By Scott Lewis
Frank McQuade has a theory that says whenever there is impropriety in government, it tends to start out with something small. And then, the theory goes, "you turn over the rock and you see all the worms underneath."
So, naturally, the longtime Long Beach resident, lawyer and community activist has bypassed such pressing issues as the absentee ballot or the Mesivta/tax roll scandal, and focused his attention on a slightly lower-profile topic: vending machines.
When a source from inside City Hall told Mr. McQuade that there was no accountability for monies collected from the 12 vending machines on City of Long Beach property-locations that include City Hall, the Recreation Center, the boardwalk and Riverside building, and the West End Community Center-he started investigating.
After filing a Freedom of Information request to obtain disclosure of the revenues and copies of contracts regulating the machines-a FOIA request that was accepted by City Hall-Mr. McQuade found no evidence of competitive bidding, no accurate calculation of revenue, and no proof of contracts.
"Just because it's loose change, doesn't mean it should be treated loosely," Mr. McQuade said of the way the City conducts its vending-machine concessions. "I asked for a FOIA record in May, and in August I received something entirely different from what I requested. The FOIA answer, after three months, simply showed a copy of the agreement with Coca-Cola [Bottling Company] for exclusive vending rights. I consider this evasive, and it leaves open all of my questions."
Long Beach Democratic Leader Gene Cammarato told The Herald that former City Manager Ed Eaton was responsible for conducting the competitive bidding process, and that the City comptroller, Mike Barlotta, calculates the revenue coming in from the vending machines.
"I just don't handle this stuff, I don't handle the vending machines," Mr. Cammarato said.
Attempts by The Herald to reach Mr. Eaton and Mr. Barlotta were unsuccessful.
Meanwhile, the 12 vending machines on City property are not registered to Coca-Cola, but to Party Magic Enterprises Inc. of Island Park, owned by Anthony Gach, who says the reason Mr. McQuade's FOIA request did not result in proof of a contract between the vendor and the City is because there is no such contract.
Back in 1997, when vendors were being sought for Long Beach's 75th anniversary, Mr. Gach says his company, a vendor of Coca-Cola, put together the deal between the City and the soft-drink giant. "We don't have a specific contract," Mr. Gach told The Herald. "It's an understanding. We brokered the deal and that got us the deal."
The deal, according to Mr. Gach, was for the City to receive $50,000 from Coca-Cola over five years, $20,000 of which was paid in the first year. In return, the City would promote Coca-Cola as the official, exclusive soft drink of Long Beach.
The requirements for Party Magic Enterprises are "vague," according to Mr. Gach, but otherwise they are obligated to provide and tend to the vending machines, submit to the City an annual financial spreadsheet, and to pay to the City a small percentage of the sales, all of which Mr. Gach says he has done.
"Basically, it's a sweet deal for the City," Mr. Gach said. "It doesn't cost the City anything. The City gets money from Coca-Cola, and they get a percentage from sales."
But to where or whom the money goes to in the City is what Mr. McQuade wants to know.
"That's unacceptable to have thousands of dollars transacted by the City with only an understanding," Mr. McQuade said. "Because of this lax standard, it is apparent that someone is getting an unreported windfall. Is it the City? Is it particular members of the City government? Or is it the vending-machine owners? There has to be a contract so it's determined exactly where the money goes. It has to be accounted for. The vague relationship is not acceptable for open government.
"There is certainly every appearance of sloppy, poor bookkeeping." he said. "There's no contract-that's at least sloppy bookkeeping if all you have is a handshake and a wink. It's at best sloppy bookkeeping, at worst it's illegal. If they want to wipe out any possibility of inappropriate government, they should tighten up the procedure. It bothers me to think that business is done this way. The people deserve much better."
Based on the "vague" relationship between the City and Mr. Gach, Mr. McQuade is calling for a thorough review by an independent counsel of the City's procedures concerning vending machines, disclosure of the revenues, and for competitive bidding to be installed.
If there are illegalities, Mr. McQuade calls for prosecution by the District Attorney's office.
"There are too many examples of government in Long Beach that has a tradition, history and heritage of scandal or excess," Mr. McQuade said. "For once, I'd like to see some aspect of government that's beyond reproach. There's always been a scent, but lately there's been smoke. And I think the smoke is going to lead to some pretty significant fires that the city government is going to have put out, or they'll have to answer to the people."
In response to Mr. McQuade's statements, Mr. Cammarato said, "I don't know what's not beyond reproach in Long Beach government. Is he saying we're stealing? I'm confused by his statement. I don't know of anything that's off."
As it turns out, the City might have to answer to the Coca-Cola Bottling Company first. According to Mr. Gach, a meeting between Coca-Cola and Mr. Cammarato is expected to take place soon, where, Mr. Gach says, the beverage company is set to claim that the City breached its contract with them.
"Coca-Cola is very upset that Poland Spring had a booth at the Arts Fair," Mr. Gach said. "Coca-Cola is supposed to be the exclusive soft drink. Really, the City of Long Beach is doing nothing for Coca-Cola."
Mr. Cammarato said that Poland Spring was selling bottle machines at the fair, not individual drinks, and that Coca-Cola has no problem with its contract.
Repeated phone calls from The Herald to the Coca-Coal Bottling Company of New York, located in Hauppauge, were not returned as of press time. When asked whether he expected Coca-Cola to terminate its contract with the City in accordance with the terms of the agreement, Mr. Gach said, "I think there's a good shot at it."
