NASSAU COUNTY OFFICE OF THE INSPECTOR GENERAL, Contract Review Report Jodi Franzese Contract # B-5-20 (B-17-19 ped Date Issued: ue 2020 ) “Good government is everybody's business” Origin of Review: E&A Restoration Inc. (E&A) is the vendor selected by the Nassau County Department of Public Works (DPW) to be awarded the Family & Matrimonial Court Phase II contract (Contract ID# B90632-02G). The Nassau County Office of Inspector General (OIG) conducted a review of the contract package and vendor disclosure forms submitted by E&A in seeking that award. OIG also interviewed E&A owner, Kalliopi Vournou (Vournou), her daughter Jenny Sakalis (Sakalis), her son Antonios Vournou (Antonios), as well as ‘Nassau County employees and E&A’s business references. Results of OIG Review: OIG found evidence, as detailed below, that E&A has two de facto officers/principals that it failed to list in its disclosure documents. Sakalis admitted to being Chief Financial Officer. Antonios’ role in E&A is apparently that of an officer in charge of the day-to-day ‘operations of the company. Both of these undisclosed principals failed to provide principal questionnaire forms to the County. OIG Document review disclosure forms submitted to the County by E&A in connection with the instant indicate that Vournou is the President and sole owner of E&A. The forms, as affirm there are no other officers at the company. Vendor disclosure forms d to the County by E&A in 2017 and 2018, in connection with earlier contracts, ffirm there are no other officers at the company. filings in New York City’s PASSPort (formerly Vendex) system in September 2017 that the company had three principals: (appearing as “Anthony”). The “Role” of Sakalis and / as Officer, and the Current Position of each was Owners Representative, respectively. The ‘on file with New York City.Ly OFFICE OF THE INSPECTOR GENERAL, Contract Review Report Jodi Franzese Contract # B-5-20 (B-17-19) Inspector Date Issued: February 7, 2020 "Good government Is everybody's business” OIG Interviews OIG interviewed individuals listed by E&A as references on its disclosure forms, as well as DPW staff assigned to oversee E&A contracts. Every individual interviewed identified ‘Antonios as either the owner or co-owner of E&A. None described dealing with Vournou. One interviewee related that when he contacted E&A to get an estimate for certain work, it was Antonios who assigned E&A’s head estimator to prepare the proposal. Another interviewee noted that Anthony (Antonios) is the “A” in B&A. OIG interviewed Sakalis at B&A headquarters. Upon arriving, OIG staff indicated to an E&A employee that they wanted to speak with the “boss.” Sakalis appeared and identified herself as the “boss” and indicated that her title was “CFO.” CFO is the standard business abbreviation for Chief Financial Officer. From her answers, OIG’s impression was that Sakalis appeared to be handling the fiscal and administrative operations of E&A. OIG also found that Sakalis listed herself in her LinkedIn social media account as E&A’s Chief Financial Officer. In addition, OIG found that Sakalis has a listing on the International Association of Women’s website where, under the heading “ABOUT ME,” she stated, “My name is Jenny Sakalis. My professional title is Chief Financial Officer at E&A Restoration Inc., which specializes in Construction.” Further, in the Blue Book juilding & Construction Network, under the heading “Owners, Principals & Senior .” B&A’s listing reflects Jenny Sakalis as “CFO.” A typical definition of Chief Officer is the senior executive responsible for managing the financial actions of OIG that she completed all of the disclosure forms E&A submitted to the ournou signed them. Sakalis stated that she did not think she should the vendor’s disclosure form (as an officer) because CFO is not a . claimed that Antonios does not have a title, and then stated that he » not make the day-to-day decisions at E&A but makes the by Antonios and Sakalis. She claimed that Vournou firing employees but does not sign checks.NASSAU COUNTY OFFICE OF THE INSPECTOR GENERAL : Contract Review Report Jodi pee Contract # B-5-20 (B-17-19) Gee Date Issued: February 7, 2020 “Good government I everybody's business” When interviewed by the OIG, Antonios stated that he does not have a title at E&A but generally oversees E&A’s field work. He stated that everyone who works in the field reports to him, and then he “take{s] it up to” Vournou. E&A’s project manager for the Police Academy project reports to Antonios, or to another person who reports to Antonios. Contract negotiations are handled by Antonios or the project manager. Antonios said that he and Sakalis speak to Vournou every day, although Vournou does not come to the office every day. Antonios asserted there was one instance, concerning bidding on a job, when Vournou overruled him on a decision. OIG reviewed the minutes of a Low Responsive Bidder Meeting in September 2019 between E&A, Nassau County DPW staff, and construction management consultants. OIG learned that Antonios made the opening remarks and introduced the project team. A member of DPW staff indicated to OIG that Antonios answered most of the questions on behalf of E&A at the meeting.’ Vournou did not attend the meeting. Vournou was interviewed by OIG staff. She advised that, initially, Sakalis was the president of E&A but that Vournou became president circa 2005. Vournou stated that there are no titles at E&A but Sakalis is in charge of the office and Antonios is in charge “in the i » Vournou also confirmed to OIG staff that E&A is operated by Antonios, Sakalis, herself, but asserted that she makes the final decisions. She could recall two incidents time in which she disagreed with what Antonios wanted to do. ‘was unable to provide basic information regarding the operations of E&A. For Vournou did not know the names of the companies that would be the on the Family Court project. She first stated that Antonios hired them, and | she thinks E&A is currently interviewing subcontractors and negotiating d that she does not have any direct contacts at Nassau County; E&A’s contacts with the County. Vournou stated that she does not 1et, the references submitted by E&A (the references who, when fied Antonios as either E&A’s owner or co-owner). She did nthe references. made all the hiring and firing decisions, Vournou was ‘employees (besides her son, daughter, and a nephew). e i contributed to the meeting.NASSAU COUNTY OFFICE OF THE INSPECTOR GENERAL Contract Review Report Jodi Franzese Contract # B-5-20 (B-17-19 Inspector Date Issued: eo 2020 ) General “Good government Is everybody's business” Of those four, Vournou knew the last name of only one; and she recalled her nephew being an employee only at the end of the interview. Vournou informed OIG that Sakalis filled out the paper vendor disclosure forms and brought them to Greece in August 2019 for Vournou’s signature. Vournou did not recall completing the electronic vendor forms submitted to the County in September 2019. It should be noted that, when OIG requested an interview with Vournou, it was informed that she was in Greece; she returned a month later. When interviewed, Vournou stated she does not go to the office very day. She explained that, for the past two years, she has been caring for her sick husband. She stated that she goes to the office only when needed but claimed to communicate with Sakalis and Antonios every day. Overall, statements made by Vournou during her interview gave OIG the impression that she does not handle the day-to-day operations of E&A, and that the company is being run by Sakalis and Antonios. During their interviews Vournou, Sakalis, and Antonios all professed that E&A is a small family business that doesn’t “believe in titles.” E&A has approximately $79 million in contracts, in New York City and Nassau County, not including the instant prospective contract (which would more than double the total), and 20 to 27 employees. Irrespective of whether B&A “believes in titles” it would strain credulity and disregard the foregoing evidence to accept that the company actually functions without any officers or prineipals Business History Form (BHF) the BHF asks the vendor to provide the “[nJame, address, and postion directors of the company.” E&A submitted a response which listed only For reasons stated above, in OIG’s view, Antonios and Sakalis ‘officers on Question A(iii) of the BHF, and each should have nt Form. 0 ae a on these questionnaires must be answered by al | Ries percent (10%) or greater ownership interest in only POF submitted by E&A was for Vournou. For ‘Antonios and Sakalis should be consideredNASSAU COUNTY OFFICE OF THE INSPECTOR GENERAL Contract Review Report Contract # B-5-20 (B-17-19) Date Issued: February 7, 2020 “Good government Is everybody's business” officers, each should have submitted PQFs to the County, and the failure to submit PQFs. for all officers is a failure to provide material information. POF Question #5 OIG found omissions in Vournou’s response to Question number 5 onher PF, which asks that each officer/principal of the submitting organization state if, within the past 3 years they have “been a principal owner or officer of any business or not-for-profit organization other than the one submitting this questionnaire.” Vournou responded “no” to this question. However, according to information received by OIG from her counsel, Vournou has the following additional business interests: © Seak Realty Corp, 100% shareholder © SK&V Realty Corp, 100% shareholder © Vrisi Realty LLC, 50% member ‘© 6500 Jericho Tpke LLC, 50% member SKALLI777 Realty LLC, 50% member GK CORONA Realty LLC, 50% member K&V Mineola LLC, 50% member KV Realty LLC, 50% member Realty LLC, 50% member Railroad Ave Corp. 50% sharcholder it i ‘ies had not explain why her investment properties had nt to Vournou’s interview, her counsel advised a ‘entities in prior submissions but was later ind then counsel) to remove the informationNASSAU COUNTY OFFICE OF THE INSPECTOR GENERAL Contract Review Report Jodi Franzese Contract # B-5-20 (B-17-19 Inspector Date Issued: pe 2020 , General “Good governments everybody's business” because it was irrelevant. However, Vournou and her counsel were unable to Provide OIG with proof of this. Question 4 on the CCV asks the vendor to “[IJist names and addresses of all principals; that is, all individuals serving on the Board of Directors or comparable body, all partners and limited partners, all corporate officers, all parties of Joint Ventures, and all members and officers of limited liability companies.” E&A submitted a response which listed only Vournou as President/Officer. For reasons stated above, Antonios and Sakalis should have also been listed as officers on Question 4 of the CCV. Political Campaign Contribution Disclosure Form OIG discovered that, as an apparent consequence of E&A’s failure to report Antonios as a principal of the company, E&A failed to disclose certain political campaign contributions he made on E&A’s Political Campaign Contribution Form. For the Family & Matrimonial Court contract, E&A affirmed on September 20, 2019, that it made no disclosable political campaign contributions during the relevant timeframes. However, if Antonios was listed an officer of B&A on the disclosure forms for the instant contract, his $5,000 campaign tion on October 23, 2017 should have been disclosed. lly, in 2018, E&A was awarded the approximately $43 million contract to build County Police Academy. OIG reviewed the vendor disclosure forms for that ’s vendor disclosures in connection with that contract did not report ipal. E&A disclosed certain campaign contribution(s) but, if Antonios ficer or principal of E&A on the disclosure forms for this contract, Antonios, $10,000 on October 7, 2016, as well as the above $5,000 d have been disclosed. $5 million Nassau County requirements contract for disclosures in 2017 in connection with that contract i cipal. While E&A did disclose a certain campaign * $10,000 contribution on October 7, 2016.NASSAU COUNTY OFFICE OF THE INSPECTOR GENERAL Contract Review Report Jodi Franzese Contract # B-5-20 (B-17-19) Inspector Date Issued: February 7, 2020 “Good government Is everybody's business” Other Disclosures As a further apparent consequence of E&A’s failure to report Antonios as a principal, Antonios did not disclose other reportable information. A. Vournou Construction Management Group (AVCM) is a Nassau County vendor.? Antonios is president and owner of AVCM.* If Antonios had been listed in the disclosure forms for the instant contract, he would have been required to provide a PQF. PQF question number 6 asks, “Has any governmental entity awarded contracts to a business or organization listed in Section 5 in the past 3 years, while you were a principal or officer?” As AVCM provided construction management services to the County from 2014 to 2018, Antonios would have required to answer “yes.” Moreover, he would have also been called upon, in question number 5, to list the businesses in which he was a principal owner or officer within the last three years. According to information he submitted to the County as president of AVCM in 2017, some or all of the following business should have been declared: A, Vournou Construction Management Group (AVCM) MKS Realty LLC Afrodisia Development LLC 6500 Jericho Tpke LLC SPEA Contracting Inc ENT Realty LLC ction Estimating and Business Development School of Practical Learning that E&A is certified by Nassau County Office of Minority Affairs ‘Owned Business Enterprise (WBE). The definition of WBE under part, that a WBE is “an enterprise in which such women ownership ity to control independently the day-to-day business decisionsNASSAU COUNTY OFFICE OF THE INSPECTOR GENERAL Contract Review Report celine Contract # B-5-20 (B-17-19) passed Date Issued: February 7, 2020 General “Good government Is everybody's business” Summary/Conclusi As a result of its review, OIG identified significant matters of concern within the Business History Form submitted by E&A® as well as the Principal Questionnaire Form submitted by Vournou. The OIG found evidence revealing that Antonios and Sakalis are acting in the undisclosed capacity of officers or principals of E&A, exercising control over of E&A’s day-to-day and financial operations, respectively. Indeed, Sakalis is on record as being the Chief Financial Officer, while Antonios is essentially a de facto officer or functional principal of E&A. It appears that Antonios’ role in E&A may be akin to that of a Chief Executive Officer (CEO) or Chief Operating Officer (COO). As a result, in the view of the OIG, both Sakalis and Antonios should have been listed as officers on E&A’s Business History disclosure forms and each should have submitted a POF to the County. E&A failed, however, to disclose to Nassau County that Sakalis is the Chief Financial Officer of E&A and that Antonios is likewise an officer or other principal _ of E&A. Additionally, it is not clear to OIG whether Vournou sufficiently “exercises the authority to control independently the day-to-day business decisions” of E&A to meet the definition ofa WBE; this is a question within the purview of the certifying agency, ‘possesses the requisite business integrity to be deemed a “responsible” ontract award. ;were submitted and electronically signed by Vournou on > prepared by Jenny Sakalis and then signed by Vournou. the chief decision-making authority in an organization ed with overseeing the day-to-day administrative and