WASHINGTON — The Department of Homeland Security came under renewed scrutiny Thursday as a House panel sought to determine how it awarded $25 million in contracts to a transportation company whose selection was recommended by Randy "Duke" Cunningham, the former San Diego-area congressman convicted of accepting millions of dollars in bribes from defense contractors.
After receiving bids from three companies, agency officials said, they chose Shirlington Limousine and Transportation Inc. of Washington, based on both price and the company's ability to perform the needed services.
But Rep. Peter T. King (R-N.Y.), chairman of the House Homeland Security Committee, noted that the company's president, Christopher Baker, had done business with Brent R. Wilkes, a San Diego defense contractor identified as an unindicted co-conspirator in the Cunningham case.
"Then we find out that the congressman at the center of all of this sends a letter on behalf of this limousine company," he said. "If that doesn't raise issues, if that isn't more than a series of coincidences, I don't know what is."
For The Record
Los Angeles Times Tuesday June 20, 2006 Home Edition Main News Part A Page 2 National Desk 2 inches; 63 words Type of Material: Correction
Limousine contract: An article Friday in Section A about a congressional hearing into the awarding of a Homeland Security contract to a limousine company recommended by former Rep. Randy "Duke" Cunningham said that the company, Shirlington Limousine & Transportation Co., had a history of financial problems, including bankruptcy. Shirlington's president, Christopher D. Baker, has filed for bankruptcy; the company has not done so.
Cunningham was the only member of Congress to support Shirlington's selection, King said.
The government is investigating allegations that Wilkes provided Cunningham, and perhaps other officials, with prostitutes and limousines. Citing an ongoing grand jury investigation, Baker did not testify Thursday.
Baker has a criminal record, including attempted robbery, auto theft and drug possession, and Shirlington has a history of bankruptcy and other financial problems. In 2002, the company lost a shuttle-bus contract with Howard University, which accused the company of low-quality service.
Homeland Security's chief procurement officer, Elaine Duke, said that her agency made a distinction between company owners and drivers, and that the drivers had undergone background checks. No such checks on the company or its owner were required by law.
"The drivers have a clean slate," she said.
But King called the situation a "disgrace."
"Almost everything that could have gone wrong did go wrong," he said. "It casts doubt over the whole department."
But Homeland Security was not the only agency feeling the heat at Thursday's hearing before the House Homeland Security subcommittee on management, integration and oversight.
Because the department was specifically seeking a small business for the contracted services, it sought a company that was "HUBZone approved" -- a program that falls under the jurisdiction of the Small Business Administration.
HUBZone is an SBA program that supports small businesses in poor communities by preventing large companies or those in more advantaged areas from competing with them.
Calvin Jenkins, the SBA's deputy to the associate deputy administrator, told the panel that his agency ensures that the company in question is a small business, is located in a historically underutilized region and has more than a third of its employees living in HUBZone areas.
Shirlington's office is in a luxury apartment building in Washington. It told the SBA that it had had an office in a hangar at Ronald Reagan Washington National Airport and that service in the building was suspended after the 2001 terrorist attacks.
Jenkins said SBA staff visited the office on April 7, 2004, ensured that the company met the criteria and approved it the next day.
Later that month, Homeland Security awarded Shirlington the first of two contracts.
The company began providing shuttle services and executive sedans for the department in spring 2004. Its first one-year contract was for $4 million. The second, a one-year contract with the option to extend for four additional years, totals $21.2 million for the full five years.
Homeland Security spokesman Larry Orluskie said the total went up because the need for services increased. The 2005 contract, he said, had to cover the cost for 10 limousine drivers and 12 mini-buses with a 16-person staff.
"That doesn't necessarily mean we're going to spend $21.2 million," Orluskie said. "They're not guaranteed that until the job is done.
"That selection was made based on their performance, not this controversy," he added.
In fact, Homeland Security recognized Shirlington Limo with a small-business achievement award last year for providing outstanding customer service.
Many in attendance at the hearing tried to stifle laughter after that statement. But in an interview, Orluskie said the service has been top-notch.
"I ride them all the time. The drivers are courteous, respectful, on time, and the vehicles are clean," he said.