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Congressional subcommittee criticizes San Antonio company in new report

CRE8AD8 food boxes at a June 20 Distribution by Cornerstone Church.
Paul Flahive
Texas Public Radio
CRE8AD8 food boxes at a June 20 Distribution by Cornerstone Church.

A congressional investigation has called out a San Antonio wedding planning company in a new report.

San Antonio CRE8AD8 was one of three companies singled out in the reportfrom the congressional Democrats on the Coronavirus Crisis Subcommittee about the Farmers to Families Food Box Program. Committee members called the company underqualified to receive the contract. They questioned CRE8AD8 payments made to contracted vendors and accused the poorly structured program of incentivizing vendors to waste food.

Yegg and Ben Holtz Consulting were both also called out by the report.

Yegg reportedly charged the government as much as $5 per gallon of milk and gave nearly $3 million in food boxes to a nonprofit run by the Yegg CEO, George Egbuonu. The report details how CRE8AD8 made as much as 25% profit on its contract.

TPR reported extensively on the company last year as it failed to distribute food to many parts of the state and failed to deliver one in five of its contracted food boxes to families.

The company appeared to mislead USDA about its connections within the food bank community in order to get the contract, according to emails TPR gathered through the Freedom of Information Act. CRE8AD8 CEO Greg Palomino has denied that charge.

The report says Famers to Families overpaid for food, that USDA provided inadequate oversight and that the Trump administration used the food box program to score political points. A letter from the president was included in the boxes throughout last summer which the report called a violation of the Hatch Act.

CRE8AD8 was given more than $30 million, but the report questioned several purported deliveries. Two deliveries at a cost of $300,000 appeared to go to a for-profit cold storage company. Other deliveries — in the case of both CRE8AD8 and Yegg — were signed for despite the signee not being present at delivery.

The report also said the USDA failed to review deliveries and contractor performance.

The documents produced by USDA for first-round contractors do not include audit files for either Yegg or CRE8AD8, despite their sizable contracts and the multiple irregularities identified in this report.

CRE8AD8 and Yegg were both dropped from subsequent rounds of the Farmers to Families Food Box Program. Ben Holtz Consulting had its award withdrawn within a few weeks of the initial contract award last spring. Farmers to Families was canceled by the Biden administration.

Congressional democrats on the subcommittee asked for the USDA office of inspector general to investigate the program further for cases of potential fraud.

“To the extent that OIG uncovers evidence of fraud or other unlawful activity, it should refer that evidence to appropriate law enforcement agencies for further action,” reads the report.

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Paul Flahive can be reached at Paul@tpr.org