By Patrick Burkart, Travis Donoho, and Paul Odekirk
This month MIT must decide whether to renew its contract with an unscrupulous and lawbreaking dining services provider. Aramark, formerly ARA, is a multibillion dollar mammoth, operating various services illegally throughout the world. Aramark currently operates at MIT, Boston University, and numerous other college campuses across the country; it is one of the top three food service providers in the U.S. For years, Aramark has committed and admitted to unfair and illegal trading practices, including violating federal anti-trust laws. Also, Aramark has been suspected of having massive organized crime connections in its transportation and vending-machine divisions. The food service giant first got into trouble with the law in 1964, when the Federal Trade Commission (FTC) negotiated a consent order in which ARA did not acknowledge guilt, but agreed anyway to dispose of some of its vending machine companies worth an annual $7.7 million. Again, in 1973, ARA accepted another FTC consent order, this one requiring disposal of the vending and periodical companies that it owned. On top of that, ARA had to pledge to stay out of certain markets delimited by the FTC. In 1979, the FTC successfully pressed for and won a $300,000 civil penalty against ARA after the company was found guilty of violating the terms of the 1973 agreement. This penalty also required ARA to dispose of some of its business assets. ARA was also fined an additional $80,000 in 1973 for conspiracy to fix cigarette prices in Cincinnati. In 1977, ARA admitted to making questionable and sometimes illegal payments between 1970 and 1976, according to a Securities and Exchange Commission (SEC) report. A total of $393,000 in payments were made to politicians and "client related" recipients who were influential in handing over state contracts to ARA. Also, ARA admitted receiving $504,000 in questionable and sometimes illegal rebates from 1970 to 1976. ARA made $23,400 in political campaign contributions that the company itself reported to the SEC as illegal, and another $11,550 in legal but improperly recorded campaign contributions. "Disbursements and gifts" to "client related persons" amounted to $370,000 during the same 1970-1976 period. The SEC investigated ARA without recommending action in 1982. The next year, Gerald F. O'Leary, a member of the Boston School Committee, pleaded guilty to extortion of $50,000 from ARA in return for awarding ARA a $40 million dollar contract. A mental retardation center owned by Aramark was decertified in Texas, and the company has paid large fines for failing to meet nursing home standards in Texas and California. In Colorado, ARA nursing home abuses were described by an assistant state attorney as "the most severe disregard of patient care of any case to my knowledge." A 1992 Colorado case brought by the state against ARA charged the corporate giant with violating nursing home standards in order to cut costs. Back in Texas, ARA fought accusations that daily health reports were routinely falsified, that bedridden patients were seldom turned over and as a result developed painful bedsores, and that three nights of every week 90 of their patients were under the care of an intoxicated nurse. Aramark also has a reputation for engaging in unfair business practices. A former Executive Vice President of ARA's transportation division testified in a Hawaii court that ARA conspired to kill competition by submitting below-cost bids to clinch a contract, with the intention of raising prices once the competition had gone out of business. According to The Wall Street Journal, Aramark also has links to organized crime. Reportedly, Aramark paid an ex-FBI agent-and former ARA employee - $167,000 plus lawyers' fees out of court not to discuss his deposition, which highlights the dining service corporation's organized crime connections. Sources: Passing the Bucks: The Contracting Out of Public Services (AFSCME), The Wall Street Journal. This article is adapted from an earlier version that appeared in (sub)Tex, an underground newspaper publishing out of Austin, Texas.