February 26 2003

By A.C. Thompson

EVERYONE CALLED HIM "Carlos." It was the name on his fake ID.

A native of San Luís Potosí, a large city in central Mexico, he was born Miguel Moncada Ortiz. He was a short, lean 32-year-old whose steel-cable muscles and scarred hands betrayed the six years he'd spent laboring for a San Francisco company called 101 Roofing. The job afforded Ortiz a new Toyota minivan and a single room in a rundown flat on the 3700 block of Mission Street.

In the summer of 2000, he was engaged to be married to his longtime girlfriend, Zoila Menendez. He'd bought her a ring and a sleek ivory wedding dress. They dreamed of buying a house together.

The couple knew what everyone in the local roofing industry knew: the job could be a killer. "Often he'd come home injured and tell me, 'I almost fell,' " Menendez said. Ortiz wanted to buy a life-insurance policy, but Menendez talked him out of it; the superstitious side of her thought it would bring foul luck.

But bad luck found Ortiz anyway, at 200 Virginia Ave., about six blocks from home. It was 8:40 a.m. on July 26, 2000, and he was standing atop a four-story Bernal Heights house when the building's decaying roof collapsed, sending him plummeting to his death.

This is how investigators with the San Francisco Medical Examiner's Office described the final moments of Miguel Moncada Ortiz's life:

Ortiz, they wrote in their official report, "tied a rope about himself and secured the rope to an immovable point. He ventured to the edge of the roof. He tested the roof surface by bouncing on it. Apparently believing that the area was safe, he untied himself, took his hammer and began driving nails." Suddenly the wood gave way and he fell "to the concrete pavement surface below, but not before striking the erected metal scaffolding and a horizontal wooden cross member of a property dividing fence during his descent."

The 40-foot plunge did terrible things to Ortiz. It crushed his skull, embedding bone fragments in the right temporal lobe of his brain and setting off massive cerebral hemorrhaging. It caused severe trauma to his internal organs, filling his thoracic cavity with blood. The coroner listed "multiple blunt force injuries of the head and chest" as the cause of death.

By all appearances, it was a case study in how not to run a job site. Under Title 8 of the California Code of Regulations, employers are responsible for ensuring that employees are given proper safety equipment – and that they use it. According to the law, a roofer is supposed to wear a safety harness that clips onto a lifeline when treading on tall, steeply pitched roofs like the one Ortiz fell from. Made of superstrong nylon webbing, the harness wraps around the legs and torso and is similar to the gear used by rock climbers.

A rope slung around the waist does not qualify as an acceptable "personal fall restraint."

According to a California Occupational Safety and Health Administration (Cal/OSHA) report obtained by the Bay Guardian, a safety inspector who showed up at the scene admonished 101 Roofing owner Christie Binn Chung, telling him he had to make the well-being of his workers a priority. No, Chung allegedly replied, "money first, safety second."

In July 2002, after a two-year probe, the San Francisco District Attorney's Office filed a voluminous 52-count criminal indictment against 101 Roofing, Chung, and managers Dat Kham Ha and Bao Thien Luong. Charges include manslaughter (for the death of Ortiz), insurance fraud (for allegedly underpaying workers' compensation premiums by some $499,000), and tax fraud (for allegedly dodging more than $660,000 in state taxes). It was an unusual and courageous decision: as the New York Times recently reported, prosecutors rarely go after business owners for needless workplace deaths, even when there's ample evidence of criminal negligence.

"The magnitude and the flagrancy of the violations prompted us to act," assistant district attorney John Carbone, the lead prosecutor on the case, told us.

Chung and the others have pleaded not guilty. The trial is likely to start this spring.

But the looming courtroom drama is only one facet of the story. This was a tragedy foretold. At the time of Ortiz's death, 101 Roofing was already well known to Cal/OSHA inspectors, who had repeatedly fined the company for "willful" and "serious" violations of workplace-safety laws.

And although the city of San Francisco has an entire body of law designed to prevent public works jobs from going to unscrupulous construction firms, the city has handed 101 Roofing at least $166,000 in contracts since 1997.

Even the criminal charges haven't shut off the flow of public money: $59,000 of the taxpayer cash was awarded in the months since 101 Roofing was indicted.

Nasty work

101 Roofing is an undeniably cutthroat company in what – judging from interviews with workers and public officials, court records, and Cal/OSHA reports – is an increasingly cutthroat industry.

Squeezed by economic pressures, more and more roofing firms are deploying a simple cost-cutting strategy: they hire cheap laborers from the burgeoning immigrant underclass and jettison the safety training and equipment required by state and federal law.

Sal Botello, an organizer with the local Roofers and Waterproofers Union, can name "30 to 40" Bay Area companies that have adopted this business model. "I see it every day," he said with a sigh.

To understand the dynamics of this emerging gray-market economy, you have to spend time at the junction of Van Dyke Avenue and Ingalls Street, in the gritty industrial lowlands of Bayview-Hunters Point. Here, in the damp early-morning darkness between 5:30 a.m. and 6:30 a.m., you can find dozens of guys just like Ortiz looking for a day's work in the risky, exhausting, sometimes brutal roofing business. All are Latino. Most are Mexican. Few have the green cards that would give them legal permission to toil in the United States.

On a frigid winter morning in January, roughly three dozen workers fanned out in front of a greasy spoon (the broken sign reads, "CIT CAFE"), sipping coffee as an icy drizzle fell from a coal black sky. Across the street a clump of 10 or so men congregated on the corner. A forest green Toyota pickup truck slowed to a stop. A squat Asian man with a cell phone pressed to his ear stepped out. The man, either a contractor or foreperson, stabbed his finger three times at the throng. After a few moments of negotiation, three roofers piled into the pickup and headed off for the job site.

Even under the best conditions, roofing is harsh. On residential jobs roofers often climb up and down ladders shouldering 75-pound rolls of insulating felt or lugging 40-gallon plastic trash cans loaded with shingles and plywood shards. On commercial buildings with flat roofs, workers apply roofing asphalt, a thick, toxic, black tar that is cooked at 450 degrees and spread on like paint as a waterproofing agent.

But in the gray market things are even harsher. In interview after interview, workers described 19th century-like labor conditions at 101 Roofing and many other Bay Area firms. For these men there's no fixed hourly wage, no overtime, no medical insurance – not even workers' compensation. Safety measures are often nonexistent.

Many immigrant roofers will go home, after 8 or 10 or 12 hours spent doubled over, nail-gunning plywood and tacking down shingles, with $60 to $80. In the spectrum of day-labor wages, it's good money, but it's a fraction of the $35 an hour pocketed by entry-level union roofers.

According to a state labor department report obtained by the Bay Guardian, Chung told investigators that he paid "$70 to $90 per day per worker," mostly in cash.

One former 101 Roofing employee, who asked not to be named, told us he earned less, $60 daily.

"They were ripping us off. They make you work overtime but they don't pay you overtime. Most of the people who worked there didn't speak English, and they couldn't even complain about it," he recounted.

"Out of necessity workers accept a lot of abuse from the bosses," said Willie, a 49-year-old itinerant roofer who has done stints with 101 Roofing and several other companies. "I have a family. If I don't work, who's going to support them?"

Besides being physically grueling, roofing, as you might expect, is a tremendously dangerous occupation, one of the most hazardous jobs in the construction field. According to federal government data, 78 roofers died on the job nationwide during 2001, the most recent year for which statistics are available. Falls killed most.

Chung and 101 Roofing, some say, did little to improve the odds for its workers. "101 don't give you no training," the ex-employee said. "They don't give you a harness or belt. They just send you to work. I don't think they care at all."

For contractors, lifelines are costly. Veterans of the trade say it takes time to teach workers how to use the gear, time to anchor the ropes to a roof, and typically, more time to do a job when roofers are clipped in. Plus, many workers balk at wearing a safety harness. "A lot of roofers say they don't like it 'cause you're dragging a rope around all day," explained Steve Tucker, business agent for Roofers and Waterproofers Union, Local 40. Legally, however, "the contractor is responsible," he said. "It all goes back to the contractor. If you've got a guy who says he doesn't want to wear a harness, you send that guy home."

A textbook scam

Pinning down basic information about 101 Roofing is a challenge. Chung, a 53-year-old Korean immigrant, founded the outfit in 1986. He runs the business from a splotchily painted, 1950s-vintage sheet-metal warehouse on Wallace Avenue, just around the corner from Ingalls and Van Dyke. Beyond these facts, things quickly get murky. What are 101 Roofing's annual revenues? How many people are on the payroll? How much are employees getting paid?

Those answers depend on whom you ask.

Judging by Chung's state tax filings – copies of which are included in court papers – 101 Roofing has grown steadily, with the company's yearly income ballooning from $158,000 in 1988 to $1.2 million in 1999.

But prosecutors say Chung ran a textbook scam, shielding his company's true proceeds from the eyes of tax collectors by maintaining two sets of records – one bogus, one genuine. After seizing the company's computer files, raiding the office of private accountant David Y.S. Hwang, and poring over thousands of pages of bank transaction records, prosecutors charged that Chung had understated 101 Roofing's income over the years by a hefty $4.3 million.

On payroll-tax forms, Chung claimed 101 Roofing kept between 3 and 13 employees on staff at any given time. Prosecutors, however, put 101 Roofing's payroll at approximately 40 employees.

According to the prosecution, Chung's trusted employees were dispatched to a check-cashing stand in Oakland and a San Jose liquor store to launder checks from customers and hide 101 Roofing's true tax liability.

If those charges are accurate, it was a blue-collar book-cooking scheme – although Chung, unlike the disgraced corporate execs in the headlines these days, doesn't seem to have gotten rich from his purported financial machinations. He drives an aging 1990 Lexus. He lives in a heavily mortgaged townhouse on Wawona Street in San Francisco, which has been assessed at $396,000. The 101 Roofing warehouse, which is in his son's name, was purchased in 1995 for $400,000.

"Chung does not appear to lead a lavish lifestyle," assistant district attorney Carbone said before adding a caveat: "If he's sitting on a pile of cash, he could have it stashed anywhere."

The net effect of Chung's alleged financial scheming, according to the prosecutor, is that it allowed his company to save more than $1 million on taxes and insurance and therefore underbid rival firms on jobs. "It puts them at a huge competitive advantage," Carbone told us. "They're cheaper than everybody else."

Chung's attorney, Hugh Anthony Levine, barred us from interviewing his client and did not respond directly to a series of written questions regarding the allegations in this story.

However, in a short e-mail statement, the lawyer downplayed the financial charges. State tax and insurance officials, Levine wrote, didn't see "the necessity for criminal prosecution of 101 Roofing and Christie Chung until the death of Mr. Moncada-Ortiz. All issues regarding these agencies' disputes with 101 Roofing were being handled civilly, as is commonly the case with most businesses."

A catalog of safety problems

The Cal/OSHA inspectors who descended on Virginia Avenue when Ortiz died shouldn't have been particularly surprised by the gruesome tableau they encountered.

Cal/OSHA reports reviewed by the Bay Guardian show the company had been repeatedly busted by inspectors for a multitude of safety violations. At a job site on Lyon Street in 1996, inspectors found workers traversing a walkway consisting of one "10-inch [wide] plank" suspended approximately 20 feet above the ground. On a 1997 job scaffolding "was not erected in accordance with good engineering practice" – there were holes in the wooden walkways big enough for workers to fall through. The company was cited three times in four years for failing to provide workers with safety harnesses. According a 1999 inspection report, employees atop a 55-foot-tall building on Drumm Street were "working at the edge of the roof ... without fall protection."

Between 1996 and 1999, Cal/OSHA fined 101 Roofing a mere $8,120 for a total of 20 violations, many of them potentially lethal.

"Those fines," said Oakland lawyer Fran Schreiberg, a former top official at Cal/OSHA, "are nothing."

The company, which owns at least 12 vehicles, probably paid more in parking tickets.

Even after Ortiz's crumpled body was carted off, the company continued to break the law. In October 2000, Cal/OSHA inspectors once again discovered Chung's employees standing on top of a building without safety lines. Cal/OSHA documents show inspectors initially tallied up $80,150 for three flagrant offenses. But the fines were eventually knocked down to $10,850 – and 101 Roofing, which appealed the penalties, still hasn't paid a cent.

For some members of the workforce, Cal/OSHA is more rumor than reality. Aaron Clement has spent nine years in the Bay Area roofing industry and has never laid eyes on a safety inspector. Until recently, he told us, "I never even knew about OSHA."

That's not surprising, given the staffing levels at Cal/OSHA. The agency has 23 fewer safety inspectors today than it did a decade ago, even though the state's population has swelled by more than 5 million people.

Cal/OSHA spokesperson Dean Fryer acknowledged the agency's limited reach. "Cal/OSHA can only spot-check employers," he said. "We don't have an unlimited number of inspectors. We can't be at every job site."

Asked if Cal/OSHA could have prevented the death of Ortiz, Fryer told us, "I don't know if there's anything in our jurisdiction that we could've done. We can't be on the job site every hour of the day. That's why we referred this to the district attorney."

Your tax dollars at work

The company's long list of legal problems hasn't stopped it from feeding at the public trough. Documents obtained by the Bay Guardian indicate the city of San Francisco has handed 101 Roofing at least $166,000 in public works contracts and subcontracts since 1997.

That figure includes two contracts, worth a combined $59,000, that Chung has landed in the seven months since the indictments were announced. The contracts, awarded by the Recreation and Park Department, involve renovating a clubhouse at Rochambeau Playground and roofing a structure at a new park in the Mission District.

Why, we asked, is a company with such a lousy safety record still scoring juicy public contracts? "We're investigating to see if we can replace 101," responded Rec and Park spokesperson Becky Ballinger. "At this point they haven't been convicted, and I don't know if we can bar them from city jobs."

Construction firms doing work for the city are required by local ordinance to provide workers' compensation insurance and pay employees a minimum hourly wage, known as the "prevailing wage" in the trade. For roofers, that comes out $35 an hour, including benefits.

So how does Chung, who admits to paying $70 a day, manage to land city jobs?

We put that question to Donna Levitt at the Office of Labor Standards Enforcement, the local agency charged with overseeing city contracts. Noting that her office has only been in existence since April 2001, Levitt told us, "I think there may have been a lack of enforcement [of the prevailing wage law] before our office was created."

Obviously oversight is still spotty. Levitt wasn't aware of the two recent Rec and Park contracts.

In fact, because 101 Roofing is a minority-owned business it gets preferential treatment on city jobs under the terms of a problem-plagued affirmative action program administered the Human Rights Commission.

The situation incenses union leaders. "We ask the city to use reputable contractors, and they look at us like we're crazy," groused Tucker of the roofers union.

Life after death

In an e-mail statement, Chung's attorney said the company adheres to all safety regulations.

"Every 101 Roofing employee who goes onto a roof is provided with a safety harness, is instructed to utilize it, is trained in its usage, and is provided with access to written information about it in his native language," Levine wrote. "There is no advantage to 101 Roofing or Christie Chung if an employee works on a roof without his safety harness. The company owns the harnesses and they are available for every roofing job."

If they're available, they aren't always being utilized.

On a foreboding, gray afternoon in mid January, we dropped by a 101 Roofing job site, a well-manicured three-story apartment building at 3394-98 16th St. Most of the six employees present were stripping the peaked roof – roughly 30 feet up – down to the ribs, tearing off old green shingles and sheathing. One man was using a circular saw to cut a four-by-eight-foot sheet of plywood to size. Another, in a black sweatshirt and a leather tool belt, was scampering along the spine.

Not a single one was wearing a safety harness.

Translation assistance by Camille T. Taiara and David Martinez.