A Peabody company that painted Mitt Romney's Belmont mansion in recent months is under investigation by state authorities for dodging labor laws and accused of relying on subcontractors that exploited workers, including illegal immigrants.
Romney hired Olympic Painting and Roofing to paint the salmon-colored house in August and the work was completed in October, according to Olympic. The company was the subject of a 2005 front-page article in the Globe saying that the state attorney general's office was investigating allegations that Olympic failed to pay overtime and other obligations through a system that misclassified workers as subcontractors instead of regular employees.
In addition, union leaders and a worker interviewed in 2005 complained in the article that the nonunion company and others in the construction industry boosted their workforce with low-paid workers, often undocumented immigrants, hired through independent contractors to avoid paying taxes and other expenses.
This fall, Globe reporters observed Olympic workers and signs on Romney's grounds while reporting on the former governor's use of a Chelsea landscaping company, Community Lawn Service with a Heart, that employed illegal immigrants.
Romney fired the lawn company Tuesday, hours after the Globe raised questions about the firm.
In interviews this week, Olympic President George Vasiliades said that his company did not employ illegal immigrants at Romney's house - or anyplace else. All workers sent to Romney's home were company employees - not subcontractors - with legal documents, he said, adding that the company obeys state and federal laws.
Romney's association with a second company with a tainted record, including allegations that it, too, relies on the underground economy that uses illegal immigrants, poses an awkward contrast to his increasing calls on the presidential campaign trail to curtail illegal immigration.
It is unclear whether Romney was aware of Olympic's record before he hired the company.
On Wednesday, Romney spokesman Eric Fehrnstrom dismissed questions about Romney's hiring of Olympic as "ridiculous" and "the worst kind of guilt by association."
"Governor Romney expects that contractors will comply with the law," Fehrnstrom said in a statement.
Sitting in his Peabody office this week, Vasiliades acknowledged his company's controversies and expressed surprise that he had not been contacted earlier by the media for working at Romney's house. He said getting the job at the Romney mansion was a chance for Olympic to improve its reputation.
Vasiliades said his company never dealt directly with Romney, but an employee spoke with his wife, Ann, and a man whose name he did not recall. His employees painted the outside of Romney's mansion and repaired wooden railings, shutters, and steps.
"I'm glad he hired me so I could prove to the world that I'm not doing anything wrong," he said. "We were psyched. If he's ever president, I painted his house."
Olympic has faced a number of issues in the past:
In 1998, Vasiliades pleaded guilty to workers' compensation fraud charges and failing to pay unemployment tax contributions. He also admitted to nonpayment of wages and failing to keep accurate and true payroll records, according to the attorney general's office. He was sentenced to one year probation, and ordered to pay a $250 fine, court costs, and $4,880 in restitution to three employees.
Olympic is currently under investigation by the attorney general's office for allegedly paying numerous workers off the books, as detailed in the 2005 Globe article.
According to the allegations, Olympic made payments to bona fide workers, who, in turn, wrote personal checks to the workers who were off the books.
This system allegedly helped the company avoid extra expenses, such as overtime, workers' compensation insurance, and other obligations.
Vasiliades said he did pay workers' compensation insurance and payroll taxes, and that he expects the state investigation to wrap up soon without criminal charges.
"We pay our taxes," he said. "We pay our payroll. We do everything right."
Olympic is also part of a federal investigation into the Aug. 31 death of Benedelso Ovalle of Lynn, who fell from a 2 1/2-story church in Salem while working for an Olympic subcontractor, BC Construction.
The federal Occupational Safety and Health Administration is investigating what responsibility, if any, Olympic or BC Construction had in the death, said OSHA spokesman John Chavez.
Ovalle was a 17-year-old illegal immigrant from Guatemala, according to his family's lawyer, Anne Gugino Carrigan of Lynn, and his sister, who asked not to be named because she is also here illegally. Another BC Construction worker, who was present during the accident, confirmed to the Globe on condition of anonymity that he is also in the country illegally.
According to the Salem police report, Ovalle was not wearing a safety harness before he fell, and neither were two of five other workers at the scene.
Vasiliades said Olympic is not responsible for Ovalle's death or verifying his legal status, because Ovalle worked for BC Construction. Olympic is the general contractor in charge of the job.
BC Construction owner Branor Castro did not return telephone calls yesterday.
Mark Erlich, executive secretary treasurer of the New England Regional Council of Carpenters, said the construction industry's dependence on the underground economy is pervasive throughout Massachusetts and illustrates the need for a comprehensive immigration reform package.
"There should be less of a focus on immigrant bashing and more of a focus on employers who are benefiting from a broken immigration system," Erlich said.