El Paso Charity Contractor Restructures and Sues Former Chief
After a newspaper exposé and an FBI raid, a nonprofit strives to regain qualification for federal JWOD contracts to companies that employ severely disabled people.
The El Paso Times reports that the National Center for Employment of the Disabled (EIN 74-2544266 Form 990) has renamed itself Ready One Industries and is suing its former head Bob Jones for $30 million in what it says is excessive compensation and unauthorized personal spending. A management company controlled by Mr. Jones received $4 million a year during his tenure.
Ready One is, or was, the largest contractor in the Javits-Wagner-O'Day program, which specifies that federal contracts should go to companies that employ severely disabled workers. Ready One is a huge operation, with the 2004 Form 990 showing $192 million in federal grant income. The organization makes boxes and chemical warfare suits. Clicking "hybrid" on the Google map shows the size of the facility.
The operation was featured in an exposé by the Oregonian newspaper earlier this year (we talked about in the post "Lax Oversight in Disabilities Program Yields Major Abuses." And we talked about the FBI raid "FBI Raids Contractor in Disabilities Program." Although it is the major JWOD contractor, severely disabled people constitute only about nine percent of the work force, rather than the required seventy-five percent.
Subsequently, the company brought in former El Paso mayor Joe Wardy as CEO. The old NCED was reorganized by splitting it into two nonprofit corporations, with Ready One to handle the JWOD contract work. Hiring the mayor makes sense, as Ready One is a major employer in El Paso, and the recovery from this scandal will require a politician's skill as much as a manager's. Wardy is receiving $25,000 a month for his service.
As we have seen in other charities, Mr. Jones was brought in to turn around the nearly bankrupt company in 1995. He accomplished that and much more, but also compensated himself too generously for it.
NISH (EIN 52-1007153 Form 990), one of the organizations that certifies nonprofits for the JWOD program, has been working with the Ready One on a formula that would allow it to continue with its federal contracts. The renaming and reorganization are part of that plan. NISH itself is no small organization, with $62 million in federal grant income and a staff of 290. CEO E. Robert Chamberlin has a salary of $286,376.
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