in Houston, Texas
Owner of company implicated in HISD E-Rate ethics probe denies giving gifts to employees
Friday, Aug 13, 2010, 02:22PM CST
By Lynn Walsh

Cell phones, playoff sporting tickets, trinkets and thousands of dollars in personal checks -- all allegedly given to Houston Independent School District employees by federal technology program vendors that had a multi-million dollar contract with the Houston district -- but the owner of one company says he had nothing to do with it.

Frank Trifilio, head of the now-defunct Analytical Computer Services, said he and his company never gave gifts to HISD employees, beyond an occasional fast-food lunch, and sought to distance himself from one-time business partners in an interview with Texas Watchdog. Trifilio, of Houston, said HISD confused Analytical with his subcontractors in the federal E-Rate program and that his company was the scapegoat in an investigation that resulted in his being banned from doing business with the district.

From 2005 to 2008, Trifilio and his business partners allegedly showered gifts including cash, meals and fishing trips on employees managing E-Rate, an HISD memo detailed by Texas Watchdog last month. Analytical provided $45 million in technology services between July 2005 and June 2009, a district contracts database shows. A federal lawsuit stemming from the improper gifts was settled by the district this year, and HISD has strengthened its ethics policy for E-Rate employees and board members.

Trifilio said he’s also suffered consequences.

“I lost everything, including my family,” Trifilio said. “I went through all of my savings just to get lawyers in Washington to defend me. I had to lay off 200 employees because the company went bankrupt.”

present

Trifilio said ACS, which was the umbrella organization for other technology vendors also implicated in the ethics probe, stopped operating in January 2007.

Analytical Computer Services “gave cellphones to approximately 26 district employees at one time or another from approximately August 2002 to February 2007,” according to the district memo penned by an outside law firm for HISD.

“I never provided phones for anyone at HISD,” Trifilio said. When asked if it is possible that one of his 200 employees could have, he expressed disbelief: “No, I sign off on all of the bills. I would have seen something like that.”

Trifilio said HISD confused his company with subcontractors Acclaim Professional Services, owned by Larry Lehmann, and Micro Systems Enterprises, where Frankie Wong was president. Wong is in prison for his role in a bribery scandal involving the Dallas Independent School District.

“We were the scapegoat” in the controversy because of confusion over vendor identification numbers, Trifilio said. Micro Systems and Acclaim took on some of the contracted work because the district believed the volume was too much for one company to handle, Trifilio said.

“In the E-Rate program, you cannot split up vendor numbers for projects, so HISD put in my SPIN number and my name,” he said. “Our number was being used, but we were not doing the business.”

E-Rate obtain the numbers from the Universal Service Administrative Company, which under the direction of the FCC administers the E-Rate program, said Richard Patton, HISD’s E-Rate compliance official. Patton said he was not aware of any limitations on the vendor ID numbers like what Trifilio described.

“I became the umbrella organization because ACS was the only company with a SPIN number,” Trifilio said. “We (Micro Systems) were archenemies. The relationship was nothing but a title.”

Professional basketball suite tickets appear to be the most valuable of the gifts that HISD lawyers found came from Trifilio’s company. Then-Superintendent Abelardo Saavedra “and a guest attended three Houston Rockets playoff games in the Analytical Computer Services Inc. ('ACS') suite in 2005,” apparently NBA playoff games 3, 4 and 6 against the Dallas Mavericks in the playoffs’ first round.

In an earlier interview with Texas Watchdog, Saavedra said he was invited to the games by HISD trustees, took his wife, but didn’t realize it was a vendor’s suite. He said he subsequently sent Trifilio a check for $300 to cover the costs.

Trifilio said he cashed the check, which was accompanied by “a very nice letter.”

Trifilio said the suite at the Toyota Center belonged to him and ACS but downplayed the appearance of a cozy relationship between his company and the district.

“The suites were mine,” Trifilio said. “Trustees were probably invited by a general manager.  There were as many ACS employees there as there were board members.”

Other allegations outlined in the memorandum include gifts from ACS of fanny packs and koozies, or foamlike beverage containers, to HISD. Trifilio denies that ACS ever provided such items unless HISD employees picked them up at a convention.

Why would HISD employees and trustees attend a basketball game at an E-rate vendor’s suite?

Trifilio said the fact that board members were there is irrelevant because “the board members have zero influence in us getting any E-Rate contracts. The procurement is done on a lower level.” Board members vote on contracts or sign off on them after they are approved by district staff, depending on their value.

Trifilio said Analytical and district staff had a “camaraderie” with each other, which led to some district employees also attending games in the company suite.

“We had people (at HISD) all the time, at least eight people there, 40 hours a week,” Trifilio said. “They became friends with people over there. They had their own badges. They felt as if they were employees at HISD.”

Trifilio said when his company took HISD employees out to lunch, which he said happened a handful of times, the conversation was focused on current work.

“We didn’t talk about upcoming bids,” he said.

Former district technology employees William L. Edwards, Steve K. Kim and Laura M. Palmer were the primary recipients of the gifts and meals, the memo from HISD firm Bracewell & Guiliani said. Their names were closely guarded by the school district for years and were only released after a Texas Watchdog public information request that the district challenged to the attorney general’s office.

According to the memo, Edwards and Palmer accepted a ride on Wong’s fishing boat, the “Sir Veza” --- the same name of a $305,000, 46-foot yacht connected to the E-Rate scandal in Dallas. Dallas ISD’s technology chief, Ruben B. Bohuchot, is in a federal prison in Fort Worth after being found guilty in the bribery and money laundering scheme.

Wong created a company to maintain the “Sir Veza,” according to the Justice Department.

“We worked together, but we hated each other with a passion,” Trifilio said, even though he mentioned he had taken his sons fishing on the boat. “We did north side,  they did south side and that is that.”

Trifilio cooperated with the grand jury in the Dallas investigation, even though there was no information he could contribute, he said.

Trifilio said he had not talked to Lehmann. Texas Watchdog has attempted to contact Lehmann multiple times but has been unable to reach him.

Trifilio said he owns a rehab and renovation company.

“I am 65 years old, and I am cleaning toilets,” he said, adding that he works alone.

“No more subcontractors."

Contact Lynn Walsh at at 713-228-2850 or lynn@texaswatchdog.org. Follow news about the Houston Independent School District on Twitter, #HISD.

Photo of a gift by flickr user judsond, used via a Creative Commons license.

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