Dirty Laundry

How our government screws itself, everyone else, and the disabled

by Tom Adkins
03/01/04

Did you know a government has created a special organization that competes against American companies, pays its workers third-world wages, and primarily used blind and disabled people? And this government also gives undisclosed interest-free loans and fat cash grants to this agency, who then crushes small American companies by engineering no-bid contracts. And they often charge up to four times as much for the same services. With their bloated bank accounts, they pay their directors and CEOs ungodly salaries, who then invite buddies into their organization, grant them special insider-contracts, monster salaries, and huge Enron-style parties, complete with giant feasts and world-class entertainers.

Got your attention?

When the American companies go out of business, the jobless victims are often women and minorities. There’s no oversight or monitoring of this scam. It’s all in secret. Most galling? The US taxpayer picks up the entire tab.

Is it those dastardly Chinese? Those clever Indians? Maybe those new Eastern European capitalists? Hah! They wish they were so diabolical. The answer should come as no surprise. It’s the United States government.

What is this program? It’s called “JWOD", acronym for the Javits Wagner O’Day Act, a federal program originally intended to create jobs for blind and severely disabled. It has morphed into a money-sucking scheme with the apparent purpose of decimating the private sector by creating a federal monopoly that lines the pockets of fat cat administrators while ripping off disabled workers and the US taxpayer in one fell swoop.

Here’s how it works. Certain government contracts, particularly cleaning or laundering, were once bid to the private sector. Today, JWOD programs dictate the long list of tasks they can perform and the terms, and government agencies are bound to use them instead of comparison shopping with the private sector. Private American companies are forced out of business.

But it gets worse.

Investigators have discovered the costs for JWOD services are often four to five times higher than the market.

So, if the wages are low and the prices are high, where’s all the money going?

Oh, here’s where it gets deep. Charities have presidents, vice-presidents, board of directors, sub-directors, Associate Directors, assistant sub-advisor-to-the-president…you know the story. A long list of useless pencil-pushers who collect a salary for doing nothing. Except in many cases, these do-nothing moochers represent or outright own companies who get handed fat contracts by fellow board members.

You’d think some folks want to get to the bottom of this. Private businesses who get the shaft sure do. Some blind and disabled folks probably do. And you can bet the IRS wants to know. But they can’t. By law, the program isn’t allowed to be investigated.

Oh, they’ve tried. They had hearings in the 80s. House reps predictably left skid marks down the Capitol corridors. But tenacious Baltimore Sun reporter Jay Hancock sniffed around the Baltimore non-profit “The Chimes,” asking how the charity took in $3.25 million, then lavished three of its executives with $2.44 million. Hancock revealed The Chimes also parlayed fat contract money to insider board members, but refused to disclose the relationship. The IRS is now interested.

The Chimes is not an exception; they are the rule. After all, a $1.2 billion program servicing 36,000 disabled means each worker should be getting over $33,000 a year. Unfortunately, the program is a virtual invitation for unscrupulous “charities” to defraud the government. Worse, these charities engage in literally dangerous practices. Model-Star Services in Danville, Illinois, provides linen cleaning services for local industries such as restaurants, nursing homes and hospitals, routinely fighting JWOD contract arrangements. In congressional testimony in front of the House Small Business Committee. Model-Star’s Lou O’Brien cited a local VA hospital that was forced to contract out its laundry services to a local JWOD charity that could not handle blood soiled linen.

Exactly how pervasive is the JWOD problem? The list of government agencies forced to use JWOD contracts is incredibly varied. Barksdale Air Force Base, Louisiana. The IRS, Fresno, California. GSA Region 3 (Philadelphia). United States Courthouse, Islip, New York. Missoula Fire Technology Center, excluding Highway 10, Missouri. US Geological Survey, Gainesville, Florida. US Forest Service, Warren, Ohio. US Border Patrol Station, Yuma, Arizona. US Army Reserve Center, Weirton, West Virginia. There’s even a few “UNKNOWN” destinations, for good measure.

A total of 2,901 agencies, altogether.

In a time when outsourcing has become a dirty word, the US government has created a rude slap in the face of the American entrepreneur, complete with a giant feedback loop of expenses, simultaneously screwing the taxpayer and the disabled worker. All to the tune of a cool $1.2 billion dollars. In secret. That’s a lot of dirty laundry. And when there’s that much money floating around, you know somebody’s cleaning up.