Blind vendors say CA employees abuse charity loophole

“Homemade cinnamon rolls, $1.50 each.” “St. Patrick’s Day Cookie Grams!” “Tamale sale, $18 per dozen.” “Just in time for Valentine’s Day, luscious lips-shaped boxes filled with Valentine M&M’s.”

If you work in a large, state office building, you’ve probably seen plenty of these signs: offers of cheap food from coworkers, with “all proceeds going to benefit” one charitable cause or another. Depending on where you work, you can get anything from basics like candy bars or nachos or spaghetti with meatballs to more exotic options like pumpkin soup or pork bao dim sum dumplings. Many of these signs include extensive Photoshopping, with Jack Black as Nacho Libre or a quartet of babies done up in KISS makeup helping make the pitch.

Good for office morale and all pretty innocent…right? Not so, say some blind vendors who work with a state-run program to run concessions in state office buildings. They claim that some of these charitable pitches cut into their business and violate the law.

“They just go on and on with it,” said Reese Griffith, a blind vendor who has been working filing up vending machines in state buildings since 1964. “Nobody cares. They spent a lot of taxpayer time. They send emails, they put up signs in break rooms. It’s not really an underground thing.”

It all goes back to a 1936 federal law called the Randolph Sheppard Act. The act calls for blind people to be given preference in running vending machines on public property, part of a Depression-era movement to help find work for people who were having trouble finding jobs.

Similar programs operate around the country; Hawaii, Illinois and Tennessee are among the states with active programs. California signed on way back in 1937.

Megan Juring is deputy director for independent living and external affairs for the Department of Rehabilitation, which operates the Business Enterprise Program, or BEP, as it’s known. While Griffith paints a picture of a program where many longtime vendors are retiring or dying off, Juring said the program is remarkably stable.

In 2006, she said, there were 129 fulltime vendors logging $5.3 million in profits off of $48.7 million in sales, and bringing home an average income of $41,000. In 2010, 112 fulltime vendors made almost $6.4 million in profits on $48.6 million in sales and making annual incomes of almost $57,000.

But there are some worrisome signs for the program. The number of facilities served by blind vendors in California dropped from 149 to 140 during 2010.

The program doesn’t require that contracts be awarded exclusively to blind vendors, but gives them preference unless there is a “compelling reason” to offer the business to someone else. They mainly stock vending machines, but some operate snack bars or even full cafeterias. There’s also not a backlog of blind vendors; not all of the potential buildings have a blind vendor seeking the work.

So how do blind people do this kind of work?

“In some cases they’re owner-operators, sometimes they have employees, just like anyone else would run a food service business,” Juring said.

Though the program is federal, it’s coordinated by the state, and operates in buildings at the federal, state and local government levels. BEP signs contracts with particular state office buildings laying about how many machines there will be and where, and how many charitable campaigns employees can carry out on the premises per year. In some small buildings this may be none, while larger buildings often can hold four or more charitable campaigns per year.

Indeed, state workers in California have a long, proud tradition of supporting various charities. The California State Employees Charitable Campaign just completed its 53rd year and handed out awards to a trio of state workers for bringing in almost $7.3 million for a variety of causes. Flyers seen around state office buildings advertise the proceeds will go to organizations like the March of Dimes or a wide variety of state agency holiday luncheons.

Juring said that if particular buildings operate under signed contracts limiting the number of charitable campaigns, those limits are technically enforceable. However, while her agency has the ability to shut down commercial food operations that run without the state’s blessing, they don’t have the means to stop sales by individual state employees.

“If there is an agreement, we will try to monitor that,” Juring said. “But we don’t have any jurisdiction to monitor non-commercial food operations.”

Another vendor, Ron Long, operates in five buildings, including the Education and Health & Human Services Buildings, and runs the East End Sports Grill. He said that so-called charity sales are undercutting him because they don’t charge taxes. He also said that he’s never informed of charity drives. For instance, he spends about $70 a day to buy donuts, but often ends up throwing them out unsold because buildings are having bake sales he didn’t know about. Last month, he asked program coordinators to file complaints with the Board of Equalization and other state agencies.

While Sacramento and other counties routinely track restaurants and convenience stores for food safety, they don’t look at sales between employees in office buildings – and cases of food poisoning that result wouldn’t necessarily show up on anyone’s statistics. Long noted, “you can’t just go out on the corner and start selling hot dogs.”

Finally, Griffith and Long both claimed a growing number of state employees are running actual businesses under the guise of charity. This allows them to sidestep sales taxes—charities are generally exempted, which is one reason the number of campaigns per year is often limited in the first place.

While there have been some tensions between blind vendors and charity sales for decades, Griffith said, the issue of these under-the-table sales has grown much worse.  
“There’s more of it, more out in the open,” Griffith said. “I don’t know if they have more time on their hands.” He added, “We never used to have this problem.”

Long said it’s gotten much worse over the last three years.

 “I wouldn’t mind if it was legit and wasn’t all the time,” Long said.  “According to our contract, it’s supposed happen once or twice a year, not once or twice a week.”