When Joe Deters reclaimed his desk as Hamilton County prosecutor in 2005 after a six-year hiatus, one of his first acts was to order the extinction of the office’s prehistoric Windows 98 computer system.
That wasn’t all. The e-mail server needed to be built from scratch. Website access needed to be opened up. The property room needed an inventory control system. But rather than shop around to find the best possible deal for taxpayers, Deters handed the job to a man named Dennis Lima.
Lima was practically an insider. He and Deters went to college for a time together at Wittenberg University in Springfield, Ohio. During Deters’ first run as prosecutor, from 1992 to 1999, Lima was his full-time information technology director. When Deters became Ohio state treasurer in 1999, Lima left and started his own company, LimaCorp LLC. Still, they remained close enough to be described as “buddies” by one one source who knows both men. Close enough, said another, that Lima attended the wedding of Deters’ second-oldest son last Dec. 30.
For his second go-around fiddling with the prosecutor’s IT systems, Lima would be a contractor. Within a month of Deters’ taking office in January 2005, LimaCorp was given an 11-month consulting contract worth an estimated $181,275 in billings. From that day, the prosecutor’s office has approved a total of $2.2 million on IT contracts with LimaCorp and its successor OnLine Business Solutions (OBS). County payment records show that Lima’s companies received $694,129 during that time. Assistant Prosecutor Michael Friedmann would not explain the difference in the dollar amounts. In any case, none of the contracts was put out for competitive bidding.
Not that they had to be. Ohio law exempts the hiring of consultants — as well as lawyers, accountants, doctors and others — from the state’s competitive bidding requirement for purchases over $50,000.
But when the hiring of a technology consultant entails more than $2 million in contractual obligations, wouldn’t it behoove a county agency to put the job up for bids? Ron White, a professor who teaches ethics courses at Mount St. Joseph University, says it is often expedient to hire reputable people outside the bidding process. The downside, he says, is that taxpayers are less sure what their officials are getting into.
“When government spends tax dollars, we all expect that it gets “bang for the buck” when it solicits products and services from the private sector,” White says. “In most cases, the legal and moral standard implies competitive bidding, whereby government accepts bids for any outside work and selects the best bid based on quality and/or cost.”
Deters declined an interview request from CityBeat. In response to a public records request, his office provided 12 years’ worth of contracts with Lima’s companies. None of the records explain why Lima was retained in the first place. Deters’ office would not answer an e-mailed question about the quality of Lima’s work. Lima would not comment either.
“As a matter of policy, I do not discuss customer business matters with anyone but that customer,” Lima wrote in an e-mail to CityBeat. “Sorry I could not oblige.”
Quite the IT handyman
For a “consultant,” Lima appears to have accomplished much in adding greater functionality to the prosecutor’s IT systems, his contracts indicate. He brought the e-mail system in-house. He upgraded the website. He created a system for bar-coding and tracking evidence for criminal cases. He built systems for document imaging, employee records, indictments, civil case dockets, delinquent real estate and for tracking appeals court cases.
Yet when other Hamilton County agencies hire outside contractors to upgrade computer systems, they often — perhaps typically — put the work up for bids. When the office of County Auditor Dusty Rhodes needed to replace its system for tax accounting and website property searches six years ago, it received bids from four companies. The highest, Rhodes said, was for $5.5 million. He chose the lowest, a $2.7 million bid from a company in Illinois.
The office of Sheriff Jim Neil also goes the competitive bidding route for its IT needs. Spokesman Mike Robison says it just chose a vendor that had made the best bid for the department’s new mugshot system. He says it is in the process of soliciting bids for new records-management and jail-management systems.
John Bruggen, Hamilton County’s budget director, says IT purchases are done on a decentralized basis by the various county offices and departments. He says he doesn’t know how many IT contracts have involved consultants, only that those purchases are typically put up for bid.
“Everything I’m aware of, certainly in administration, is bid out through our purchasing department,” Bruggen says. “I know, for example, that our payroll system contract was bid a few years ago. I can’t imagine a situation where that wouldn’t be the case.”
County Purchasing Director JoAnn Cramer acknowledges that consulting contracts are exempt from competitive bidding. With technology system purchases, she says approaches vary.
“Sometimes if a department contacts me and there’s a lot of participation out there and they want to go out for a bid, then we’ll go out for a bid,” Cramer says.
At least one government — the state of Ohio — is moving toward requiring competitive bidding for IT consulting jobs. The state House of Representatives just approved a budget amendment containing such a requirement for state agencies. The amendment was passed after the Columbus Dispatch reported that the Ohio Department of Administrative Services had awarded millions of dollars in no-bid IT contracts in the past six years. The amendment is now in the Ohio Senate’s hands.
Bankruptcy time
Despite receiving $2.1 million worth of contracts in the first five years of his consulting deal with the Hamilton County prosecutor, Lima was on shaky financial ground. At the end of 2009, LimaCorp’s landlord filed suit accusing the company of not paying rent. Six months later, Lima declared himself bankrupt, with less than $50,000 in assets and more than $500,000 in debts, mostly bank loans to LimaCorp.
Lima’s connection to the prosecutor’s office was a boon. Defending him in the rent case was Mark Vollman, an assistant prosecutor who moonlights in private practice. Neither Lima nor Deters would say who paid Vollman. Vollman did not return phone calls. Lima moved on by forming OnLine Business Solutions in 2011, and the prosecutor’s office continued to throw consulting contracts his way without interruption. Lima has run his company through an apartment in Sycamore Township ever since.
According to a rate table included in their contract agreements, OBS charges the prosecutor anywhere from $40 for “administrative services” to $200 an hour for “management consulting.” Nowhere, though, do the contracts state how many OBS employees are working on the account. Neither Lima nor Deters would provide an employee count.
Lima’s most recent contract with the prosecutor’s office runs through Dec. 31 and is capped at $95,000. White, the ethics professor, is disturbed by the public’s inability to determine if the prosecutor’s office is getting the best value for its money and whether or not Lima is doing a good job.
“In an ideal world, everyone that has the ability to spend taxpayer dollars would be trustworthy and wouldn’t use their position of authority to reward friends with lucrative contracts,” White says. “Cronyism is a global problem, and there’s no reason to think that it’s not a problem in Cincinnati. Let’s, at least, take the time to eliminate it from the budget.”
CONTACT James McNair: jmcnair@citybeat.com, 513-914-2736 or @jmacnews on Twitter
This article appears in Jun 7-14, 2017.