- The Washington Times - Monday, November 28, 2005

The D.C. government has awarded a no-bid contract to a janitorial business tied up in tax liens worth hundreds of thousands of dollars and linked to the local company that provides security in most city buildings and public schools, government records show.

City officials awarded a $641,000 contract for janitorial services to Designmark Services Inc. on Nov. 1.

The contract, issued on a sole-source basis, was awarded one month after the Internal Revenue Service had filed a tax lien for the second time this year against Designmark.

The IRS’ Sept. 1 lien against Designmark showed $88,921 in unpaid taxes during the first quarter of 2005. In March, the IRS filed a lien totaling more than $325,000 for unpaid taxes since 2000, according to documents at the D.C. Office of the Recorder of the Deeds.

Designmark’s financial troubles have occurred while city officials and the company’s top executives have faced questions about the finances of Hawk One Security Inc., a separate firm that shares the same Northwest address and top executives as Designmark, city records show.

Hawk One began a two-year contract for about $30 million in July to provide hundreds of private guards in D.C. public schools. The company also holds a separate contract worth about $14 million to provide security in dozens of city government buildings.

Contracting officials yesterday said they knew about Designmark’s tax problems in August, when the IRS told them about an arrangement for the company to pay its debt.

“The Designmark Inc. contract is a bridge contract issued … for services to continue until the awarding of a new contract,” said Janis Bolt, a spokeswoman for the D.C. Office of Contracting and Procurement.

Neither Hawk One nor Designmark officials returned phone calls yesterday.

Some school officials earlier this year expressed concern about Hawk One’s financial stability after complaints from guards about not being paid on time and a background check by the city’s contracting office that showed tax liens.

The company has blamed the bounced checks to its employees on an accounting mix-up, saying Hawk One is on solid financial footing.

It also has said its tax liens were incurred under previous management more than a decade ago.

City officials generally have given Hawk One good marks.

Edward D. Reiskin, deputy mayor for public safety and justice, said yesterday that the Metropolitan Police Department “is satisfied with the performance of Hawk One.”

Designmark and Hawk One are separate but closely related companies.

They are based in the same offices on H Street in Northwest and on Martin Luther King Avenue in Southeast and share the same top executives, city and court records show.

Patrick McRae is president of Designmark, and Tyrone Thompson serves as its registered agent and vice president, records show.

Mr. Thompson is Hawk One’s president, and Mr. McRae has identified himself in a previous interview as the security company’s senior executive officer.

In addition, the companies were named in several of the same lawsuits in recent years, including one in which Aetna Healthcare Inc. sued Mr. Thompson under civil provisions of the Racketeer Influenced and Corrupt Organizations (RICO) Act during the late 1990s.

In its lawsuit, the health insurance company said Hawk One was created as a shell entity to obtain cheaper workers’ compensation insurance for other, interrelated companies.

Attorneys for Mr. Thompson denied any improper activities, and the lawsuit was settled out of court in 2001.

Mr. Thompson also faces a recent lawsuit filed in D.C. Superior Court by Sherry Drake, who was married to Hawk One’s late founder and previous owner, Carthur Drake.

The lawsuit states that Hawk One officials intentionally left open some IRS tax liens because closing out the debts would have triggered a settlement deal, in which officials would have had to hand over cash and property to Mrs. Drake.

However, a former attorney for Mr. Drake has sought to dismiss the complaint, saying the lawsuit stemmed from dissatisfaction over the terms of Mr. Drake’s estate.

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