To reach New Orleans’ disadvantaged business contract goal, Sidney Torres would hire his mom Business News

In his bid for one of two open New Orleans sanitation contracts, garbage hauling magnate Sidney Torres IV has proposed handing a portion of work meant for disadvantaged businesses to his mother’s company, a firm that for years relied on Torres’s garbage venture to operate, city records show.

Torres said the firm run by Alma Torres is qualified for the work, and that he has played “exactly by the rules.” But two council members and a government contracts specialist say he is sidestepping local requirements that disadvantaged subcontractors remain independent from the firms that hire them.

New Orleans contractors have flouted those rules before, resulting in a string of controversies and more than one attempt to reform the system. Even with those reforms, loopholes persist — and there’s no current ban against hiring a relative to meet the city’s diversity goals.

Still, Torres appears to be the only bidder to do so among five companies vying for the chance to haul garbage and recyclables across a swath of New Orleans. A city selection panel is scheduled to review bids, including from Torres’s IV Waste, on Tuesday and Thursday.

Torres, who fielded a reporter’s questions for his mother, has a history of partnering with her company, ART Janitorial Services: In 2008, he agreed to support his mother, a former events planner, and her months-old company by sharing a warehouse, trucks, fuel and staff, according to lease agreements obtained by The Times-Picayune | The New Orleans Advocate.

He also replaced his disadvantaged business partner with Alma Torres’ firm that year after he won a contract to clean up the French Quarter.

Sidney Torres said his mother is deserving of the work she’s received, noting several other contracts she’s won that Torres played no role in. And he emphasized that ART has won DBE recertification approvals from the city every two years since it was founded.

“Every business, including a DBE, needs to be able to perform and ART is no exception,” Sidney Torres said in an emailed statement. Alma Torres said her lawyer had a recent death in the family and declined to comment without legal counsel.

Sidney Torres declined to say whether ART continues to rent property or staff from him.

But observers said the arrangement seems out of line with the intent of a program meant to give small, disadvantaged businesses a leg up. And they said Alma Torres’ political spending — more than $320,000 since 2019 — suggests she is far more well off than some of her DBE peers.

“On the face of it, what you’re suggesting to me is not in the spirit of what we want the program to be,” said council member Eugene Green, who sits on the council’s Sanitation Committee.

DBE programs often exploited

The contract Torres seeks would reform trash collection in the city, which has long been managed by two Black-owned haulers, Metro Services Group and Richard’s Disposal. After months of spotty collections from Metrocity officials split its work into two portions and put both jobs out to bid.

Firms working under the first contract, which Torres wants, will haul trash in Lakeview, Gentilly, Marigny, Bywater, and the 7th Ward. Those working under the second will cover New Orleans East and the Lower 9th Ward.

In his bid, Torres also proposes to partner with MDL Enterprises, a Black-owned debris-removal firm based in Marrero. He would give 8% of his contract work to MDL, and another 30% to his mother’s firm.

The partnerships are designed to meet a city goal that 35% of public contracts go to companies owned by economically or socially disadvantaged people. A team of seven in the city’s Office of Supplier Diversity is tasked with enforcing that goal.

That office was formed under Mayor Mitch Landrieu and most recently tightened its rules in 2015 after revelations that a major contractor was passing revenue through a disadvantaged company and recouping some of the money itself.

Earlier controversies were sparked by a Times-Picayune investigation, which examined disadvantaged business programs from seven local government agencies. The reporting revealed how some of the biggest winners from the programs were companies deemed disadvantaged even though they were owned by millionaires.

None of that is surprising to Charles Tiefer, a professor of government contracting at the University of Baltimore Law School. He said minority contracting programs have been exploited in many cities.

“Over the last 10 or 15 years, governments have not been policing DBE’s as they should,” Tiefer said. “And so it’s very tempting for sizable prime businesses to take advantage of improper loopholes.”

Unlike federal programs, New Orleans’ DBE program grants no presumption of disadvantage to any group: White men may apply, and dozens have received certification, according to a 2018 city-commissioned report. So too may minorities and women.

Alma Torres did face questions about her company’s independence when her disadvantaged status was revoked in 2010. A city oversight panel reinstated her a month later on appeal.

Since then, ART has been selected as a disadvantaged subcontractor on three additional city contracts not involving her son’s companies, records show.

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ART since 2015 has also handled sanitation for the French Market Corporation, which oversees the Flea Market and Farmer’s Market with a 12-member board appointed by the mayor. That contract brought her company at least $3.7 million in receipts, records show.

Disadvantaged donor

The 2018 consultants’ report recommended that City Hall fall in line with federal programs that cap a disadvantaged owner’s personal net worth at $1.32 million.

Instead, officials have chosen to cap disadvantaged firms’ three-year gross annual average receipts at a little under $24 million, following a guideline that federal programs implement in addition to a net worth cap.

Alma Torres reported a little less than $673,000 in average annual gross receipts from 2018-20, according to the most recently available records.

She’s also been a political donor. In October, ART gave $100,000 to Sidney Torres’ The Voice of the People PAC. Alma Torres has given an additional $220,000 in federal contributions since 2019, records show, including $105,000 to the Trump Victory Committee, the fundraising arm of Donald Trump’s failed bid for a second presidential term.

That spending concerns council member Oliver Thomas, who said the city’s disadvantaged business program is not designed to lend a hand to firms with that kind of wherewithal.

“I don’t know very many DBE companies that have the ability to donate hundreds of thousands of dollars,” said Thomas, who chairs the council’s sanitation committee.

Sidney Torres said his mother has “funds available to her beyond what she earns at ART,” though he did not go into detail.

Asked if his mother should qualify as economically disadvantaged, Sidney Torres said the law decides who and what businesses qualify for the DBE program. “I play no role in that,” he said.

Entering the marketplace

The son of a powerful Chalmette attorney and the grandson of the longtime Clerk of Court for St. Mary’s Bernard Parish, Sidney Torres is well known in political circles. So too is he known for his $250 million real estate portfolio and reality television show.

He also received a wave of publicity in the years after Hurricane Katrina, when his first garbage venture, SDT Waste & Debris Services, won a contract to clean the French Quarter. At the time, he hired New Orleans company Nolmar/Empire Services as his DBE partner.

What’s less widely known is that Torres replaced Nolmar/Empire with ART in February 2008 — four months after Alma Torres founded her company. His leases of property and staff to ART steered no less than $25,300 a month in rent back to SDT, on top of regular payments from the city, records show.

Torres said he severed ties with Nolmar/Empire because of performance issues. The company’s principal, Charlie Lusco, didn’t return a message seeking comment.

Torres also said he charged ART a reasonable rent, and that he was trying to help a disadvantaged business get off the ground.

“The lease of equipment allowed this DBE, as it would in for any DBE, to enter the market place and succeed,” Torres said.

Tiefer, the contracting professor, said that while not illegal, the arrangement raises questions about how much control Alma Torres had over her company when she was initially hired by her son.

Per DBE rules, “It has to be owned and controlled by her and not him before he can seek a government contract,” Tiefer said.

The city cited unspecified “issues of control” when it revoked ART’s disadvantaged certification in 2010, before reinstating it on appeal. City officials said records from that dispute were unavailable.

Torres said the city was well aware of his arrangements with ART, and that city officials have commended his mother for her work.

“Alma Torres has the intelligence, work effort, and business skills to operate her own business, and had done so, and continues to do so,” he said.

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