A federal investigation is ongoing after a raid by the FBI and federal transportation officials in July at the Galleria building, 8534 Yankee St. The building houses the headquarters of TesTech and David and Shery Oakeses’ CESO Inc., a civil engineering firm; and Design Homes and Development Co., which develops luxury homes.
The state and federal transportation departments last year moved to strip DBE certification from TesTech, which has won millions of dollars in federally funded contracts through the program. In the Dec. 16 letter to Aziz, ODOT cited evidence that TesTech was actually owned and controlled by the Oakeses, who are wealthy Washington Twp. business owners not eligible for the DBE program.
“Due to evolving circumstances and new information — including many of the issues pointed out by a recent Dayton Daily News investigation — ODOT is pursuing a new approach to decertify TesTech from the DBE program,” said spokesman Steve Faulkner. “We are hopeful that our strategy will result in TesTech’s complete removal once and for all, and help us maintain program integrity for other DBE participants.”
Aziz has 30 days from receipt of the letter to appeal.
In a prepared statement Friday, Aziz said, “We are outraged by ODOT’s attempt to use illegal, inappropriate and unethical tactics to discredit TesTech. We believe ODOT has taken this approach because it knows that it has no legal grounds to decertify our company.”
Aziz said he is the true owner of TesTech and meets all the requirements of the DBE program. “We can and will defend ourselves against these baseless claims.”
The Oakeses’ attorney, David Reed, declined to comment.
Meanwhile, Dayton Public Schools officials have replaced TesTech with another consultant on several projects involving asbestos abatement in school buildings targeted for demolition, said John Carr, the schools’ building chief.
“We took them off three or four jobs before they got started, (jobs valued at) probably a couple hundred thousand dollars,” Carr said. “We’re not using them for any new work.”
The DBE program is intended to redress discrimination in construction trades and is open to small businesses owned by economically and socially disadvantaged people, including women and members of certain minority groups, whose personal net worth doesn’t exceed $1.3 million.
Aziz was twice rejected for the program by state transportation officials who administer it in Ohio for the U.S. Department of Transportation. In 2005 TesTech won DBE status on appeal after a hearing officer accepted Aziz’s argument that he was an “African-American” because he could trace his ancestry through his religion to an ancient African Nubian tribe. Egyptian-Americans like Aziz and Shery Oakes are not recognized minorities under the program.
The federal government has cracked down in recent years on abuse of set-asides like the DBE program.
An ODOT official said in a letter last March that TesTech would be decertified because it appears Aziz is not a member of a recognized minority group, makes too much money to qualify and wasn’t the true majority owner of TesTech. Aziz appealed and then applied for continued certification, which ODOT is now denying.
A Daily News investigation last year found documents in three states and a pattern of activities raising questions about the true ownership of TesTech. The investigation found multiple public records connecting the Oakeses with TesTech.
The investigation found:
• At the same time Aziz was seeking DBE certification in 2004 and telling ODOT he was the sole owner of TesTech since its founding in 1997, Shery Oakes was telling the Ohio Department of Development that she and David Oakes owned the company, according to state and Montgomery County records.
• Shery Oakes also was twice listed on 2007 campaign finance reports as TesTech’s owner.
• The name TesTech appears interchangeably with CESO Testing Technology and CESO Inc. in documents the companies filed with government entities. David Oakes’ now-defunct CESO Testing Technology did business under the TesTech name in Ohio for years, although never registered as such.
• In Michigan, Oakes’ CESO Inc. began doing business as TesTech in 2001, with Aziz serving as an officer of the company through 2011. Aziz incorporated TesTech in Michigan in 2006 but failed to file required annual financial reports until June 2011. That same month — just weeks before the FBI raid in Ohio — Oakes terminated CESO’s use of the TesTech name in Michigan.
• In multiple filings with the state, Aziz said TesTech did not have a parent company and had never done business under another name, the Daily News found. The DBE program requires that participating companies be independent of any other business.
In the Dec. 16 letter to Aziz, ODOT Deputy Director of Construction Management Megan O’Callaghan outlined evidence she said shows TesTech and CESO Testing Technology were “indistinguishable.” She pointed to documents, first unearthed in the Daily News investigation, which show that CESO Testing Technology held the licenses for equipment that was needed for TesTech to do its work. In some cases, Oakes signed letters to government agencies representing himself as president on TesTech letterhead. The documents suggest “TesTech is an alter ego of CESO Testing Technology” and there is “only one real company,” O’Callaghan wrote.
The state found that the certificate of liability insurance required for a 2007 ODOT project showed CESO and TesTech shared insurance coverage and that TesTech shared a 2008 certificate of liability insurance with CESO Testing Technology, according to O’Callaghan’s letter.
ODOT also cited newspaper stories over the years in which Shery Oakes said she and David Oakes owned TesTech.
“Statements made years ago in newspaper articles are not proof of anything,” Aziz said in his prepared statement.
The Daily News investigation prompted the U.S. Small Business Administration and the Ohio Department of Administrative Services to investigate TesTech’s compliance with other minority set aside certifications Aziz obtained.
ODAS oversees TesTech’s certifications in the Minority Business Enterprise and Encouraging Diversity Growth and Equity government contract set-aside programs. Molly O’Reilly, spokeswoman for ODAS, said Aziz was asked to submit documentation and new applications to maintain those certifications, but an attorney for Aziz declined to provide documents requested by the agency by the Dec. 30 deadline.
“We are now considering the next appropriate course of action, including whether to revoke TesTech’s certifications,” O’Reilly said.
Contact these reporters at (937) 225-2264 or tbeyerlein@daytondaily news.com or (937) 225-7455 or lhulsey@daytondailynews.com.
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