroborating one of Santos’ more troubling allegations, says he also found workers drilling into walls containing lead and asbestos without dampening them first, allowing contaminated dust to build up in classrooms. The company didn’t keep a copy of job specifications on site, as required by the contract, he says. He later cooperated with a federal probe that went nowhere, after investigators relied upon random school inspections, a review of bills and the inconclusive findings of L.A. Unified bureaucrats to reach a verdict of no wrongdoing. “The problem with the project was, when we tried to inspect, straps had been cut or removed and the objects had been shifted around by teachers or students. The contractor used that as an excuse. L.A. Unified is a giant creature. Lots of things can happen,” says Penaherrera, who told federal investigators that his replacement was less stringent and would often make excuses for Torres.


Carl Logan, who replaced Penaherrera, seemed familiar with Torres Construction. Logan would attend Lakers games with Tomas Torres, and sometimes the two would eat at the Pacific Dining Car. Once, during an extended lunch break, Santos went with Torres and Logan to a used-car dealership where Logan knew the dealer, and, Santos contends, where Torres bought a used car. When asked about that transaction in his deposition, Torres replied, “I didn’t even get a good deal.” Hurt observed similar coziness, which would correspond with a lack of rigor on Logan’s part. “I’d overhear Tomas on the phone making dinner plans with Carl,” he says. “Carl seemed intrigued with the possibility of some benefit, and he took Tomas’ word that the job was being done well. Personally, dinner wouldn’t be enough for me to sign off on schools without inspecting the work.” Penaherrera says the perception was widespread: “Logan was too close to Torres.” Logan did not return the Weekly’s calls for comment.

Eventually, Santos started going to job sites at night, when work was being done because school was in session. Asked why he didn’t quit at the first sign of trouble, he replies, “I tried to get them to do things right. I put controls on the billing system, hoping it would lead to better-quality work. But my boss kept telling me, don’t worry; Carl [Logan] is the inspector.”

Conflicting stories surround the night of February 18, 2002, when Santos says he confronted Tomas Torres. In court documents, Torres Construction claims that Santos and Tomas Torres argued all right, but about whether Santos was controlling the invoices too much and slowing down business. The company also claims that Santos used his creation of the billing database as a means to demand his unusually high salary. “Essentially, it was blackmail,” says Mark Feldman, attorney for the Torres family.

Some time after midnight, after letting himself in the office with his key, Santos penned a resignation letter and left it there with his company cell phone. He took 1,800 pages of invoices and, according to Torres Construction, allegedly removed a billing program from the company computers. The next morning, Tomas Torres called the police. A week later, Timoteo Torres sued Santos in Los Angeles Superior Court for trespassing and fraud. Santos countersued for wrongful firing and alleged fraud by Torres Construction.

Both suits were dismissed, and Santos eventually returned the invoices. A few months later, on August 23, 2002, Santos filed a federal whistleblower suit under seal in U.S. District Court. Feeling that the school district didn’t care, he eagerly waited for his day in court to bare details of what he saw as a case of wrongdoing that put the safety of schoolchildren at risk. But that was far from the end of it. More than two years later, on December 2, 2004, District Attorney Steve Cooley’s office filed criminal charges against Santos. “You’d think the D.A. would be more concerned about what went on with that project,” he says.

WHILE IT’S COMMON FOR THE D.A.’S OFFICE to take its time filing criminal charges, especially when a civil case is pending, the more-than-two-year delay smacked of retribution. With Santos’ back to the wall, a key issue in the criminal case would center on what exactly he removed from the computer on his final visit to the office.

According to court records, the day after Santos’ last conversation with Torres, on February 19, 2002, a computer expert named David Chernobieff, hired by Torres, visited the company’s offices. Chernobieff analyzed the computers for several days and found a “remnant of a database” on the main hard drive, which was on Santos’ computer. More than a week later, on March 1, 2002, LAPD Detective Reinaldo Velez, a certified computer examiner, took custody of and analyzed the hard drive of Santos’ computer. He couldn’t find any data in Santos’ old database. Velez noted the computer had been used in the days since Santos’ departure, but despite signs of tainted evidence, his testimony at a preliminary hearing was damaging: “I was not able to find the database that I was told sat there the day before.”

Then Torres Construction provided documentation to show that it took 40 employees more than 2,000 hours to re-create data Santos allegedly destroyed. In interviews with federal investigators, Tomas Torres could not cite any credible motive for Santos to take such action, yet things did not look good for the college senior. Suddenly his education being placed on hold was the least of his worries. To make matters worse, Santos’ lawyer at the time, Deputy Public Defender Denise Daniels, advised him to plead guilty to commercial burglary, grand theft and theft of trade secrets. This meant jail time. Feeling abandoned, he looked for a private lawyer to fight for him.


As it turned out, his new lawyer and the prosecutor weren’t eager to try the case. In one of the more unusual interviews for this story, the prosecutor, Deputy D.A. Jonathan Fairtlough, and Santos’ criminal defense lawyer, Robert Bernstein, discussed the case last January in the cafeteria of the Criminal Courts Building. It soon became clear that Fairtlough did not have answers for certain weaknesses in the case. For instance, he could not justify a 10-day delay before Detective Velez took custody of the computer that Santos allegedly wiped clean. Nor could he explain why Chernobieff failed to make a copy of Santos’ hard drive as it existed on the morning of February 19, 2002. Bernstein also pointed out that Chernobieff altered the hard drive. These flaws would make it hard, if not impossible, to prove the computer-theft case against Santos. Fairtlough appeared stymied. Two weeks later, he offered a plea bargain. On January 23, Santos pleaded no contest to commercial burglary for taking invoices from Torres Construction. The felony computer-theft charges were dropped. He was sentenced to three years’ probation and 90 days of electronic monitoring. Like most classic plea bargains, this one allowed both sides to claim victory.

THE WEEKLY REVIEWED the safety-inspection files of more than a dozen elementary, middle and high schools. The overall scorecard at those schools, with a few exceptions, ranked from poor to fair. Even after the $10 million in federal funds had been spent for seismic bracing — about $4 million of which went to Torres Construction — more than half the campuses reviewed showed deficiencies during routine inspections from 2002 to 2006.

But, in the end, none of the problems could be pinned on Torres Construction or anyone.

Phillip Moriel, with the Inspector General’s Office at the school district, investigated Santos’ allegations and says he could not tell if Torres Construction’s work was done right. Moriel’s boss, Robert Williams, does not offer much more. “It doesn’t appear we did much on this investigation. There was not much we could do. There was a box of stuff. It was inconclusive. State law precludes me from giving you all the facts.”

Similarly, L.A. Unified’s General Counsel’s Office declined to comment on allegations of fraud. Alfred Rodas, with the Inspector General’s internal-audits group, said that because the case involves federal funds, the person to talk to would be Michael Eugene, head of business services, who reports to schools Superintendent Roy Romer. But neither Romer nor Eugene returned the Weekly’s calls for comment.

FEMA was hardly more determined to get to the bottom of things. Despite requests by the Weekly for interviews and comment, the behemoth federal agency showed little interest in the matter. Recently, the agency disclosed a copy of a 2004 report by the Department of Homeland Security Office of Inspector General. The report consists of random site inspections at seven schools, a comparison of bills submitted by Torres Construction to invoices approved by L.A. Unified, and about six interviews, including one with Tomas Torres, who referred federal investigators to LAPD Detective Velez. The report concludes that Torres Construction may have overbilled, that this wasn’t intentional, that teachers had moved objects around and that the school district was satisfied with the work.

“The public needs to have confidence in us,” says Bruce Kendall, head of facilities at L.A. Unified, who has been under fire for a general lack of an earthquake-readiness plan for schools districtwide. “It’s the responsibility of principals to see that equipment is properly braced. In every case, has that happened? I’m not going to make that guarantee. But we can’t hold a contractor responsible if equipment has been moved. It’s a safety issue for the individual schools.” Of the relationship between Tomas Torres and Carl Logan, Kendall says, “We want to ensure that our construction managers are working on behalf of the district. It’s [project manager] Kim Kennedy’s job to monitor that.”

In fact, Kennedy was the district official whom Santos first told of his concerns over the project. But she would not respond to questions from the Weekly about how she handled Santos’ allegations. Instead, she said she kept track of work “day by day.”

One school-district official who remains concerned is Angelo Bellomo, head of environmental health and safety. Bellomo has developed a database for school inspections that tracks safety problems and efforts to correct them. With the district building 150 new schools — and a $19 billion construction budget that has contractors like Torres Construction salivating — some 800 existing school buildings will be exposed as lacking, says Bellomo. He does not agree with the suggestion that individual schools bear the responsibility for safety lapses. Yet his efforts to document problems through routine inspections have been resisted by L.A. Unified. “I’ll take safety compliance any way I can get it,” Bellomo says. “But people are afraid of documenting what’s wrong, on the theory it’s going to result in liability exposure.”


According to Bellomo, school-safety inspectors have found 1,600 objects that were not properly braced since 2001, the year the FEMA-funded program began. Those objects could range from a fish tank to a piece of heavy furniture to a water heater to a rack for storing acid. “My gut feeling is we are finding [deficiencies] repeatedly,” he says. More than half the problems are likely unresolved, he adds, or the fix has not been documented. “And just because an inspection does not document a problem, it doesn’t mean there isn’t one. It comes down to resources.”

SO, AFTER THE L.A. UNIFIED AND FEMA investigations, and after years of Santos’ wrangling in federal and state court, what exactly came of the USC student’s ordeal?

Last month, Santos reached a meager $130,000 settlement with Torres Construction. It awaits the approval of the U.S. Attorney’s Office, and would end his federal lawsuit.

As for Torres Construction, the company continues to do the bulk of its business with L.A. Unified.

There remains a tool chest full of unanswered questions and allegations. Consider the views of one of Torres Construction’s competitors. Michael Essrig is the president of Safe-T-Proof, a company that also bid on the seismic-bracing work. L.A. Unified realized the workload was too much for one company and gave Safe-T-Proof a good deal of assignments. But in contrast to the friendly relationship described between Tomas Torres and L.A. Unified inspector Carl Logan, Essrig, whose company specializes in earthquake safety, says inspectors “watched my crews like hawks.”

Essrig recalls offering Joe Santos a job at one point. He says Santos complained that Torres Construction violated prevailing wage laws. Workers told L.A. Unified investigators that Torres altered their pay stubs, that they worked overtime but were paid regular rates. One worker stated that his pay was $16.41 per hour, but that “if an inspector asked, to tell them I made $29.27 per hour.” Another employee stated that Tomas Torres forced him to sign a “wage-clarification agreement” releasing any claims against the company for the payment of inadequate wages. “One of the reasons we signed was because he threatened to have [us taken] to jail,” the worker wrote.

In sizing up the bracing operation, Essrig steers clear of direct comment on Torres Construction. But he’s not shy about his views on L.A. Unified’s handling of the grant: “The whole thing was a big rip-off. Why? Because L.A. Unified got that FEMA money for free, right?”

Santos, for his part, says that the settlement money just might enable him to finish college — once he pays his lawyers. Still, his foray into the world of contracting in Los Angeles has left him cold: “I thought the whole thing was about making schools safe for kids.”

LA Weekly