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Hearing examines allegations of misconduct at DCFS

January 29, 2012 By

By Associated Press

 

An attorney for Illinois Gov. Pat Quinn faced blistering questioning by legislators Friday on why the governor didn’t quickly fire the head of the state’s child agency last year after a report of fraudulent billing under his watch.

At a hearing in Chicago, Rep. Jack Franks called it “cowardice” on the part of Quinn’s office to ask for Erwin McEwen’s resignation from his post as chief of the Department of Children and Family Services rather than fire him. State inspectors had found that a friend of the former director collected millions of dollars for shoddy or non-existent work.

“I can’t believe the cowardice,” Franks exclaimed in reaction to Quinn’s general counsel, John Schomberg, who had said that accepting a resignation instead of firing an employee can avoid a lawsuit.

“Let him sue,” Franks said, his voice rising. “Who cares? Do what’s right.”

The hearing before two Illinois House committees was prompted by an October report alleging lax oversight at DCFS. The state inspectors’ report said George E. Smith and his various organizations collected $18 million in state grants from 2008 through 2011. Smith often rebuffed questions from employees at DCFS by saying he only answered to the director.

The Illinois attorney general’s office is working to recover some of the money collected by Smith, the contractor accused of submitting fake papers, forging people’s signatures, turning in fraudulent expense accounts and falsely claiming he was a psychiatrist.

“It’s a lot of money. We’re going to have trouble finding” enough assets, said Ann Spillane, chief of staff for Attorney General Lisa Madigan. Spillane said the matter has been given “a very high priority.” The case also has been referred to federal prosecutors.

McEwen declined to comment to The Associated Press on Friday when reached by phone at his home.

Schomberg told the hearing that McEwen stayed on for a month after the governor requested his resignation because he had “too much institutional knowledge” and was needed for a “thoughtful transition” at the department.

Franks asked Schomberg in jest if the transition was to train the next leadership team on “how to loot.” And Franks pointed to a glowing press release announcing that McEwen was “leaving the agency to pursue new opportunities” as a possible evidence of an attempt to cover up the situation.

“This government was deceitful to the public,” Franks said.

Schomberg said state law barred the governor from disclosing anything about the inspectors’ work, which hadn’t yet been publicly released.

“Isn’t it possible to be honest without violating the ethics act?” Franks asked, drawing laughter at the hearing.

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Filed Under: News, State Budget, Stopping Waste and Fraud

State investigators say DCFS contract fraud could be worse than known

January 28, 2012 By
From the Chicago Tribune Political Reporter Monique Garcia
7:45 p.m. CST, January 27, 2012

State ethics investigators say they may never know the full extent of an alleged contracting scheme that they say cost taxpayers at least $18 million and led to last year’s resignation of the head of the Illinois Department of Children and Family Services.

The comments came during a legislative hearing Friday examining a probe that found numerous violations by George E. Smith, who held various state contracts across a number of agencies, including DCFS.

The state executive inspector general’s office accused Smith of forging documents, presentingfalse information about grant funds for after-school services, submitting budgets that allowed him to conceal funds, and accepting payments he was not entitled to receive.

But Executive Inspector General Ricardo Meza said the wrongdoing may go further, as the state only investigated contracts Smith held dating back to 2008. Smith has been doing businesses with the state since 1986.

“This investigation could literally have taken us another year-and-a-half or two to uncover,” Meza told House lawmakers. “There had to be a point at our office where we decided that we thought that even though we did not fully uncover every piece of misconduct that Dr. Smith may have engaged in, we had to issue the report.”

Pressed if it was possible that more than $18 million in tax dollars were misspent, Meza said, “I think that’s a fair statement…we may never know.”

The Illinois attorney general’s office is investigating in an attempt to recoup some of the money, and federal grand jury subpoenas have named some of Smith’s companies among records sought from state agencies, including Diversified Behavioral Comprehensive Care.

Meza said the investigation’s scope was limited partly because agencies are only required to keep documents for three years, a timeline lawmakers said they will push to extend.

Legislators also said they will also seek changes to the state’s Ethics Act, which prevents many cases of wrongdoing by state workers from being made public. The allegations against Smith’s were laid out in a report that contended former DCFS director Erwin McEwen failed to properly oversee grants. McEwen and Smith are longtime friends, and McEwen eventually refused to cooperate with investigators.

Under the law, reports are made public if it leads to an employee being fired or being suspended for three or more days. McEwen resigned, but a lower-level employee was suspended for five days, leading to the report’s release by the Executive Ethics Commission.

The commission could have redacted the majority of the report not dealing with the suspended employee, but decided to make the findings public.

Lawmakers also lashed out against Gov. Pat Quinn for not firing McEwen when the administration received the initial report last May. Instead, McEwen was allowed to stay on the state payroll through September.

Quinn general counsel John Schomberg said the administration wanted to give McEwen “due process” and “provide for additional transition time” as it searched for a replacement.

Schomberg said ethics laws also placed the governor’s office “between a rock and a hard place” because if they fired McEwen, they were not allowed to say why until the report was made public.

It was an argument Rep. Jack Franks, D-Marengo, found lacking.

“What does one have to do to get fired working for Gov. Quinn?” Franks said. “If it was the private sector you would have opened yourself up to lawsuits for absolutely negligence. And I think that’s what’s happened here.”

Copyright © 2012, Chicago Tribune

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Filed Under: News, State Budget, Stopping Waste and Fraud

Reps. Harris and Franks to Probe Fraud and Waste

November 18, 2011 By

Quinn took 4 months to remove child-welfare chief

By CHRISTOPHER WILLS Associated Press12:50 p.m. CST, November 15, 2011
SPRINGFIELD, Ill.—

Gov. Pat Quinn took four months to remove his director of child welfare after being told state inspectors believed the man had turned a blind eye while a friend ripped off state government, and Quinn kept quiet about problems at the agency even after conducting his own review.

Quinn aides said the governor acted as quickly as possible to determine the truth and then make changes without causing major disruptions at the Department of Children and Family Services. They say state ethics laws barred him from revealing that inspectors were investigating then-Director Erwin McEwen, information that didn’t become public until three weeks ago.

The Democratic governor has a long history of calling for more government openness and accountability, first as an outside activist and then as state treasurer and lieutenant governor. Legislators are questioning how he handled the McEwen case, and why it took him so long to remove McEwen.

Two Illinois House committees plan a joint hearing, said Rep. Greg Harris, a Chicago Democrat and chairman of the House Human Services Committee.

“There are questions we would like to ask about the decision-making,” Harris said Tuesday. “This merits a full discussion.”

Rep. Jack Franks, chairman of the State Government Administration Committee, said he was troubled that Quinn did not remove McEwen far more quickly, particularly when the report said McEwen was no longer cooperating with investigators as required by law.

“The first day an employee of mine stopped cooperating would be his last day on the job,” Franks said.

McEwen was accused of creating an atmosphere of lax oversight that allowed a friend to take millions of dollars from the state for shoddy or non-existent work. Inspectors recommended legal action against McEwen’s friend, George E. Smith.

Quinn’s office got the inspectors’ preliminary report on May 25, aides said, and the governor ordered a review that was completed by Aug. 1. McEwen’s resignation was announced nearly a month later, and he left the agency in late September.

His departure was portrayed as routine. Quinn said nothing about McEwen’s mismanagement or Smith’s potential fraud. That came to light when the inspector general’s official report was released on Oct. 17.

Spokeswoman Brooke Anderson denied any contradiction between Quinn’s calls for openness and his silence when removing McEwen. She said state law barred Quinn from disclosing anything about the inspectors’ work, even his own internal review or what convinced him that McEwen had to go.

She said Quinn is satisfied with those restrictions on what he can reveal about his own administration.

“The current law strikes a fair balance between due process and transparency,” Anderson said in an email.

The law cited by Quinn’s office is part of the act setting up an ethics commission and detailing the duties of inspectors. The section on what information the commission can release says “all investigatory files and reports of the Office of an Executive Inspector General … are confidential.”

Quinn’s position got some support Tuesday from author and attorney Scott Turow, the former chairman of the state’s Executive Ethics Commission.

“As a matter of policy, I think the governor is probably doing the right thing in not releasing details until the disclosure procedure at the EEC has been complied with,” Turow said in an email.

But other government watchdogs questioned Quinn’s claim that a governor is legally barred from telling the public why he has removed an agency director.

“Once there’s a termination, that cause should be public,” said Brian Gladstein, executive director of the Illinois Campaign for Political Reform.

McEwen did not return messages left at his home.

State inspectors report Smith billed several government agencies for work done by non-existent employees, submitted fake papers, forged people’s signatures, turned in fraudulent expense accounts and falsely claimed he was a psychiatrist. They also found he administered psychotropic drugs to children without permission and without determining the proper dosages.

The report said Smith and his various organizations collected $18 million in state grants from 2008 through 2011. Smith often rebuffed questions from employees at the Department of Children and Family Services by saying he only answered to the director.

“Director McEwen created a situation that was ripe for a vendor such as Dr. Smith to enrich himself and inflate costs by billing for `ghost’ positions and billing various agencies for the same services,” said the report, a result of an investigation by the DCFS inspector and the state’s executive inspector general.

It’s not clear whether any law enforcement agency is considering charges against Smith. The governor’s spokeswoman wouldn’t say whether Quinn thinks charges are warranted.

“That is for the proper authorities to determine,” Anderson said.

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Online:

Inspector general’s report: http://tinyurl.com/83wsns6

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Christopher Wills can be contacted at http://twitter.com/ChrisBWills

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Filed Under: Stopping Waste and Fraud, Updates, Youth and Families