NOPA Applauds Ex-Office Depot Employee in California for
His Ethical Stance on Office Supplies Contract
ALEXANDRIA, VA (August 3, 2009) The National Office Products Alliance (NOPA) today voiced its great appreciation and encouragement of Earl Ante, who recently filed suit in California against Office Depot alleging wrongful discharge for refusing to adjust computer records related to the company's office supplies contract with the City of Berkeley, CA. Earlier this year, Berkeley officials conducted an audit of their office supplies contract and subsequently negotiated an announced settlement of $289,000 as reimbursement for contractually required price discounts they concluded the City had not received.
"Mr. Ante deserves the encouragement and full support of citizens in Berkeley and throughout our entire country for taking an ethical stand against a corporate request for action that he believes would be contrary to the public interest," said Chris Bates, President of NOPA. "Like David Sherwin, a former Office Depot employee who is now a protected whistleblower in Florida, Earl Ante has stepped forward bravely and assumed great personal risk to bring an allegation of improper corporate behavior to public attention, He also joins a number of local and state government employees and elected officials in several states who have met resistance and still pushed courageously to complete and publicize the results of public audits of their own office supplies contracts," Bates added.
According to its periodic statements filed with the Securities and Exchange Commission (SEC) and media reports, Office Depot is under investigation by six state attorneys general (CA, CO, FL, MO, OH and TX) for alleged 'bait and switch' pricing practices associated with its participation in the national U.S. Communities contract. Thousands of local governments, school districts and public institutions around the country use that contract, estimated to be valued at $600-700 million annually, to buy office supplies. In addition, the company is under investigation by three federal agencies - the Department of Defense, the Department of Education and the General Services Administration - with respect to its handling of federal office supplies contracts. The U.S. Department of Justice is coordinating those three separate investigations.
NOPA Reports California & Ohio Join Other States in Opening Investigations of Office Depot
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Business Wire 2009
2009-07-21 20:32:04 -
Office Depot has disclosed on its investor website : that the Attorneys General of California and Ohio have launched civil fraud investigations into its $700 million dollar U.S.
Communities national contract that thousands of local governments, school districts and public institutions draw upon to purchase office and school supplies. California and Ohio join Colorado, Florida, Missouri and
Texas in opening such investigations
Former account manager in Office Depot's Business Solutions Division, David Sherwin, a protected whistle-blower in Florida where the company is headquartered, has been credited with the launching of the investigations.
Today, the National Office Products Alliance (NOPA) called upon the Office of the Attorney General of California to include in its investigation of Office Depot a thorough examination of the role played by the Walnut Creek, CA-based U.S. Communities organization which has allegedly received as much as $20 million in kickback payments from Office Depot for sponsoring the national contract now under investigation in six states.
California's Department of General Services recently ended its state-wide contract with Office Depot and negotiated a settlement agreement with the company for alleged overcharging. Other states, including Georgia, also have negotiated settlement agreements with the company within the past two years.
Additionally, the U.S. Departments of Defense and Education and the General Service Administration, with coordination from the U.S.
Department of Justice, are conducting their own investigations into Office Depot's handling of federal government office supplies contracts.
According to NOPA, these two new investigations again highlight the inherent problems associated with reliance on a single office supplies contracts by government agencies at all levels. Strategic sole-source contracting has damaged competitive independent small businesses around the country, reducing vendor choice and raising prices for government customers, said Chris Bates, President of NOPA. The idea that sole-source contracting offers a best value' proposition should be questioned by every federal, state and local government and institutional entity in light of the results from so many audits and investigations.
7/331/2009: San Jose Mercury News
LEGAL WOES MOUNT FOR OFFICE DEPOT
-- Office Depot has spent the past year trying to resolve widespread accusations it overcharged government customers including California for scissors, hole punches and other desk-drawer staples. But the Florida retailer's legal woes continue to multiply. The company, while denying wrongdoing, acknowledged in financial filings this week that attorneys general in California and five other states, as well as federal authorities, are investigating its multimillion-dollar governmental supply contracts.
"We are currently cooperating with the Florida, Texas, Missouri, Colorado, California and Ohio Attorneys General with respect to civil investigations regarding our pricing practices," the company said in its second-quarter report. "We are also cooperating with the U.S. Department of Defense, the Department of Education and the General Services Administration with respect to their joint investigations with the Department of Justice."
The company in August repaid $2.5 million to California after a Mercury News investigation last year and a subsequent state audit alleged overcharges and other concerns. Georgia officials last year suspended Office Depot from doing business in the state for five months after its own audit cited $230,000 in overcharges.
Company officials did not specify the nature of the latest investigations, and a spokeswoman for California Attorney General Jerry Brown said the state justice department could not comment.
But the company's new legal woes appear to involve its supply contracts through U.S. Communities, a nonprofit government purchasing cooperative based in Walnut Creek. The co-op brokers contracts between public agencies and private vendors for items ranging from office supplies to artificial turf; it currently serves 36,000 cities, counties, school districts and other agencies.
The probes apparently were instigated by a former employee, David Sherwin, an account manager in Florida who left Office Depot in April 2008 after 12 years. In complaints to state and federal authorities, Sherwin alleges his former employer made false statements to its government customers by manipulating the U.S. Communities purchasing contract -- for example, by randomly changing prices and entering false cost data in the Office Depot ordering system. That allegedly caused the agencies to buy the company's products at higher prices than they had agreed upon.
Sherwin further alleged that three former Office Depot officials hold senior positions with U.S. Communities and that the nonprofit gets "kickbacks" from the company for lining up government buyers.
U.S. Communities acknowledged that three former Office Depot officials work for the organization as program managers for various contracts, including Office Depot. But the agency said they do not have oversight over the organization or a decision-making role in the Office Depot contract.
But Sherwin isn't the only ex-employee to accuse Office Depot of dirty dealing with government customers. Earl Ante, a former Office Depot salesman from Fremont, filed a federal lawsuit this week accusing his former bosses of firing him for refusing to falsify data that showed the company overcharged the city of Berkeley hundreds of thousands of dollars.
Berkeley officials conducted their own investigation of their contract with Office Depot and concluded the city was overcharged $289,000 over two years. Office Depot repaid the city in April.
S.F. to Office Depot: How Much Were Those Paperclips Again?
By Anna McCarthy in Government
Tuesday, Aug. 4 2009 @ 8:30AM
Has Office Depot taken the city for a ride?
?Let's hope the city saved its receipts. According to San Francisco's Director of the Office of Contract Administration, Naomi Kelly, the vast majority of the city's office supplies are purchased from Office Depot -- that would be the same Office Depot currently under investigation by the state Attorney General for overcharging on contracts with various public agencies around California (not to mention investigations currently under way in Missouri, Colorado, Ohio, and Texas). While a representative from the California AG's office would neither confirm nor deny the investigation, the FAQ section in the "investor relations" section of Office Depot's Web site does his job for him.
Kelly told SF Weekly that city employees in her office "became concerned when its spend rate for office supplies was higher than anticipated" -- and both the controller's office and city attorney were urged to conduct audits.
If said audit results in more money in San Francisco's pocket, it wouldn't be unprecedented. Last August, Office Depot reimbursed the state of California $2.5 million for overcharges during a two-year period of $57 million in state office supply purchases, according to California's Office of General Affairs. Since then, other cities nationwide have conducted their own audits with similar results. Officials in Berkeley recently uncovered evidence that the Depot overcharged them hundreds of thousands of dollars. Since filing their claim with the in April, a spokeswoman for the city says Office Depot has sent $289,000 Berkeley's way.
On the state level, the National Office Products Alliance (NOPA), an independent office products trade association, issued a press release a few weeks ago urging the the California Attorney General to look specifically at Office Depot's Walnut Creek-based US Communities contracts, which they allege resulted in "kickbacks" perhaps exceeding $20 million. A representative from US Communities said that these allegations are false, and clarified that the nonprofit -- which matches public entities with the cheapest office supply deals -- receives just one to two percent of the sales price from the vendors (including Office Depot, among others) to cover their administrative costs.
NOPA's release also claims that a number of federal agencies, including the U.S. Department of Defense, Department of Education, and the General Service Administration are conducting their own investigations into government contracts with the Depot.
Jul 6, 2009 11:52 am US/Mountain
Colorado AG Investigates Office Depot Pricing
DENVER (CBS4) ?
Office Depot may have been cheating school districts out of money. The company acknowledges it is under investigation by the Colorado attorney general's office.
The probe involves a major contract between Office Depot and the purchasing agent for public agencies in Colorado. Allegations have been made about "bait and switch" tactics on the pricing of items to institutions.
The company provides supplies to school districts in Colorado and throughout the country under a national contract negotiated through an organization called U.S. Communities.
The detailed criminal complaint was filed by a former Office Depot account manager David Sherwin. It states that the company engaged in trickery and deception, resulting in fraudulent overcharges.
"The state of Colorado is one of the 10 states that has been impacted the greatest in the United States," Sherwin said.
In North Carolina an audit found a $300,000 overcharge of state agencies. In California Office Depot paid $2.3 million to settle allegations of overcharges. Georgia terminated its $40 million contract after finding problems in pricing.
The Cherry Creek School District discovered irregularities in prices charged by Office Depot about a year and a half ago and has since resolved the issue.
In a statement to CBS4 the company wrote that it is aware with the Colorado attorney general's investigation and "will cooperate fully."
There is also a federal investigation. It is reportedly focused on purchases from Office Depot by the Department of Defense and the General Services Administration.
Colorado AG Investigates Office Depot Pricing - cbs4denver.com
Jul 6, 2009 ... Office Depot may have been cheating school districts out of money. The company acknowledges it is under investigation by the Colorado attorney general's office . ... Inside a Denver-area Office Depot store. CBS. Click to enlarge ... In a statement to CBS4 the company wrote that it is aware with the ...
http://cbs4denver.com/investigates/Offic... - 60k - Cached - Similar pages
I-Team Follow-Up: State AG putting Office Depot under microscope
By Leisa Zigman, I-Team Reporter
KSDK -- The I-Team has new information since its Office Depot investigation aired Monday night.
Missouri Attorney General Chris Koster has sent a civil investigative demand to Office Depot to determine whether the office supply giant has engaged in deception and fraud. The attorney general wants Office Depot to supply not only pricing documents, but specific details about charges to government entities and non-profits in 2006, 2007 and 2008.
Six states, including Missouri, have placed Office Depot under the microscope for allegedly overcharging government entities and nonprofits.
Koster and Missouri State Auditor Susan Montee want to know if Office Depot owes a refund to Missouri schools, churches, cities, towns and state offices.
The civil investigative demand sent to Office Depot states:
"The attorney general has information that Office Depot, inc., including its affiliates and/or agents, has engaged in deception, fraud, false promise, misrepresentation, unfair practices, and/or the concealment, suppression, or omission of material facts in connection with the sale of office products to Missouri government entities and nonprofit or charitable entities."
"We are willing to step into the shoes of local agencies and bring this action forward if fraud is found," Koster said.
Office Depot e-mailed the following reaction:
"While we intend to vigorously defend any allegations of wrong doing lodged against our company, we will fully cooperate with the Missouri Attorney General's Office, as we do in all government and regulatory inquires."
At issue is whether schools and government agencies agreed to do business with Office Depot at specific prices, but were switched to higher priced items without their consent or through deceit.
"These government contracts are effective in all 50 states," said David Sherwin, a former senior executive for Office Depot who handled government accounts. "Missouri, Illinois, Texas, Florida, North Carolina, California, and across the country. It's somewhere between one billion and 1.2 billion in contracts office depot receives every years."
Sherwin pointed out the alleged deception to his superiors. Office Depot fired Sherwin last April for what the company called workplace misconduct. He is now a whistle blower aiding Florida's attorney general in that state's investigation.
Office Depot calls Sherwin a "disgruntled employee whose negative campaign includes numerous false, misleading, and baseless allegations."
"If in fact the definition of disgruntled is an employee who refuses to take part in what he considers criminal activity, refuses to continue to take part in deceptive pricing practices resulting in over charging millions of dollars to government entities, then you betcha, I was disgruntled," Sherwin said.
The I-Team has confirmed that all investigations involving Office Depot are civil, not criminal.
Fort Myers, Florida
U.S.A. Click here to read other Rip Off Reports on Office Depot