Food Fight Hiccup

Will four felonies spoil Four Families' Hobby deal?

Just when you thought the battle for that lucrative City of Houston food and beverage concession at Hobby Airport had been conclusively settled in favor of the homegrown Four Families team, along comes a little security situation.

The dominant corporate player on the Four Families consortium, Pappas Restaurants, may have difficulty qualifying for access to Houston airports under tightened regulations being promulgated by the federal Transportation and Security Administration (TSA) as part of the war on terrorism. The reason is that Pappas Partners L.P. pleaded guilty to four federal felony counts in 1998 in Dallas for shielding, concealing and harboring undocumented workers.

As part of the plea, the company agreed to pay a record $1.75 million fine. The company and each of its 54 restaurants also entered into a memorandum of understanding to participate in the Immigration and Naturalization Service Worker Verification Program for three years.

Pappas's past turns into a potential problem.
Pappas's past turns into a potential problem.

City of Houston Aviation Department spokesman Ernie DeSoto says the tough new security regulations mandate that no one with felony convictions in the past ten years can be employed at the airport. DeSoto says that in response to The Insider's questions about Pappas's eligibility, aviation officials are turning to Washington for clarification.

"You can't work here if you've got a felony conviction," notes DeSoto. "But the way the regulation is written is more toward the individual than the company. Transportation and Security has to give us a good ruling on this, because this is something new to us…"

An airport work application specifies a disqualifying felony as one involving "dishonesty, fraud or misrepresentation."

DeSoto notes that the recent Operation Tarmac by the U.S. attorney's office in Houston netted 143 undocumented workers at Bush Intercontinental Airport. They had phony ID cards and were working in what had previously been considered low-security areas. As a result of post-9/11 measures, concessionaires and their employees will now be subject to much more comprehensive screenings.

"Before, people like myself who had access to secure areas had to go through extensive background checks, fingerprinting and everything else," explains DeSoto. "Now, what's going to happen is everybody, even the lady who sells popcorn on the concourse, is going to have to go through that. Things have changed, and the way we looked at things a year ago is different than we look at them now."

Critics of Operation Tarmac charged that the Justice Department was staging photo ops and rounding up undocumented workers with minor violations under the guise of cracking down on terrorism.

A Pappas spokesman says that because the Pappas participant in the Four Families deal is a different corporate entity from the company that pleaded guilty in Dallas, it will have no effect on the company's access to Hobby Airport.

"The company that owns the piece of Four Families is Pappas Restaurant Inc.," says Bill Miller. "They have no criminal record, and neither do Chris and Harris Pappas, so there will not be a problem."

The specific restaurants involved in the Dallas litigation were Pappasito's Mexican Cantina and Pappas Bros. Bar-B-Q Dallas. The entity that paid the fine was Houston-based Pappas Partners. Chris Pappas is one of those partners.

In a suit last year by a nonprofit group over the Americans with Disabilities Act, both Pappas Restaurants Inc. and Pappas Partners L.P. were co-defendants, indicating their close relationship.

Miller says that Pappas principals got their first walk-through of the Hobby facilities last week and will undergo the same security screening as cooks and other employees who work at Pappas concessions.

Asked whether the company has attempted to clarify its security standing with TSA officials, Miller replied, "You're the first person to raise this."

When Pappas pleaded guilty in 1998, the U.S. attorney's office in Dallas issued a fact statement detailing how company managers surreptitiously rehired illegal aliens that had been arrested at its restaurants. To avoid federal inspectors, managers juggled the undocumented workers' schedules and went so far as to hide them when INS officers staged unannounced inspections.

During federal officers' search of a Pappas restaurant in 1995, according to the statement, an undocumented worker "concealed himself in a walk-in cooler. When INS agents departed from the restaurant, [the worker] abandoned his hiding place and 'Pappas' instructed him to return to work."

In one particularly blatant case, an undocumented worker named Oscar Pineda-Molina was arrested at a Dallas Pappasito's and was deported to Mexico. Within days, he was back in Dallas to collect his paycheck and seek re-employment. The chain moved him to another restaurant but required he assume the name of Jorge Campos in order to be rehired. Pappas managers altered records to reflect the new identity, and in a subsequent INS raid they hid him in a false ceiling in the restaurant. When the agents departed, they instructed Pineda-Molina to get back to work.

The case against Pappas began with several restaurant searches by INS in San Antonio in 1993 and the levying of a $14,000 fine. The Dallas U.S. attorney then joined forces with the INS and conducted a three-year investigation that concluded with the guilty pleas and the record-setting fine.

"If you can't take the heat of prosecution," commented then-U.S. attorney Paul Coggins, "get your unauthorized workers out of the kitchen or any part of the workplace. This prosecution will have ramifications far beyond the restaurant industry and far beyond the Dallas-Fort Worth area." The ripples have now reached Houston.

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