Category Archives: Horror.Stories

Federal Fraud Recoveries Decline in Fiscal Year 2017

Source: Project on Government Oversight, January 2, 2018

… The DOJ announced it had recouped $3.7 billion through settlements and judgments in False Claims Act cases in fiscal year 2017. This amount is nearly 23 percent lower than the previous fiscal year, but roughly in line with FY 2015’s total. This seems to be a trend: a historical analysis of DOJ’s fraud recoveries since 1986 (the year Congress substantially strengthened the False Claims Act) shows that, in recent years, a substantial drop-off occurs in non-election years. … As in past years, the largest share of the recoveries—about two-thirds—involved health care fraud. But a substantial sum also came from some of Uncle Sam’s largest contractors:

  • AECOM and Bechtel: $125 million to settle False Claims Act allegations that the contractors charged the government for deficient materials and services at the Hanford Nuclear Site. Separately, AECOM paid over $5.2 million to settle another fraud investigation involving its work at Hanford.
  • Agility: $95 million to settle a 12-year-old case accusing the company of overcharging the government for food supplied to U.S. troops in the Middle East.
  • Atlantic Diving Supply: $16 million for allegedly inducing the government to award small business contracts to companies misrepresenting their eligibility as socially or economically disadvantaged small businesses.
  • Huntington Ingalls Industries: $9.2 million to resolve claims of overbilling the government for work at its Mississippi shipyards.
  • Pacific Architects and Engineers: $5 million to settle allegations that it failed to properly screen and oversee personnel working on a contract to train Afghan security forces.
  • Sierra Nevada Corporation: $14.9 million for allegedly causing the government to pay inflated labor costs on contracts.
  • Defense contractors accounted for $220 million in fraud settlements and judgments.

The Privatization Agenda Goes Bust

Source: Tom O’Leary, Jacobin, January 18, 2018

The collapse of Carillion, the mammoth UK government contractor that went bankrupt Monday, was wholly made in Britain, although it has negative consequences internationally. The reason for Carillion’s bankruptcy, which puts vital public services and thousands of jobs at risk, is that the firm and its component companies grew fat during the first phase of neoliberal economic policy and could not cope with the more recent phase, austerity. The immediate cause of the collapse is a failed acquisition spree since the crisis began. Yet the underlying cause is the disastrous relationship successive governments have had with the private sector. Whether the Thatcher, Major, and Blair governments believed the nonsense they spouted about the superior efficiency of the private sector is immaterial. Only the willfully ignorant could ignore the litany of failed privatizations and the extortion of PFI “public-private initiative” contracts that followed their policies. The real purpose of Thatcherite economic policy, which has become widely known as neoliberalism, was precisely to hand state resources and revenues to the private sector. …

Related:

Carillion directors to be investigated
Source: BBC, January 16, 2018

The government has ordered a fast-track investigation into directors at the failed construction firm Carillion. The UK’s second biggest construction firm went into liquidation on Monday, after running up losses on contracts and struggling with heavy debts. The business secretary has asked for an investigation by the Official Receiver to be broadened and fast-tracked. The conduct of directors in charge at the time of the company’s failure and previous directors will be examined. Carillion’s business is now in the hands of the official receiver, which is reviewing all of Carillion’s contracts. The company employed 43,000 people worldwide, 20,000 in the UK, and had 450 contracts with the UK government. …

Carillion’s Government contracts could have been stopped by a single law. Why wasn’t it used?
Source: Hazel Sheffield, Independent, January 16, 2018

Carillion is part of what is known as ‘the shadow state’: a group of large companies secretively awarded government contracts to run Britain’s public services. There are others. …

Continue reading

Lockheed Martin, Boeing aerospace venture bilked U.S. for $90 million, lawsuit says

Source: Kirk Mitchell, The Denver Post, January 8, 2018

A whistleblower has settled a lawsuit filed against a Centennial aerospace company formed by Lockheed Martin and The Boeing Company that claimed the company defrauded the U.S. government out of at least $90 million by grossly overcharging for employee work hours. Whistleblower Joseph Scott filed the lawsuit on behalf of himself and the government against United Launch Alliance and United Launch Services, under the Federal Civil False Claims Act. Scott is a former ULA employee. … This wasn’t the first time ULA practices have come under scrutiny. In December 2016, ULA paid the government $100,000 to settle allegations that a subcontractor paid its employees kickbacks in order to win contracts. As a result, the U.S. paid higher costs to subcontractor Apriori Technologies between 2011 and 2015, Troyer has previously said. …

… ULA used a system called the Keith Crohn model that creates a grid using the cost of equipment to reach an employee cost. A labor value was placed on the grid for every item ordered through the company’s purchasing department. For example, any item that cost between $1 and $1,000 would be assigned a labor value of 8 hours. It didn’t matter what part it was, the lawsuit said. The U.S. bans arbitrary cost estimates when actual data is available that establishes the cost. ULA took advantage of the government’s practice of not auditing smaller projects. On projects above $100 million, the government audits bids and can reduce the contract price if the Defense Contract Audit Agency discovers discrepancies, the lawsuit says. In the first five to seven years of its existence, ULA often failed those audits. For larger audited launches, ULA began using historic data of actual prior labor costs, the lawsuit says.
But for smaller bids, ULA continued using its flawed estimates, knowing that it wouldn’t be audited, the lawsuit says. …

Trashed: Inside the Deadly World of Private Garbage Collection

Source: Kiera Feldman, ProPublica, January 4, 2018
 
Shortly before 5 a.m. on a recent November night, a garbage truck with a New York Yankees decal on the side sped through a red light on an empty street in the Bronx. The two workers aboard were running late. Before long, they would start getting calls from their boss. “Where are you on the route? Hurry up, it shouldn’t take this long.” Theirs was one of 133 garbage trucks owned by Action Carting, the largest waste company in New York City, which picks up the garbage and recycling from 16,700 businesses.  Going 20 miles per hour above the city’s 25 mph limit, the Action truck ran another red light with a worker, called a “helper,” hanging off the back. Just a few miles away the week before, another man had died in the middle of the night beneath the wheels of another company’s garbage truck. … In the universe of New York’s garbage industry, Action is considered a company that takes the high road. A union shop, it offers starting pay of about $16 per hour for helpers and $23 for drivers, far more than many other companies. And unlike some other companies, Action provides high-visibility gear and conducts safety meetings. But since 2008, the company’s trucks have killed five pedestrians or cyclists.  In New York City overall, private sanitation trucks killed seven people in 2017. By contrast, city municipal sanitation trucks haven’t caused a fatality since 2014. …

Related:

Commercial trash workers testify against conditions
Source: David Giambusso, Capital New York, April 30, 2015

During a City Council debate Wednesday over free enterprise and recycling diversion rates in New York’s private carting industry, members of the sanitation committee heard from a group of stakeholders who rarely voice concerns about the industry publicly: workers in the private trash trade. “When you only earn minimum wage and are working 60 hours a week in the bitter cold snow and ice—I feel like I am being taken advantage of,” said Carlton Darden, who works for the private hauler Five Star Carting, in testimony to the Council. “I feel as if I’m a slave,” testified Michael Bush, another Five Star employee. “I feel used and degraded. I feel as if I’m nobody, but this job is a real responsibility to keep the streets of New York City clean.” Juan Feliz testified that he was fired from Mr. T Carting after contracting cancer—a condition he attributes to chemicals and debris he was exposed to on the job….. Workers testified that they can make 300 stops a night throughout the city during 16-hour shifts, leading to poor recycling rates and safety hazards for residents and workers alike. They said some companies pay workers as little as $8.75 an hour to pick up 20,000 pounds of trash per night, per worker. Workers are expected to provide their own gloves, boots and reflective gear and receive little or no training at some companies, the men testified. …

High-Class Trash /Why it costs so much to haul garbage in New York—at least when the Department of Sanitation is doing it
Source: Matthew Hennessey, City Journal, 15 July 2014 [editor’s note: City Journal is published by the Manhattan Institute]

….Less often thought of as a uniformed workforce, however, are the Big Apple’s 7,200 sanitation workers, who have been without a contract since 2011. The last contract negotiated by the Uniformed Sanitationmen’s Association Local 831 resulted in a 17 percent raise over 54 months for workers. But according to a May report by the nonprofit Citizens Budget Commission (CBC), the bill for collecting and disposing of New York’s trash is already much higher than in other large American cities. Can Gotham really afford to pay more?

With a population of 8.3 million and the second-largest urban economy in the world, New York City produces lots of garbage—about 8 million tons annually—but the city’s Department of Sanitation (DSNY) is responsible for hauling only half of it. The rest is handled by roughly 250 private hauling firms, which contract with local businesses to remove commercial waste. The CBC calculates that the sanitation department spends $431 per ton to collect and dispose of garbage, while the city’s private haulers do it for just $183 per ton. How do private waste-hauling firms, which are both unionized and heavily regulated, manage to pick up and dispose of trash so much more efficiently than the sanitation department?

For starters, the private firms do a better job on the disposal side than the city does. The DSNY sends just 14 percent of the waste it collects to recycling plants, which pay for the materials they receive—up to $25 per ton for paper recyclables, depending on market variations—with most of the rest going to landfills (a small amount gets converted into energy). Private haulers, by contrast, send 63 percent of what they collect to recycling plants, lowering their disposal costs considerably.

The real difference between the public- and private-sector trash haulers, however, shows up on the collection side—specifically, how much those who do the collecting get paid. City sanitation workers benefit from incentives such as “productivity” bonuses and shift-differential payments, which are rarely offered to their counterparts in the private workforce, and they get substantially more paid days off, including unlimited sick days, the CBC report found. The benefits add up. In 2012, the average DSNY employee earned 39 percent more than the average worker at a private trash-hauling firm in the city. Total compensation for a first-year DSNY employee—including overtime, holiday pay, health insurance, and retirement benefits—tops out at over $100,000. A city sanitation worker with more than 20 years on the job earns almost $170,000 in total compensation. The DSNY’s highest-paid employee in 2013 took home $219,233, more even than then-commissioner John Doherty…..

Chicago Public School Teachers Sue Charter School Operator Over Missing Pensions

Source: Skyline Newspaper, January 2, 2018
 
Approximately 50% of the public school workforce is made up of teachers, many of whom are likely underpaid for the work they do. In Chicago public schools, a number of teachers were allegedly further underpaid by a charter school operator who did not report their employment and subsequently failed to pay pension contributions on their behalf. And now, the Chicago Public School Teacher’ Pension and Retirement Fund is fighting back by suing that operator, Prologue Inc. …

 Boca-based prison operator Geo Group to pay $550,000 to settle sexual harassment lawsuit

Source: Marcia Heroux Pounds, Sun Sentinel, January 8, 2018
 
Boca Raton-based The Geo Group has agreed to pay $550,000 to settle a sexual harassment lawsuit filed by the Equal Employment Opportunity Commission and Arizona’s attorney general.  The lawsuit, filed in 2010, concerned two Geo-operated prisons: the Central Arizona Correctional Facility and Arizona State Prison-Florence West Facility, both in Florence, Ariz. …. The lawsuits, filed in the in U.S. District Court for the District of Arizona, alleged that GEO retaliated against female employees who complained or sought help by disciplining them, forcing them to quit, firing them, or placing them in unsafe conditions in the prison. ….

Related:

Private Prison GEO Group to Pay $60,000 To Settle EEOC Sexual Harassment And Retaliation Lawsuit
Source: EEOC Press Release, August 25, 2017
 
The GEO Group, Inc., operator of the Central Arizona Correctional Facility (CACF) in Florence, Ariz., will pay $60,000 and furnish other relief to settle a sexual harassment and retaliation lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the agency announced today.  According to the EEOC’s lawsuit, GEO allowed its employees and managers to sexually harass Roberta Jones since June 2007. For example, the agency alleged that certain male superior officers and coworkers would frequently stand around bragging about their sexual exploits. At least two superior officers were alleged to have put their hands on Jones in an unwanted manner. GEO failed to adequately respond to Jones’s complaints of sexual harassment, the EEOC said. The lawsuit also alleged that Geo assigned Ms. Jones to less desirable posts, disciplined, and terminated her after she complained about the harassment and participated in protected activity under Title VII of the Civil Rights Act. …

Florence Private Prison GEO Group Sued a Second Time by EEOC for Sexual Harassment and Retaliation
Source: U.S. Equal Employment Opportunity Commission (EEOC), September 25, 2015

The GEO Group, Inc., operators of the Central Arizona Correctional Facility in Florence, Ariz., violated federal law by sexually harassing a female correctional officer and then retaliating against her for having participated in a prior lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC) against GEO alleging systemic sexual harassment, EEOC charged in a lawsuit it filed today. According to EEOC’s lawsuit, GEO allowed its employees and managers to sexually harass Roberta Jones since June 2007. …

Metro gets serious about outsourcing Silver Line service

Source: Martine Powers, Washington Post, January 9, 2018
 
A proposal to outsource operations of the Silver Line took a significant step Monday, when Metro officials issued a formal “request for information” from potential contractors who might be interested in the job. …. Metro’s opportunities for privatization are limited, because of its existing union contracts. But the agency is allowed to seek help from outside contractors when considering how to manage operations on new segments of the system. Officials have already met with potential contractors to outsource bus operations and maintenance at the newly-constructed Cinder Bed Road bus garage in Newington, Va…..

Related:

D.C. May Seek To End Private Contracts For Public Transit
Source: Martin Di Caro, WAMU, November 30, 2017

A coalition of organized labor and social justice groups are calling on D.C. lawmakers to stop the District from contracting out public transit services, saying the private firms that operate the Circulator bus system and D.C. Streetcar fail to provide reliable service to riders and treat their employees poorly.  “We are concerned about privatization of good public-sector jobs,” said Barbara Kraft of the Washington Interfaith Network, which is teaming with the Amalgamated Transit Union (ATU) and individual bus and streetcar operators to lobby the D.C. Council to bring all District transit operations in-house. …

Union: Look to Circulator and D.C. Streetcar for evidence of why Metro shouldn’t be privatized
Source: Faiz Siddiqui, Washington Post, May 16, 2017
 
Reliability problems with the D.C. Circulator and planning and construction shortfalls of the city’s streetcar system are examples of why the District and Metro should be wary of privatizing more services, the transit agency’s union said Tuesday.  Although the District Department of Transportation owns the Circulator buses and oversees the D.C. streetcar, Amalgamated Transit Union International says there’s an implicit warning for Metro.  “Fix the service you have; take responsibility for the quality of service you have,” said Michael McCall-Delgado, a strategic researcher at ATU International and author of a new report, “Fool D.C. Twice.” … The union report holds the District partially responsible for the decline of the region’s transit system, saying that instead of investing in Metro, local leaders pushed seemingly “hip” and “premium ridership” projects to attract millennials to the city. …

… ATU, which represents more than 9,000 Metro employees through its Local 689 chapter, has rejected Wiedefeld’s shift toward privatization, including a proposal that would use private contractors to fill station manager or track inspection jobs on the second phase of the Silver Line. Contractors could also be used to operate such facilities as new bus garages. Separately, Metro has nearly doubled its spending on private contractors over the past two years. In its report, however, the union takes D.C. officials to task for failing to hold contractors accountable for construction, planning and service failures. The report highlights how the Circulator, operated by Cincinnati-based First Transit, has been beset by maintenance problems for years “while avoiding government oversight,” according to the union. Circulator buses have a notoriously poor reliability record, with the 2016 audit finding an average of 22 defects per bus. Many of the defects — nearly three per bus — were tied to safety equipment and should have been caught during routine inspections, the audit said. And the problems have persisted: A report this week from WAMU said reliability issues have left the Circulator up to 10 buses short of its quota when buses depart its lots each day. …

Continue reading

Iowa lawmakers return with to-do list on taxes, Medicaid

Source: Barbara Rodriguez, Associated Press, January 7, 2018
 
Iowa lawmakers return to the state Capitol on Monday with a to-do list ranging from overhauling state taxes to possibly addressing issues with the privatized Medicaid program. Republicans, entering a second year of complete statehouse control, will work amid another budget crunch and a looming election year. …

Related:

Medicaid privatization is saving Iowa 80% less money than predicted, state report says
Source: Tony Leys, Des Moines Register, January 5, 2018
 
Iowa’s controversial shift to privately managed Medicaid will save the state 80 percent less money this fiscal year than originally predicted, a recent state estimate suggests.  Iowa now stands to save $47.1 million this fiscal year by having private companies manage the $4 billion program, according to a quarterly report prepared by staff members from the Department of Human Services.  After then-Gov. Terry Branstad ordered the shift in 2015, he predicted it would save the state $232 million in fiscal year 2018. That is the current budget year. In fiscal year 2017, which ended last June 30, the state saved nearly $119 million over what it would have spent having government administrators run the program, according to a DHS report using the same criteria used in the new estimate. …

‘We’re completely in the dark’: Families still uncertain after Iowa Medicaid transition
Source: Stephen Gruber-Miller, Iowa City Press-Citizen, December 12, 2017
 
Ryan’s case is one example of the uncertainty that has played out in households around the state in the wake of AmeriHealth’s decision this fall to leave Iowa after it could not reach an agreement with the state on reimbursement rates.  Join now for as low as $29/YR Subscribe Now AmeriHealth and the two other companies chosen to manage Iowa’s Medicaid program when it was privatized last year by then-Gov. Terry Branstad have complained of losing hundreds of millions of dollars.  When AmeriHealth announced it was leaving, state officials first gave families a choice between UnitedHealthcare and Amerigroup, the third company. Then they backtracked, saying Amerigroup did not have the capacity to handle new clients. In late November, the Department of Human Services said it would resume oversight for more than 10,000 Iowans who had tried to switch companies before the deadline. …

Continue reading

Florida’s disposable workers: Companies profit from undocumented laborers, dump them after injuries

Source: Maria Perez, Naples Daily News, December 14, 2017

Florida law makes some immigrants in high-risk jobs disposable, allowing businesses and insurers to benefit from their work without covering injuries. …. Some Florida businesses profit from the labor of unauthorized immigrants after accepting phony identification when hiring them, and then the employers or their insurers report them after a work injury for using false documents, a yearlong Naples Daily News investigation found. …. When authorities arrested 12 undocumented workers in a Fort Pierce Waste Pro plant in 2012, accusing them of obtaining a job with false identifying information, six employees told officers they were hired under the identities of former workers or with false information provided by managers or another worker. Arrested workers told U.S. Department of Labor investigators they were asked to pay hundreds of dollars in kickbacks to work at the company. They also said managers threatened to report them to immigration authorities if they said they were injured at work when seeking medical care. The Labor report on the 2013 investigation stated a supervisor once threatened to fire or report for deportation employees who didn’t pay $50 each. State investigators charged the workers for using fake identities, but not the employer. Federal labor officials didn’t cite the company for the kickbacks, saying the violations occurred beyond a two-year statute of limitations, according to the report. Waste Pro was not charged with wrongdoing, it cooperated with investigators, and increased scrutiny of employment documentation company lawyer Amy S. Tingley said. …

Related:

12 Waste Pro workers accused of providing fraudulent Social Security numbers to get jobs
Source: Will Greenlee, Palm Beach Post, July 19, 2012

Twelve Waste Pro USA employees were arrested Wednesday after state investigators received information suggesting workers there submitted fraudulent Social Security numbers for employment purposes, according to affidavits released Thursday.

‘It’s like an insane nightmare’: Parents question private company hired to drive special needs kids to school

Source: Anastasia Dawson, Tampa Bay Times, December 11, 2017

As a foster parent with two sons of her own, Kayla Storey has learned all the tricks to get her kids out of bed and off to school every morning. But this year, Storey says she’s the one waking up every school day with a knot in her stomach. It’s been there ever since the first day of classes, when a contracted driver from American Logistics Company pulled into her Riverview driveway to take Owen, her 5-year-old deaf son, to Doby Elementary School in Apollo Beach. “They had no identification, no logo on the van and they didn’t even bring car seats, I watched them try to strap my 50-pound kid into the front seat,” Storey said. … This is the fourth year the Hillsborough School District has used American Logistics Company to transport students protected by federal laws that allow them to attend a different school than the one assigned to their home address. Like Owen Storey, most are in specialized Exceptional Student Education programs. … The School District has paid out $1.4 million to ALC Transportation since entering a contract with the company in December 2013, district officials said. … Yet even with the high price tag, parents such as Storey say they shouldn’t have to fear for their child’s safety when they’re being driven to and from school. Although the same driver is supposed to transport a student all year, at least 10 different people drove Owen to school before frequent phone calls and emails to ALC secured a permanent driver, his mother said.

… ALC was hired in 2013 because it wasn’t financially feasible to continue transporting these students with district school buses and staff, Beekman said. … The same year the California-based company began driving Hillsborough students it was ousted from Dallas County schools in Texas. In September 2013, the Dallas Morning News reported that the School District returned to using school buses to transport special-needs students after parents flooded district offices with safety concerns and complaints about poor communication with drivers. … The Hillsborough School Board reapproved its contract with ALC in September after Beekman explained that bringing those transportation services in-house would have to wait until the School District “gets to a place of better financial stability.” Staff are already working out the costs in a “preliminary business plan,” he said. …