US: Cited firm gets big security contract; Violations won't sour $323 million deal

A Hammond security company that admitted to several "serious" state violations, including hiring an underage officer, has been awarded a large federal contract to provide private security officers at FEMA trailer parks in metro New Orleans.

Inner Parish Security Corp., which could earn more than $323 million, received the contract from the Federal Emergency Management Agency on June 19. FEMA awarded a similar $196 million contract to Knight Protective Services of Maryland to oversee sites in the Baton Rouge area. Both contracts could last until 2012.

The companies will provide armed security officers at 45 temporary trailer parks in East Baton Rouge, Calcasieu, Cameron, St. John the Baptist, Orleans, Jefferson, Plaquemines and St. Bernard parishes, FEMA spokeswoman Rachel Rodi said. Rodi did not know which company was responsible for which parishes.

Inner Parish's contract comes after the Louisiana Board of Private Security Examiners cited the company in November 2006 and in May for training and hiring violations.

The company admitted the violations, including inadequate firearms training for 11 security officers, arming a guard untrained in firearms handling and hiring a teenager as a security officer despite a state law that requires armed guards be 21, according to documents provided by the state board. Knight Protective Services has not had any serious violations in the past year, although the company was cited for having officers wear batons without correct certification, officials said.

Inner Parish and its employees were ordered to pay $12,000 in fines and several employees were placed on six-month probation after a November hearing. In April, a $2,650 fine was assessed and the company was placed on one year probation by the state board, according to documents.

The firm will appeal the board's probation decision at the board's Aug. 31 meeting, said Wayne Rogillio, executive secretary for the state Board of Private Security Examiners. The one-year probation will not apply to the company until the hearing is held and the board makes a final decision, he said.

Owner Mark Leto Sr. said the violations were caused by "human error" during the firm's rapid growth after Hurricane Katrina, and his company has improved its policies to ensure that the same violations do not occur again.

If the probation ruling stands, Inner Parish's license will not be affected, although it will be required to submit to an audit during the next year, Rogillio said. Meanwhile, FEMA spokesman Ronnie Simpson said Inner Parish was not required to reveal any violations when it sought the contract and it would not lose the contract unless its violations affected its license.

While probation won't affect the company's license, Inner Parish's violations were considered serious because they involved firearms training or safety, Rogillio said. He said that every security company in the state has violated state guidelines at some time, but the vast majority of those violations involve matters that can be handled internally.

"If it's serious enough for me to bring (the company) before the board, it's serious," Rogillio said.

The violations include:

-- In January, a state investigator found an Inner Parish guard on armed security detail at an Amite casino despite having never taken any firearms training. When questioned about why she was armed, the woman said she was scheduled to do her firearms training later that week, according to board documents. Another guard told the investigator that it was the woman's first day on the job.

-- In December, the company trained and employed a 19-year-old woman as a guard for a month, before state officials realized she was underage and notified the company. Leto said the woman's age was not checked by the recruiter who recommended her, and the oversight has been corrected.

-- In 2006 the company offered "abbreviated" training to several security officers that neglected to include training on weapons safety, range safety, when deadly force should be used or the rules of engagement, all of which are required by state law. Rogillio also said that no scores were kept during firearms accuracy examinations. Several security officers told the board they received truncated classroom training and were told by an instructor to ask officers around them if they did not know the answers to tests given as a part of that training, Rogillio said.

Leto said the probation status would unfairly label the company as it does not affect the validity of its license. He said the $2,650 fine assessed in April was not in line with fines assessed by the board for similar violations by other companies. That fine was for violations involving the underage officer and the untrained armed officer. Leto said that he would be willing to pay the fine if probation was not attached to it.

Leto said the violations were unintentional and were the result of the firm's rapid expansion after the storm. The company doubled in size to about 550 employees and has enjoyed a great reputation, he said.

"It wasn't anything malicious on our part," said Leto, adding that his company had to train roughly 1,500 people to reach its current size and will have to hire 450 more officers to handle the FEMA contract. Leto noted security officers have a high turnover rate, which means new people are constantly working for his company.

"Any time a company has employees, employees can do something wrong," he said.

However, at least one former employee told the state that the firm's training violations occurred because company officials were trying to position the firm to compete for the FEMA contract.

That instructor, who has since left the company, said that in November officials pressured him to abbreviate the training so that guards could be trained faster. The shorter training, which was first reported by the people being trained, included reducing the timeframe of some instruction and completely ignoring other requirements, according to documents provided by the state board.

Leto said the changes to the coursework were done without his knowledge or approval, although his son Mark Leto Jr. was one of the instructors offering abbreviated courses. The senior Leto said all of the instructors involved have paid their fines.

Inner Parish will be paid up to $5.19 million from July 16 through Aug. 31 to provide the guards, and the company could then be paid as much as $318 million to provide guards until June 2012, Rodi said. Knight will be paid up to $865,000 until Aug. 31 and up to $194.5 million until 2012. Rodi said it is unlikely either company will be paid the full amount of their contracts, because most trailer sites should be removed or reduced in size before 2012.

However, the contracts can be applied to any natural disasters that occur within the contract's term. Before being awarded the main FEMA contract, Inner Parish Security served as a subcontractor under the previous contract.

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