Minority contract set-aside program exploited

Ambrose Oliver was strapped for cash and in need of a break when his girlfriend offered a suggestion: Move from his home in Arizona to Maryland, go into business with her uncle and his associates, and make a fortune going after minority set-aside contracts.

The Navajo tribe member, a disabled veteran who was 40 at the time, liked the idea of being on the ground floor of a new business, so he agreed to be the president of Navajo Contractors and began signing his name to corporate documents.

Three years later, Mr. Oliver is back on the Navajo reservation, still stinging from the disappointment of plans gone awry. He said the men with whom he went into business used his name, his status as an American Indian, even his signature to pursue work from which he never profited and in some instances of which he had no knowledge.

The firm that handled the regulatory paperwork was called Capitol Structures Management Inc. (CSMI) — and its operating officers are principals in a relatively unknown firm called Veterans Services Corp. (VSC) that last year became a 51 percent partner in the $38 million D.C. Lottery contract.

That contract, and VSC’s role in obtaining it, are now the subject of an investigation by the District of Columbia’s office of inspector general into whether the minority-owned company misrepresented its business status.

Based in Falls Church, Va., CSMI’s president, Russell Wodiska, until recently was executive vice president of VSC. VSC’s president, Emmanuel S. Bailey, is an executive vice president of CSMI and a close associate of Mr. Wodiska, who also serves as an appointed planning commissioner in Falls Church.

CSMI’s website says its mission is to “empower small business minority contractors by offering superior business resources that enable them to perform at the highest level.”

But Mr. Oliver said CSMI’s principals relegated him to a $7-an-hour job at a liquor store owned by his girlfriend’s uncle, a man named Vic Guido, when he began asking too many questions about the operation. By the time his ordeal was over, he said, he was getting by on Spam and Ramen noodles while raising an 11-year-old child on his own.

When Mr. Oliver went to the authorities, he said, they were not interested in his plight.

He said the events he witnessed, and to some degree participated, left him with a bad taste for the world of so-called “minority contracting.”

“I began to realize they were exploiting me,” Mr. Oliver said, explaining his decision to return to the Navajo reservation, where he is trying to rebuild his life. “I didn’t go out there to be a liquor-store cashier. I had a job already. I had gone out there to do what they had told me, which was to learn about that business.”

An extensive chain of e-mails between Mr. Oliver and Mr. Wodiska and Mr. Guido, obtained by The Washington Times, shows that Mr. Oliver apparently had little control over his own company.

In early 2007, Mr. Oliver traveled to Falls Church to meet with Mr. Wodiska and Mr. Guido. Back in Arizona, he received an e-mail from Mr. Wodiska that stated: “I am going to initially give you lots of documents to look at and complete. Other than your personal info., I will take care of the rest. … We need you to begin to think about your Personal and Economic Disadvantage Statement. This statement must CLEARLY show how your status as a Native American has DIRECTLY held you back.”

Corporate papers filed with the state of Maryland name Mr. Oliver as the president and sole director of Navajo Contractors Inc., located at a residential property owned by Mr. Guido in Owings, Md.

Mr. Wodiska sent Mr. Oliver numerous forms to complete and sign, including a statement of personal history for the Small Business Administration, which confers preferred status on disadvantaged firms under Section 8(a) of the SBA Act.

He also sent Mr. Oliver a cell phone with a Maryland number.

“Once we get the incorporation papers, I will open a bank account, get a corporate credit card, purchase a web address, order a fax number, logo, stationery, etc,” Mr. Wodiska wrote to Mr. Oliver on April 5, 2007.

Meanwhile, Mr. Oliver planned to take a business class at a community college but had trouble paying for it and ordering the textbook, which was $111.75, used.

“Not to worry,” Mr. Wodiska wrote. “I will take care of paying for the class. The sooner you let me know about the books, the easier it is to order online and get them to you.”

When Mr. Oliver was unsure how to complete Internal Revenue Service Form 2553 — Election of a Small Business Corporation — Mr. Wodiska reassured him: “Don’t worry. … I have filled out over 6 of these forms, and you are filing it correctly.”

By May 2007, Navajo Contractors was up and running. “Over the next month, I will be looking to run some contracts through Navajo so that we can apply ASAP for the program,” Mr. Wodiska wrote.

A month later, Mr. Oliver wrote to Mr. Wodiska to ask, “How’s it going? Any new information on Navajo Contractors Inc.?”

“I have hired an executive at my company that is starting on Monday,” Mr. Wodiska replied. “His first assignment is to generate contracts for Navajo. Once we get approx $100K worth of jobs complete, then we will apply to the [8(a)] program.”

Mr. Wodiska had other plans for Mr. Oliver. “Ambrose, you told me when we met that you were a service-disabled vet,” he wrote in late June 2007. “Can you tell me a little more about your injury?”

Mr. Wodiska set up an account in Mr. Oliver’s name at M&T Bank, e-mails and bank documents show. On July 18, 2007, Mr. Wodiska wrote to Mr. Oliver and asked for his signature on a check and to leave the amount blank. “Also, please send me five more blank checks with your signature just in case we need them,” he wrote. “I will keep them under lock and key and do not plan on using them.”

With financial assistance from Mr. Wodiska, Mr. Oliver arrived in Virginia to join his new business partners in September 2007. He and his 11-year-old child stayed at Mr. Guido’s house in Maryland. As a first order of business, Mr. Wodiska instructed him how to apply for “SDV business” — that is, other contracts set aside for service-disabled veterans.

But Navajo Contractors was already generating business.

By the fall of 2007, CSMI had landed some minor government contracts that were insured by Navajo Contractors but completed by other companies, such as Wilson Technologies, a company that Mr. Bailey joined that year. Mr. Oliver observed that Mr. Bailey and Mr. Wodiska were “thick” with each other.

“Mr. Bailey was always with Russell [Wodiska], complimenting him and such,” Mr. Oliver said, adding that Mr. Bailey “told me I was worth a lot of money.”

Asked about his and Mr. Bailey’s roles in CSMI and VSC, Mr. Wodiska told The Times in an e-mail only that “Mr. Bailey was not involved in any aspect of Navajo Contractors’ prior business relationship with CSMI.”

Neither Mr. Guido nor an attorney for Mr. Bailey returned calls or e-mails seeking comment.

The corporate profile for Navajo Contractors shows that Wilson Technologies completed three contracts from September 2007 to December 2007, totaling about $47,000.

A copy of a check dated March 11, 2008, from Wilson Technologies to Navajo Contractors, “Attn: Russell Wodiska,” is made out for $33,657.

“This was all under CSMI or Russell Wodiska’s direction,” Mr. Oliver said last week in a telephone interview.

Mr. Oliver said he knew nothing about another check, from Navajo Contractors to Vic Guido in the amount of $5,225. “I only had knowledge of two checks in that series,” Mr. Oliver told The Times. “The rest of them was Russell’s doing. They made it sound good, but I realized I was getting the shaft.

“The more questions I asked, the more I was pushed back,” he said.

For Mr. Oliver, the misery was just beginning. He was given a cashier’s job in Mr. Guido’s liquor store and relocated, along with his 11-year-old, to an apartment above the store.

By March 2008, Mr. Oliver had had enough.

“Do not make any further transactions in my name with this Navajo Contractors Inc.,” he wrote to Mr. Wodiska on March 21, 2008. “Do not use the rubber stamp with my name on it anymore. Im leaving and want to stop the whole Navajo business. I would like all information pertaining to what business you conducted in my name and any further information regarding my personal information that is associated with this Navajo business returned to me. I do not know what was done. I want everything stopped.”

Mr. Wodiska complied and blamed Navajo’s failures on the down economy.

“The biggest problem was that over the last six months the gov’t was simply not spending,” he wrote. “I can assure you that I worked very hard on this company, but Navajo never added any value to any transaction, so inserting them in a tight market was consistently difficult.”

In 2009, Mr. Oliver, whose company never completed its certification status, complained to the SBA’s office of the inspector general in Philadelphia and the U.S. attorney’s office in Baltimore. But he said the only response he received was that he should have conducted more research before signing any documents.

It’s unclear whether the arrangement violated any laws. A spokeswoman for the U.S. attorney’s office in Baltimore said that using minority-front companies to defraud the federal government is illegal and that the office has filed a number of cases in recent years.

“That should have been raising red flags all over the place,” Stuart Shalloway, a spokesman for the SBA, said about the arrangements between Mr. Oliver and Mr. Wodiska. He referred The Times’ inquiries to the agency’s office of inspector general, which does not confirm or deny investigations, said Glenn P. Harris, counsel to the inspector general.

CSMI went on to expand its portfolio of “clients” to include companies such as Sympora Construction. VSC, with Mr. Wodiska and Mr. Bailey at the helm, went on to win a 51 percent equity share in the D.C. Lottery contract.

Mr. Bailey also is the chief operating officer of Sympora.

The Times recently reported that Sympora and VSC listed 10 of the same federal contracts on their respective corporate profiles, and that two of those contracts were performed not by either company, but by another firm, Marco Enterprises.

When The Times began calling federal agencies to confirm the information, VSC took down its profile from the website.

Shortly after the report appeared in The Times, Mr. Wodiska’s name also disappeared from VSC’s website.