Guess Who's Coming to Dinner? The Mob!

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.

[thistle homepage] [Volume 9] [9.13 - contents]