Mayor Bloomberg's School-Snack Bungle
Public health has always been Mike Bloomberg's strong suit, and last week, he pressed ahead with his latest initiative: new vending machines offering healthy snacks and low-calorie drinks in city schools. This is good policy, especially for obese-prone kids, and Bloomberg's team presented it as another instance of the good government New Yorkers have come to know and expect from their mayor.
After taking these bows, Bloomberg's people promptly handed the new multimillion-dollar vending contracts to a pair of nonunion firms that offer no benefits to their workers. The contract to provide snack machines went to a company that's been found to have violated state labor laws by underpaying its employees.
Answer Vending, a Westchester-based firm, was ordered in June 2008 by the State Department of Labor to ante up $116,000. This included penalties and back pay to 21 employees it was found to have shortchanged. Answer executives didn't respond to questions last week, but Labor Department spokeswoman Michelle Duffy said the fines are still outstanding: "They haven't paid."
The Labor Department probe was launched after organizers from a Teamsters local in Queens contacted workers at Answer to see if they were interested in joining the union. "They were interested, but they were terrified of losing their jobs," said Sandy Pope, president of Local 805.
What the workers did tell organizers was that they often had to work 50- and 60-hour weeks, without overtime, and that wages were often paid partly in cash. They received no benefits, they said. The organizing drive stalled, Pope said, after employers warned workers that they didn't want a union in the shop. Since the union couldn't help the workers, it turned its findings over to state labor investigators.
In contrast, the Teamsters succeeded three years ago in organizing another firm called Canteen Vending Services, which is owned by the Compass Group, a national corporation. Employees there won a contract providing a retirement plan, health benefits, and higher pay. Canteen also bid for the new schools vending initiative but was rejected in the last round. The reason? "Their bid was lower," said a spokesman for the city's Department of Education. "The others offered greater revenue to the schools."
"Of course they did," responded Pope when told of this rationale. "They don't have to pay decent wages and benefits."
As for Answer's labor-law violations and outstanding penalties, the Education Department said it knew nothing about them until informed by the Voice. This is strange because in order to qualify for the contract, Answer had to fill out an official 20-page background questionnaire and then sign it, swearing that everything in it was nothing but the truth. Question number 12 on the form asks if any fines or penalties "have been assessed by any government agency." Question number 15 asks about any investigations.
"They did not disclose it," said department spokesman Will Havemann. "We need more information to determine whether Answer should have done so. If any action is warranted we will follow up appropriately."
Mike Bloomberg's argument for being elected to this third term that he always said he didn't want is that he represents progress and competence. But progress, Bloomberg-style, comes only on his terms: In this case, it's keen attention to the eating habits of school kids, and a deaf ear to the health needs of workers.
Even though Bloomberg has garnered many major union endorsements (including that of the largest Teamster locals), most of these represent a simple exchange of political favors: union backing in exchange for City Hall's help with their specific concerns. Bloomberg has steadfastly refused to say where he stands on organized labor's biggest demand, the Employee Free Choice Act, which is still stalled in Congress and which would allow unions to organize shops by signing up a majority of members without employer intimidation. Bloomberg has told labor leaders who have endorsed him that he's against the bill, but doesn't want to say so publicly.
"If we had that law on the books, we could organize those shops in a week," said Pope about the failed drive at Answer Vending and CC Vending, a Bronx-based firm that won the beverage machines contract.
Then there's the mayor's competence claim. This is supposed to be his strongest asset. But even this relatively easy lift—installing vending machines in city schools—has steadily tripped up the multibillionaire businessman.
Bloomberg has been drenching the airwaves with attack ads blaming his Democratic opponent, comptroller Bill Thompson, for every past educational misdeed. But one of the things that Thompson indisputably got right was his critique of Bloomberg's bungled maneuver to put vending machines offering Snapple drink products in the city schools.
This was back in 2003, and it was the first big face-off between Thompson and Bloomberg. Thompson issued a scathing audit showing that Bloomberg's team had awarded the contract to Snapple without even sending a letter of invitation to other major firms who had to learn about this major opportunity through the business grapevine. Snapple, the audit showed, had been tapped for the job by a private marketing consultant named Octagon that had a bit of a conflict of interest since it already carried Snapple's parent company as a client. After other bids were received, Snapple alone was allowed to sweeten its offer.
Bloomberg dismissed these complaints as the old way of thinking: "Political red tape," he said then. What was important, he insisted, was that Snapple would provide a guaranteed minimum of $40 million over five years to help pay for school activities.
Fast-forward to last month, when the Bloomberg people were revving up media interest in the new healthy vending plan. As they broached this wonderful idea, they also quietly let drop that the Snapple deal had fallen short by at least $5 million, and that the city was ending its contract with the beverage company.
Another mayor in another time—back when newspapers cared more about the business of government—might have suffered a few bad press days after this kind of embarrassing flub. Bloomberg has no such fears. The news was relegated to one line in one paper, and that was that.
Last month, Education Department officials informed the Panel for Educational Policy, which, under the new state law, must approve school contracts over $1 million, that it was retaining Octagon again for the new vending initiative. Mayoral appointees control the panel, and the lucrative new Octagon deal was quickly rubberstamped. But dissident members got a chance to air their gripes. "We're paying them 15 to 18 percent of the contract, and it's not even clear what they're doing," said Patrick Sullivan, a public school parent who is Manhattan Borough President Scott Stringer's representative to the panel and who voted against Octagon. "There was no assessment of their prior performance."
Like the Snapple deal, the new one is similarly muddled, and not just because an award went to a firm that may have covered up a state investigation. Education officials admitted last week that the formal contract authorization request that they submitted to the panel described the only unionized firm, Canteen Vending, as offering the highest guarantees for revenue to be paid to the schools. Canteen was rejected, the report stated, only because its "vending machine operation/monitoring systems are inferior to the competitors."
The department's spokesman said this was "a misprint." Wasn't this a pretty long and involved sentence for a misprint? "I have no idea what that's about," he said. And the statement that the losing bidder made the highest offer? That was a mistake, too.
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