Collusion Charged
Mom, Pop Compete For DOE Contracts

By HOWARD MEGDAL

A report last week by city schools' Special Commissioner of Investigation Richard J. Condon alleges that two construction companies owned by a husband and wife colluded in bidding for a number of Department of Education contracts.

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Eastco Building Services, Inc. and All Building Services, Inc. each bid on four repair requirements contracts in July 2003. Eastco is owned by Steven Brown, while All Building is in his wife Debra Dix Brown's name.

A Joint Venture

According to the report, the two businesses share employees and telephones, are within the same building, and all four DOE bids were jointly prepared. The couple's tax returns also showed both companies paying income to both Mr. Brown and Ms. Dix Brown.

The matter was referred to Mr. Condon's office after Deputy City Comptroller Greg Brooks brought the matter to Schools' Chancellor Joel I. Klein's attention in a December 2004 letter. Both the Department of Citywide Administrative Services and the Department of Investigation joined SCI in investigating the matter.

The report stated that Mr. Brown at first testified falsely to SCI, then refused to continue testifying until compelled to by a judge in State Supreme Court. He then chose not to answer questions, citing his right against self-incrimination. Ms. Dix Brown also chose to cite the 5th Amendment for "approximately 112 questions," according to the report.

"All Building exists as an alter ego of Eastco, and their operations are interwoven," Mr. Condon said in the report's conclusions. "Brown's initial testimony was incredible as a general matter."

He recommended that DOE seek civil damages from both companies, and a spokeswoman for DOE said "we have asked the city Law Department to review the report and advise us on our options for recovering damages." Mr. Condon also forwarded the report to the State Attorney General and the Manhattan District Attorney's Offices, as well as to each city department the companies have done business with in the past.