Contractor wears 2 hats on jobs for L.A. Unified

The Los Angeles Unified School District allows one of its highest-ranking construction managers to run a side business supplying consultants to the $20-billion school-building program and, in some cases, to act as the prime watchdog over the accuracy of the hours they bill.

In one case, records show that Bassam Raslan, L.A. Unified regional director of construction, repeatedly signed timecards for one staffer from his private firm, TBI Associates, after the consultant’s direct supervisor said he refused because he believed they were padded.

Raslan is a co-owner of the 5-year-old company, which makes a profit providing consultants to the school district at an average rate of $124 per hour, records show.

One of those consultants, Stephen Cole, was chronically absent from his primary job site on days during which he claimed to be working, according to district records. Cole’s billings for the months Raslan signed his timecards exceeded $81,000.

Raslan, who bills $202 an hour to manage at least 21 employees working on dozens of new schools, said repeatedly in a short interview that he followed all district policies and procedures. He would not address the specific allegations, saying he could not discuss personnel issues, nor would he respond to questions about TBI.

Guy Mehula, L.A. Unified’s chief facilities executive, said he was aware that Raslan oversees TBI employees but that he was not concerned about possible conflicts because two district employees process consultants’ invoices. He said he would look into whether Raslan’s supervision of his own employees posed a conflict.

He was surprised when a reporter told him about the allegations of bill-padding.

“Fraudulent billing is certainly something that we wouldn’t tolerate,” Mehula said. But, he added, “Bassam Raslan is an excellent manager, and he knows the job pretty well.”

The district’s office of inspector general is reviewing the situation, according to a former employee who was recently interviewed.

The school district, the nation’s second-largest, has a school construction program that is perhaps the largest ongoing public works project in the United States. It has so far built 65 campuses and modernized 51 others.

To supervise the work, the district relies on consultants for about 70% of its construction management staff, saying the arrangement allows the school system to attract higher-quality employees and provides the flexibility to more quickly increase and reduce their numbers as needed.

As a result, timecards are often signed by other consultants rather than district staff, according to a manager who reviews the invoices. He said that’s because only those on the job site would know who was showing up and when.

Unique position

Mehula said Raslan is the only consultant he knows of who both works for the district and owns a company that supplies staff to the construction program.

In March, the district was billed nearly $500,000 for 25 consultants with Raslan’s company, records show. Of those, nine work under Raslan. In a five-month period ending in March, he approved the timecards of five of them, records show.

The district’s Contractor Code of Conduct forbids consultants from approving bills submitted by their companies’ employees and from making decisions in which they have a financial stake. It also prohibits situations “that would be reasonably known to create or lead to a perception of self-dealing.”

Raslan, 49, approved Cole’s timecards for three months, certifying his hours on 23 days when records show Cole was absent from the job site.

In a brief telephone interview, Cole said those absences were of “no consequence at all” because he at times had to work in the downtown district office to use the computer. He refused to elaborate and declined to comment further regarding his billings.

Cole was hired to physically supervise the construction of a much-delayed and over-budget project, the multipurpose room at Mount Washington Elementary School, beginning in October. He said a second assignment, overseeing the demolition at a site of a future San Fernando Valley high school, took little of his time.

Mount Washington is “a construction job. I was here 90% of the time and 10% on the other project,” Cole said before the grand opening of the addition last month.

Every construction job is assigned an inspector who keeps a daily journal of the work performed, problems that arise and workers at the job site.

The Mount Washington inspector’s log, a meticulous color-coded diary, seldom noted Cole’s presence five days a week. He appeared six days in February and seven in March, an average of less than twice a week.

Leon Joseph, Cole’s former supervisor who no longer works on district projects, said in an interview that he refused to sign Cole’s timecards because he believed they were fraudulent and that Cole took them to Raslan, Joseph’s supervisor, for signature.

“It was upsetting because this is against the ethics rules for the company that I represented in the program,” said Joseph, who worked as a consultant for Parsons Corp. as a senior project manager overseeing a number of L.A. Unified school construction jobs.

He said Cole was assigned to the field and rarely showed up in the downtown office, where Joseph worked.

Raslan signed Cole’s timecards in December 2006, January 2007 and March 2007. TBI and the firms through which it bills submitted them to the district for payment at $166 an hour, for a total of more than $81,000.

There are 23 days during those months in which Cole claimed to have worked on the Mount Washington job at least part of the day when the inspector’s log does not indicate his presence. The hourly billings for the job surpass $16,000.

On Dec. 26, 2006, for example, the inspector noted that Joseph and Raslan were on the site, but not Cole. He billed the maximum eight hours of work that day, and Raslan certified the tally.

Joseph said it was obvious to him that Cole was not working more than three days a week, requiring Joseph to solve problems that came up.

Joseph said he repeatedly told Timothy Milstead, a colleague who works for the district, that Cole was billing for hours he did not work.

He said Milstead, a senior project manager, suggested that he report the matter to Raslan. Milstead confirmed that Joseph called the matter to his attention months ago.

“Mr. Raslan informed me that it wasn’t my concern,” Joseph said. “Some people do their job in four hours, some people do it in 12.”

He said that Raslan ordered him to continue to sign Cole’s timecards and that he did so for February’s work.

“I basically had no one to report the situation to,” Joseph said. “He was my direct supervisor.”

Joseph said Raslan forced him out of the district last month by offering him a lower-paying job, which he refused to accept.

The school district’s office of inspector general looked into allegations of falsified timecards by a TBI senior project manager in 2005, records show; that report is confidential.

Last month, Joseph said, he was interviewed by a school district investigator. Joseph said he told the investigator that he thought Cole’s billings were fraudulent.

Inspector Gen. Jerry Thornton did not return a call seeking comment.

The district pays the companies hourly rates for the consultants’ work, which includes a profit for the companies. Cole’s actual pay is unknown, but it would be less than the $166 an hour the district pays.

According to the Bureau of Labor Statistics’ most recent figures, construction managers in the Long Beach-Los Angeles-Glendale area were paid an average of $44.24 an hour.

A job listing posted on the Internet by Lee & Ro Inc. for a construction manager with 15 to 25 years’ experience lists a salary range of $46.15 to $60.09 an hour.

In court documents relating to dueling lawsuits among TBI founders, one of them, Ivan Kesian, described the firm this way: “TBI is essentially a ‘body shop,’ an employee leasing company, a ‘temp’ company, providing personnel to the Los Angeles Unified School District. That has been its entire business since its inception. The person hired works full time for the LAUSD, reporting directly to LAUSD.”

The partners, who at the time were low-level construction managers, made their wives shareholders so they could “front the company” and allow it to qualify as a woman-owned business, Kesian said in a deposition. In public works, he said, there is usually an advantage for a women’s business enterprise or a disadvantaged business.

TBI immediately entered into contracts as subcontractors to larger firms that provide construction management staff to the district, according to the lawsuits.

‘Hugely profitable’

TBI was “hugely profitable,” Kesian said, using newspaper ads, word of mouth and the Internet job website monster.com to find candidates for open positions.

By 2004, Raslan and business partner Tarek “Rick” Hijazi each took home more than $320,000 in wages from L.A. Unified. Hijazi said in a court declaration that he and his wife made $326,875 more that year from consultant fees for other TBI employees and that Raslan and his wife made $260,586 more.

In a deposition, Raslan said he was supervising TBI workers at the district as early as 2002. He also said the district seeks and relies on his input when hiring TBI job candidates.

When one is being considered, “they come in and talk to the principals of the company about the candidate, how good the candidate is, what is our recommendation, would he be basically a good person just to work with,” Raslan said.

“We provide our input to the hiring manager,” he added. “And because of our credibility with LAUSD, because of our hard work with LAUSD, because of our efforts with LAUSD ... LAUSD looks at our recommendations in a very serious way.”

evelyn.larrubia@latimes.com