Cracking a conspiracy costing taxpayers untold sums, the Los Angeles County Sheriff's Department has arrested one of its administrators and an independent food contractor on bribery charges involving millions of dollars in padded contracts for jail food, authorities said.
A 15-month investigation--triggered by a series in The Times in late 1996--uncovered a pattern of corruption spanning at least two years, officials said.
At the center of the alleged scheme to manipulate contracts was the No. 2 official in the Sheriff's Department's $20-million food operation--civilian employee Fredrick Gaio. In interviews with The Times, investigators said that, despite indications of earlier problems, Gaio's alleged wrongdoing went undetected because of serious lapses in management and oversight of food operations in the nation's largest jail system.
Authorities said they managed to trace more than $9,000 in alleged bribes from food contractor Rick Hodgin to Gaio but that they suspect far more money changed hands. Gaio allegedly received lease payments for a car and an all-expenses paid trip to Las Vegas--complete with limousine and gambling money--to steer county business to Hodgin and his food-vendor clients.
"I'm sure there are a lot of things we will never prove, never find," said Sgt. John A. Nemeth of the Sheriff's Department Internal Criminal Investigations Bureau. "It's a den of thieves, this food service business."
The bribery scandal comes at a time when the sheriff's custody operation is under fire on several fronts, providing likely fodder for those seeking to unseat Sheriff Sherman Block in his bid this year for a fifth term.
Last week, for example, the department was hit with allegations that its deputies provoked assaults on suspected child molesters, possibly leading to the death of one inmate, a matter that is under investigation.
Jail officials also have been criticized for providing inadequate medical care and for keeping some inmates in custody too long because of paperwork snafus, costing the public tens of thousands of dollars in legal settlements.
Block has scheduled a news conference for today to discuss the food-operation probe, conducted by the Sheriff's Department with the assistance of criminal investigators from the county's auditor-controller's office.
Gaio, 52, and Hodgin, 41, both of Long Beach, were arrested Friday.
Gaio, who has worked in the sheriff's food services division for more than 15 years, remained in custody Sunday night, unable to post $45,000 bail, authorities said. He has been on administrative leave, with pay, since November, when search warrants were first served at his home. As of today, he will be suspended without pay, pending the outcome of the criminal case.
Hodgin is free on $30,000 bail. Neither of the two men, nor their attorneys, could be reached for comment.
According to investigators, Hodgin allegedly paid the bribes beginning in 1995 while working for a Florida-based company called Joy Food Service Inc., which at the time was receiving millions of dollars in food contracts from the jail. When Hodgin later became director of sales for the Lancaster-based Harvest Farms, that firm suddenly corralled much of the lucrative business.
After being taken into custody, Hodgin conceded that "he knew it was wrong, the whole premise of paying a county employee" but that "I felt like I needed to help Fred out, kind of like a fatherly thing," according to Nemeth, who arrested him.
Although Hodgin denied that he expected anything in return for the money, "he never would come out and say what it was for," Nemeth said, adding that Gaio invoked his right against self-incrimination when questioned.
According to authorities, the two men subverted the purchasing process in a variety of ways, all intended to ensure that Hodgin's clients would retain a grip on contracts and profit handsomely--with the interests of taxpayers taking a back seat.
Many Ways to Circumvent Process
Among other things, contract specifications were tailored to ensure that only Hodgin's clients would land business, authorities said.
Gaio also allegedly circumvented bidding requirements by falsely declaring that an "emergency" existed for such items as turkey and cookies so that Hodgin could supply the goods without competition and at higher prices.
With the business in hand, vendors sometimes would substitute lesser-quality products for the higher-priced items specified in their contracts, a practice that investigators believe Gaio sanctioned.
On other occasions, authorities said, vendors represented by Hodgin would ship more food than agreed upon and Gaio would authorize the additional costs.
While taxpayers were victimized by the scheme, sheriff's officials said that Gaio and Hodgin made sure their own interests were served. Hodgin, they said, collected considerable commissions and Gaio was able to feed an alleged gambling problem that was consuming his $50,000 annual salary.
