Whitewashed? UVA investigating bribery allegations
Did a local painting contractor bribe a UVA official in order to win business? Two documents that were part of an unrelated federal trial have touched off a wave of allegations at the University of Virginia, which is investigating the matter.
The scandal revolves around John Sandalis, former owner of Dalis Painting, who was convicted of tax evasion in 2000 and sentenced to 26 months in prison for failing to report income in 1994 and 1995 totaling almost $393,000. (His wife, Michelle, was sentenced to 12 months, and their appeal was denied in 2002.)
Buried among the evidence at their trial were documents suggesting that UVA contracts manager L.T. "Spike" Weeks had been the beneficiary of Sandalis' largesse– and still kept his job.
The alleged scandal was first aired in January by the Cavalier Daily. In April, the student paper issued a blistering editorial calling for the heads of managers in the UVA Facilities Management department who took a "lax attitude" toward alleged corruption. The April 24 editorial, entitled "Facilities mis-management," also blasted the department for allowing "the atmosphere of favoritism."
Evidence in the IRS case includes a July 30, 1992, receipt for a TV for "S. Weeks," purchased with a check from Dalis Painting, as well as a $300 money order made out to Weeks from Sandalis on December 21, 1992.
The Hook was unable to contact Sandalis, who is supposed to go to prison in December, according to the U.S. District Court clerk's office, and Weeks referred an inquiry to university spokesperson Carol Wood.
However, documents from the IRS prosecution of Sandalis provide additional information. After his conviction, Sandalis appealed for a new trial, claiming juror bias because one of the jurors was a UVA employee who worked at the UVA Miller Center's Faulkner House while it was being painted by Dalis Painting. Sandalis claimed the juror, Elizabeth Braswell, had complained about his company's work.
Sandalis called in several of his employees to testify in a hearing requesting a new trial as well as UVA employee Weeks, who, according to court records, testified that Braswell was a "chronic complainer."
At the hearing, Weeks was asked if he had any personal financial dealings with Sandalis. Weeks replied that he hadn't.
"The Court is now aware of significant evidence that Mr. Weeks had had personal financial dealings with the defendant John Sandalis," writes Justice Department prosecutor John Hinton in an October 11, 2001, brief opposing the motion for a new trial.
In May 1997, Sandalis told IRS Special Agent John Pierce that the Western Union money order for $300 was to pay off a wager between Weeks and Imad Saleh, a Dalis employee, and that Weeks had a bet going with another Dalis employee, according to the brief.
"It should go without saying that a public contract officer should not accept personal benefits such as a $300 gambling payoff from a private contractor whose work he oversees," writes Hinton. "Such conduct is unseemly at best. It undercuts any suggestion Mr. Weeks is neutral."
Sandalis hired hotshot attorney Peter White, who regularly appears as a legal analyst on NBC, CNN, and CBS, from the prestigious Richmond law firm Hunton & Williams, to handle his appeal. White fired back with a brief claiming the government was attempting to "dirty up" witnesses.
White refutes the prosecution's claim that "S. Weeks" picked up the TV in 1992, saying that John Sandalis didn't move to Charlottesville until 1994. However, in another interview documented in the case file, Sandalis says he's done business with UVA since 1990.
Contract managers are supposed to avoid even the appearance of impropriety. According to the Commonwealth of Virginia Purchasing Manual for Institutions of Higher Education and Their Vendors, buyers employed by the state are forbidden from accepting cash or gifts with more than nominal value. The Code of Virginia deems violations a Class 1 misdemeanor and provides that upon conviction the procurement official "shall forfeit his employment."
Ed Kirby wouldn't object to that.
Kirby, owner of Rainbow Painting, says he's been shut out of UVA jobs because of the alleged climate of cronyism.
He's filed complaints of unfair treatment and favoritism, and claims he was fired from a job at Maury Hall last year because of the allegedly cozy relationship between Weeks and Sandalis. He accuses university employees of changing logs documenting his work and blaming him for a fire. After he lost the job, Dalis Painting came in and finished the work, according to Kirby, whose research may have touched off the current investigation.
In a November 15, 2002, letter to Eric Denby, director of procurement services, Kirby complains that Weeks and another purchasing employee "were out to get me because I was messing up their 'honey hole'...," Kirby demanded $200,000 for breach of contract and slander.
Kirby also accuses UVA of using a vendor who'd been convicted of income tax evasion Sandalis– and of using contractors who didn't have certificates for lead and asbestos removal.
Denby responds in a December 3, 2002, letter: "I have thoroughly reviewed the contents of [your] letter and have concluded that your allegations are mistaken, without basis, or false."
In January, the Cavalier Daily quoted Denby as saying he had not investigated the matter and had no previous knowledge of it. Denby referred The Hook to UVA spokesperson Wood.
An unnamed source told the Cavalier Daily that the university investigated alleged improprieties by Sandalis involving facilities management staff sometime between 1995 and 1997, and that the Sandalis tax evasion investigation started with a contractor complaint.
Purchasing ethics stress avoiding the appearance of impropriety, says Annette Kirk at the National Association of Educational Buyers, and chief UVA facilities officer Robert Dillman told the Cavalier Daily in January that procurement officials cannot have a relationship with contractors outside of work.
Besides the gambling charges, Weeks allegedly was spotted socializing with Sandalis at Awful Arthur's. "I saw Spike he looks like ZZ Top with that long hair and beard with my own eyes," says Kirby.
Sandalis confirmed that he occasionally socialized with Weeks at Awful Arthur's in a May 1, 1997, IRS memo. He said Weeks had been in his home on one occasion when Sandalis was doing renovations, and once to leave a key.
Sandalis also told IRS agents and prosecutors that he "never sought to influence anyone at UVA," pointing out that bids were approved by a "six-member university board."
Caught in the crossfire over the controversy about the Sandalis-Weeks relationship are the new owners of Dalis Painting. John Flevarakis and his brother bought the company in August 2002. "I was blindsided," says Flevarakis' wife, Julie, who moved here in March to help run the company.
She says they were unaware of Sandalis' conviction for income tax evasion, and since they have invested "everything we have" in the company, she 's worried about being unfairly smeared with Sandalis' alleged misdeeds. "We are not connected with the former owner," she declares. "We're running the business legally."
John Flevarakis ran his family's successful contracting business in northern Virginia for 10 years, and he says that paying bribes is not the way he does business.
And he questions how Sandalis could have influenced buyers at UVA because different buyers handle different projects. "That's ridiculous," he says. "There's no way you could give money to one buyer."
He also points out that the paperwork he receives for UVA is pretty explicit about not buying gifts or doing favors for buyers. "You can't even buy them lunch or anything," he says.
Wood says Weeks still holds his job and that the internal investigation by university auditor Barbara Deily is ongoing. Kirby complains that Deily has never contacted him, even though he's filed many complaints and sent information to her.
"I kind of feel like a rape victim," Kirby says.
"Our thinking is we need to let the investigation come to full closure and let them work," says Wood.
Flevarakis used to answer the phone with "Dalis Painting. This is John." Now he adds "Flevarakis" to distance his company from John Sandalis.