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County won't investigate 3 minority-owned firms

Thursday, April 14, 2005
Daily Herald
by Jonathan Lipman

Cook County's top contract official has no plans to investigate three companies in the county's minority-owned business program despite Chicago's accusations the companies lied about who owns and runs the firms.

But contract compliance administrator Betty Hancock Perry said she will investigate Faustech Industries, which she didn't know until Wednesday was ruled a fraud by a federal judge four years ago.

The county's program is designed to give a boost to firms run by women and minorities by giving them special access to county contracts.

"We have not seen any reason to follow through with what the city is doing," Hancock Perry said.

The county's program went under the microscope Wednesday at a meeting of the contract compliance committee, the panel's first meeting since 1997.

Chairwoman Bobbie Steele (D-Chicago) called the meeting after the county began investigating Crucial Communications, a minority-owned firm that has a phone contract with the county. Media reports revealed the woman listed as the chief operating officer has been dead for more than a year.

Some county commissioners are pushing for an outside audit of all 900 companies the county certifies as minority-owned. One proposal calls for the certification process to be taken out of Hancock Perry's hands and given to an outside firm.

"People are afraid to talk about this," Commissioner Mike Quigley (D-Chicago) said. "The deal with Crucial ought to be enough for anyone to say ... we ought to be concerned."

Chicago officials have been reviewing every company in the city's program after a string of frauds were exposed. They said last month Chicago United Industries was not a legitimate minority business because it was really a broker, selling items to the city at marked-up prices after buying them elsewhere.

The county has no plans to investigate Chicago United. Hancock Perry insisted the county's standards were as high as the city's.

"All vendors (in the program) are charged with being and doing legitimate business," Hancock Perry said. "Do you think we just say, 'OK, go out there and pretend that you're doing something?' No, we do not. ... The rules apply the same."

Problems with Faustech first arose in 1999, when it won part of a $49 million county contract for hospital equipment. The company is owned by Faust Villazan, a Hispanic man who has donated to and golfed with county commissioners

A competitor sued and U.S. Magistrate Judge Geraldine Soat Brown threw out Faustech's deal in 2001. The judge ruled Faustech didn't really do anything in the deal, and that prime contractor Siemens Medical Systems picked Faustech as a partner only because Villazan had political connections to county commissioners.

Earlier this year, County Board President John Stroger acknowledged federal investigators were probing the deal and have subpoenaed some county officials.

Officials with Chicago's procurement department booted Faustech from the city's minority business program Monday and barred the company from doing business with the city for three years. Department spokeswoman Breelyn Pete said officials visited the company Oct. 28 and discovered the company was also acting as a broker.

 

 



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