Fired For Exposing CPS

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http://www.detnews.com/2005/specialr...A01-212531.htm
Former MI Auditor Gen fired for helping FBI expose CPS








Todd McInturf / The Detroit News



*Residents of the Wolverine Secure Treatment Facility in Saginaw are led
*through the gym. Wayne County Chief Circuit Judge Mary Beth Kelly says she's
*concerned about the juvenile justice system and how its finances are managed.

*Juvenile system under fire




*Audits of privatized Wayne County program show overpayments, conflicts of
*interest.



*Byoel Kurth / The Detroit News

*Todd McInturf / The Detroit News




*Former Wayne County Auditor General Brendan Dunleavy says he was let go for
*helping the FBI investigate financial mismanagement in the juvenile justice
*system. Below is an excerpt of his deposition.

*What The Detroit News found
*o Audits have found more than $300,000 in overpayments to contractors.
*o Hackers accessed a computer system used to verify bills.
*o Relatives of some county officials benefited from contracts.
*o Allegations persist of payments for fictitious youths.
*Resources
*Wayne County's Delinquency Wraparound Services - A Guide for Parents
*Assistance for families with children that are wards of the state and
*emotionally challenged, exhibiting delinquent behavior or those in danger of
*out-of-home placement
*Wayne County's Institute for Youth and Family Development Policy
*Related links to community organizations and family services
*The Juvenile Assessment Center
*The Juvenile Justice Delinquency Prevention Act
*Related Articles
*Juvenile justice system gets a warning
*Wayne judge vows to end the program that empowers private firms to provide
*treatment for young criminals
*Fund cuts imperil youths
*Wayne County trims high-level services for kids who are in trouble
*Crisis threatens juvenile justice
*Wayne County faces financial crunch due to 15% cut in budget
*Macomb youth hall license hits snag
*How young is too young to be tried as an adult for murder?

*Todd McInturf / The Detroit News
*Former Wayne County Auditor General Brendan Dunleavy says he was let go for
*helping the FBI investigate financial mismanagement in the juvenile justice
*system.

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*Five years after Wayne County became the first in Michigan to hire private
*companies to care for delinquent youths, its juvenile justice system is awash
*in accusations of financial mismanagement, cronyism and fraud.
*Taxpayers have footed the bill for improper billings and overpayments to
*contractors. The relatives of elected county officials have benefited from some
*contracts. And there are multiple allegations the county paid for hundreds of
*fictitious youths.
*Two former high-ranking county officials allege in court papers they lost
*their jobs after serving as informants for the FBI. Both have filed
*whistle-blower suits against the county, alleging retaliation for speaking out and
*seeking unspecified damages.
*Chief Circuit Judge Mary Beth Kelly, who has oversight of the system, vows
*major reforms by year's end, citing concerns about the system's effectiveness
*and how its finances are managed.
*"There has to be more accountability within the system," Kelly said. "We
*just can't afford this."
*Three county audits, a probe by the county inspector general and a Detroit
*News investigation show:
*o County taxpayers have paid more than $2 million for contracts that have
*benefited relatives of Sheriff Warren Evans and Detroit Mayor Kwame Kilpatrick.
*o Hackers compromised a $2.5 million computer program that records personal
*information about teens and is used for billing, prompting an investigation
*into whether taxpayers spent money on fictitious teens. Separately, there are
*allegations the county paid contractors at least $198,000 for youths who
*don't exist.
*o Nonprofits awarded millions of dollars in delinquent care contracts by the
*County Commission are among the most reliable campaign donors to its
*members. Contractors have given at least $32,000 since 2002, campaign records show.

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*The top recipient was Commission Chairwoman Jewel Ware, who received at least
*$12,500. A typical commission campaign costs about $10,000.
*o The county can no longer borrow money without the state's permission
*because of a series of problems that began with $12 million in billing
*irregularities.
*o Taxpayers have footed the bill for at least $300,000 in overpayments to
*contractors.
*o The county has issued at least $20 million in no-bid contracts to care for
*youths since 2000.
*Many of the problems started under the administration of county Executive
*Edward McNamara. Some have been addressed by his successor, Robert Ficano, who
*took office in January 2003. But others are just now unfolding.
*"Has he cleaned it up? Probably," said Robert Wollack, chief executive
*officer of Wolverine Human Services, which owns youth lockups in Saginaw and
*Vassar. "They're working hard to get whatever's wrong right, but there's still
*stuff that can be straightened out."
*Arthur Carter, director of the county's Department of Children and Family
*Services, acknowledges problems, but says the $103 million program has improved
*care for the county's 3,400 delinquents dramatically.
*Seven years ago, about 60 percent of teens who committed crimes and were
*declared delinquents by juvenile courts were sent to lockups. Because of a state
*shortage of juvenile facilities, many were institutionalized out of state
*even for lesser offenses.
*Today, about 60 percent of Wayne County's delinquents -- who account for
*half the state's delinquent population -- serve their sentences at home, under
*the supervision of contractors. Only the worst offenders are sent to youth
*jails.
*The county maintains it has saved $10 million under the new system and cut
*recidivism rates. The system's cost is split evenly between the county and
*state.
*"This has been one of the county's most serious, complex problems. The
*problem stems from a lack of cash and trying to do with what you have," said
*McNamara, declining further comment.
*Former officials sue
*No one disputes the county is saving money under the new system, but Kelly
*and others wonder whether it's enough.
*Even with a privatized system that favors home treatment, Wayne County
*spends almost as much per youth as the national average for incarcerating one
*delinquent in a juvenile facility for a year. The county spends an average of
*$30,000 a year per youth to pay for drug tests, tethers, counseling, monitoring
*and, sometimes, youth detention.
*Nationally, the average cost to incarcerate a delinquent in a juvenile jail
*for a year is $35,000, according to the U.S. Department of Justice.
*"The amount of money thrown at the system and layers and layers of
*administration is astronomical," Brendan Dunleavy, the county's former auditor
*general, said in an interview with The News.
*Dunleavy, who was auditor general for seven years, is suing the county in
*state and federal courts, alleging his $152,000 contract wasn't renewed because
*he cooperated with the FBI on numerous investigations, including one about
*the juvenile justice system.
*Marlene "Willow" Hagans, the former deputy director of Children and Family
*Services, is also suing, alleging she was demoted after talking to the FBI and
*angering Ficano's campaign contributors by advocating reforms.
*Both lawsuits are in the discovery phase, in which lawyers gather evidence
*and take testimony from witnesses in depositions. On Friday, county attorneys
*filed a motion to dismiss Dunleavy's case.
*Hagans refused to comment, but The Detroit News obtained the depositions
*taken in both lawsuits. (Below is an excerpt of Dunleavy's deposition.)

*In their 2,500-plus pages, numerous allegations are made of millions of
*dollars in overspending; altered bills that charged taxpayers multiple times for
*individual youths; and retribution for officials who attempted changes.
*In a Jan. 13 deposition, Hagans alleges contractors went so far as to move
*youths from one school in a youth lockup to another during state audits that
*determined funding. She alleges she was hired to clean up the system, then
*demoted when she found numerous examples of billing for fictitious youths and
*overpayments to contractors.
*Ficano "knew something was wrong, but every time he sent someone over to
*determine exactly what was wrong, they were mysteriously removed," Hagans
*alleges in an April 4 deposition.
*Dunleavy had completed one audit of the system, was halfway through another
*and planned at least five more when his contract wasn't renewed last fall. At
*the time, commissioners said he talked too much to the media.
*In court papers, county attorneys claim Dunleavy alienated commissioners by
*politicking too hard for contract renewal and threatening to sue them.
*Dunleavy says commissioners were afraid of what he'd find. He alleges that
*one audit he started before he left office found $198,000 in billings for
*fictitious youths on July 31, 2004, one day before the county cut the budgets of
*providers.
*"They knew the information would be made available to appropriate
*individuals, including law enforcement," Dunleavy said.
*While the county declined comment on both lawsuits, Ficano's spokeswoman,
*Sharon Banks, said allegations of political favors to donors are "unequivocally
*a lie." So are accusations of fictitious youths, said Michael D. O'Connell,
*director of finance for Children and Family Services.
*"The (audits) are looking for something that isn't there" he said.
*Other findings in the audits -- such as no-bid contracts -- happened before
*Ficano took office, said Sue Hamilton-Smith, deputy director of children and
*family services.
*The Ficano administration was surprised by some of the costs when it took
*office, cut the budgets to providers, ended no-bid contracts and increased
*oversight, Carter said. The county is about to embark on yet another audit of the
*system this summer.
*Next year, the administration is reducing payments to nonprofits by $900,000
*to eliminate redundant services. A November audit found the county paid more
*than $100,000 in unnecessary drug and alcohol tests, including some for one
*teen who was screened 43 times in 16 months even though he never tested
*positive.
*"We didn't just bill for anything that we weren't directed to do," said
*Cynthia Smith, director of the Juvenile Assessment System, a Detroit nonprofit
*paid $5.2 million to assess the needs of teens after judges declare them
*delinquents.
*"Sometimes, there may have been misdirections, but it was always done with
*the best interests of the community and children."
*Accusations plague system
*From the start, the system has been dogged with conflict-of-interest
*accusations.
*Some providers had been in business with each other or served on the boards
*of directors of subcontractors, according to a 2003 report by Inspector
*General David Esper, Ficano's internal watchdog.
*The report also found multiple no-bid contracts. Like most counties, Wayne
*usually requires competitive bids on services to get the best deal for
*taxpayers.
*Esper's report criticized a $2.5 million contract awarded to a company
*co-owned by Evans and his brother, Blair, to manage the Blanche Kelso Bruce
*Academy, a charter school within the Calumet Center, a youth lockup in Highland
*Park.

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The company, Evans Solutions, also had a $54,000 contract for juvenile
*justice consulting in 2001.
*At the time, Evans had retired as the county's undersheriff and former
*director of the Department of Community Justice, the precursor to Children and
*Family Services. His successor, Jeriel Heard, was a longtime colleague at the
*Sheriff's Department.
*Esper's report concluded Heard "steered a no-bid (contract) to a business
*entity partly owned by his longtime professional associate and ally." The
*report quoted Heard as saying he had no involvement in the deal. He now works for
*Evans, making $117,000 as head of county jails and court security.
*Evans has denied involvement in either deal. He put his company stock in a
*blind trust in December 2000 and sold his share of the company a few weeks
*before taking office as sheriff in 2003.
*His spokesman, John Roach, wouldn't comment. Heard could not immediately be
*reached.
*Also in 2001, taxpayers paid a $16,000 bill for Kwame Kilpatrick's wife,
*Carlita, to conduct 10 conflict resolution seminars at Inkster High School. At
*the time, Kwame Kilpatrick was still in the state House and readying a
*campaign for mayor. His father, Bernard Kilpatrick, was chief of staff for Ficano's
*predecessor.
*In depositions for his lawsuit, Dunleavy alleges his former staffers
*couldn't document that the conflict resolution sessions occurred. Also in
*depositions for Dunleavy's suit, former Department of Children and Family Services
*Director Ralph Kinney said he worried Carlita Kilpatrick was paid for doing
*nothing.
*Inkster school officials did not return calls for comment. Smith said "the
*work was performed." Her agency subcontracted the sessions to another
*nonprofit, which hired Kilpatrick.
*Smith supplied The News with a canceled check and work invoices showing
*Kilpatrick was paid $250 an hour for the sessions. Laws protecting the
*confidentiality of delinquents, however, prohibit the county from making public sign-in
*sheets of the sessions, Smith said.
*The mayor's spokesman, James Canning, declined comment.
*In court depositions, Hagans and Kinney allege their days were numbered as
*soon as they began questioning the contracts to Evans' company and others.
*"I was told I was not making any friends on the commission," Kinney said in
*an April 28 deposition for Dunleavy's suit.
*Kinney refused comment for this story.
*A longtime aide who served as Ficano's chief of staff when he was sheriff,
*Kinney oversaw the Department of Children and Family Services in 2003. He lost
*his job when he was charged in August 2003 with a felony count of using
*public funds to pay for Ficano campaign materials.
*District Judge James Kandrevas dismissed the charges for lack of evidence
*before the case went to trial. Kinney returned to the county, kept his $125,000
*salary and now works finding grants or other revenue for the county.
*Hagans was demoted to her old job in economic development. She instead went
*on medical leave and retired last fall.
*Negative impact persists
*Some of the problems have eased under Ficano. But taxpayers continue to be
*affected.
*Extensive sewer repairs planned this summer Downriver were delayed after the
*state in April barred the county from issuing bonds because of problems that
*began with contracts for delinquent care.
*A yearlong, $2 million audit concluded the county delayed $12 million in
*payments to five nonprofit providers of delinquent services to make its 2003
*budget appear balanced. The audit concluded the move was a deliberate attempt to
*deceive.
*Negotiations to change the system are ongoing between Kelly, the county and
*the state Department of Human Services. Kelly said she's also concerned the
*system doesn't provide adequate mental health care for delinquents.
*"It's not Wayne County's responsibility to keep these contractors in
*business," she said. "We have young people that need help."
*You can reach Joel Kurth at (313) 222-2610 or jkurth@detnews.com.