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* DCFS Director Erwin McEwen left government last month and now we know why…
Inspectors concluded that Erwin McEwen, the former director of the Department of Children and Family Services, “created a situation that was ripe for a vendor … to enrich himself and inflate costs by billing for ‘ghost’ positions and billing various agencies for the same services.”
The report by the state’s executive inspector general found that George E. Smith and his various organizations collected $18 million in state grants from 2008 through 2011, but there’s little documentation of what services he performed for much of that money. […]
“Dr. Smith’s fraud continued for so long, in part, due to lack of DCFS oversight. At least one annual $450,000 DCFS grant awarded to him went completely unmonitored for years,” investigators reported.
The misconduct went beyond DCFS, they said. Chicago State University, the Department of Human Services and the State Board of Education all “paid Dr. Smith grant funds with little or no effort to determine whether services were actually provided.”
* But, wait, as they say, there’s more. Click the pic for a better view…
The inspectors general claim that both Director McEwen and Smith “failed to cooperate in this investigation” and claimed that “numerous other State agencies failed to adequately monitor grants awarded to Dr. Smith and his business interests.”
The full report can be read by clicking here.
* Background…
McEwen spent much of his 20-year career in the private sector, an administrator of child welfare programs that did contract work for the state.
In 1994, he left one agency after he tested positive for cocaine use. He says it was a false positive result and fought to have it expunged from his record but lost.
The episode did little to slow his career, however, and in 2003 he joined DCFS as a deputy director.
* From October of 2007…
A state employee whom Gov. Blagojevich once outed as a subject of a federal probe into his administration’s hiring practices is now being promoted to a top job within the Illinois Department of Children and Family Services.
Robin Staggers once was accused by a subordinate of creating “a culture of intimidation” within DCFS’ human resources department, according to an internal state report disclosed in January by the Associated Press.
But DCFS Acting Director Erwin McEwen said in a message Wednesday to the agency’s 3,000-plus employees that Staggers is being named chief of staff as part of a series of management changes.
From January of this year…
Amidst a blizzard of news on the impending snowzilla looking to stomp on Chicago, Governor Pat Quinn on Monday quietly announced six appointments to his cabinet, leaving the fate of other cabinet members uncertain.
Quinn re-appointed Director Rocco Claps to the Department of Human Rights, Director Brian Hamer to the Department of Revenue, Director Julie Hamos to the Department of Healthcare and Family Services, Secretary Gary Hannig to the Department of Transportation, Director Erwin McEwen to the Department of Children and Family Services and Secretary Michelle R.B. Saddler to the Department of Human Services.
From August of this year…
McEwen is moving to pursue new opportunities and was not forced out, an agency spokesman said.
From today…
Gov. Pat Quinn acknowledged Monday that he knew of the investigation when McEwen left office. “He was given the opportunity to resign and he took that opportunity,” the Democratic governor said at an unrelated news conference.
Also from today…
[Quinn] did not answer further questions or explain why he let McEwen resign and chose not to make the misconduct public.
*** UPDATE *** Former Sen. Hendon is mentioned in the report…
The report also makes mention of former state Sen. Rickey Hendon (D-Chicago), who abruptly resigned in February as federal investigators probed a series of questionable state grants bearing his fingerprints.
When questions arose internally at DCFS about how Smith was spending state grant money, a DCFS employee paid a visit to Smith’s offices to ask specifically about a $13,000 payment to a group known as Better Life for Youth, which was among organizations named in a 2010 federal subpoena to the State Board of Education.
The employee “asked Dr. Smith for information about the $13,000 payment. In response to his inquiries, Dr. Smith asked [the employee] if he knew that Better Life for Youth was [former] Illinois State Senator [Rickey] Hendon’s organization,” the report states.
posted by Rich Miller
Monday, Oct 17, 11 @ 1:09 pm
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Here come the federales. Keep those shredders off, folks, and lets not try anything stupid with the computer hard-drives. Cover-ups are always worse than the crime, and easier to prove intent.
Remember, it’s a felony to lie to an FBI agent. And when then they ask you a question, consider that they may already know the answer before you respond.
Comment by wordslinger Monday, Oct 17, 11 @ 1:14 pm
If Quinn “resigned” would Sheila be able to do anything to improve the image of the executive branch of IL state government? Or is it basically beyond hope?
Comment by Responsa Monday, Oct 17, 11 @ 1:29 pm
The (2nd) biggest mistake Blago ever made was not to keep Jess McDonald as DCFS Director.
Comment by gathersno Monday, Oct 17, 11 @ 1:29 pm
Responsa, why should Quinn resign?
Comment by Rich Miller Monday, Oct 17, 11 @ 1:35 pm
This problem rests squarely on the General Assembly for failing to authorize funding for sufficient employee headcount, and for the current and previous Governor for micro-managing state hiring to the point where front line positions never get filled.
The fact of the matter is that over the past two administrations, state employee headcount is down a TON — last I recall ( I think 2009) we had shed over 17,000 state headcount in under 8 years.
A very large number of those positions are people who, in one form or another, are tasked with monitoring the spending of state money which has been funneled to private vendors in some shape or form.
In fact, outside of agencies like Corrections, State Police, etc — this is primarily what state government does now: it monitors and helps hold accountable the vast majority state private contractors, both for profit and not for profit, who are tasked to do the actual work that is dictated by state policy.
One can debate the merits of privatization all you like, but without sufficient staff to monitor what’s happening, the system is ripe for stuff like this. And as we continue to cut headcount, it will become more and more of a problem. From a pure human resources perspective, 1 FTE is only capable of monitoring so many grants/contracts. When you don’t have enough FTE, you don’t have enough people watching, and then you have rampant corruption.
It’s pretty simple. And frankly, one wonders if the mass cutbacks were part of a larger plan to create a better environment for easy profits.
Comment by ILPundit Monday, Oct 17, 11 @ 1:54 pm
Rich–I wasn’t saying he should, or would resign. But one never knows. Doesn’t 3 more years of Quinn feel almost more than is possible for the state to bear? And one has to admit that respect for his governance and support for him is almost nil even in his own party. Democrats in private know (and freely say) he is killing them. They mock him. And being openly at war with Rahm? More than anything I was just wondering if people who know Sheila thought she could improve things any if she had the chance to do so. FWIW it was meant as a “what if” question, not a “will he” question.
Comment by Responsa Monday, Oct 17, 11 @ 1:57 pm
“[Quinn] did not … explain why he let McEwen resign and chose not to make the misconduct public.”
Anything else might have interfered with his pension, and that would be unconstitutional! DUH!!
Comment by Chris Monday, Oct 17, 11 @ 1:57 pm
=Rich–I wasn’t saying he should, or would resign. But one never knows.=
lol Sounds like a feeble and failed attempt to start a whisper campaign.
Comment by Anonymous Monday, Oct 17, 11 @ 2:02 pm
“Doesn’t 3 more years of Quinn feel almost more than is possible for the state to bear?”
3 more *weeks* feels like too much, whenever he has a presser. If he keeps his mouth shut, and doesn’t have any appointees resigning under a cloud, 3 years might be *just* bearable.
“And one has to admit that respect for his governance and support for him is almost nil even in his own party.”
1. Didn’t the D’s vote to excommunicate him? Shouldn’t they?
2. For anyone (not entitled to an invoilable public pension, of which he has decided his primary job is to be the lord high protector of, the rest of Illinois be damned) with even half a brain, it’s been subzero for a while.
3. What would Pat’s aggregate pension haul be if he resigned today, vs. if he waited til December 16, 2013?
Comment by Chris Monday, Oct 17, 11 @ 2:05 pm
OK, people, time to move along and get back to the topic at hand here.
Comment by Rich Miller Monday, Oct 17, 11 @ 2:09 pm
Sorry, Rich. Feel free to dele my second here, if you want.
First one, tho, was on point and prolly accurate.
Comment by Chris Monday, Oct 17, 11 @ 2:16 pm
As a Republican, I certainly hope Quinn runs for re-election in ‘14
Comment by Cincinnatus Monday, Oct 17, 11 @ 2:16 pm
Cincy….
And quite a few of us are hoping Cain wins the 2012 GOP nomination.
Comment by Deep South Monday, Oct 17, 11 @ 2:30 pm
=Here come the federales.=
More like here have to come the federales because the administration doesn’t have the integrity to do the investigation.
Comment by Leave a Light on George Monday, Oct 17, 11 @ 2:39 pm
The resources available to actually detect and hold accountable large-scale fraud in this state is paltry. Consider if “only” 10% of our budget was fraudulent, we’re speaking of billions. Perhaps the relative low number of investigators is not an accident.
Comment by GMatts Monday, Oct 17, 11 @ 2:46 pm
**Consider if “only” 10% of our budget was fraudulent, we’re speaking of billions. **
Of course, there is zero evidence that fraudulent activities come anywhere close to 10% of the state’s budget, but hey, lets not let facts get in the way.
Comment by dave Monday, Oct 17, 11 @ 2:53 pm
This is what happens when you pull auditors out of the agencies and no one knows what is really going on. There is no accountability. Maybe now that they are back as true internal auditors things will improve. Amazing that there were hundreds of millions in grants under Illinois First with no misuse of funds discovered - but that was the corrupt administration?
Comment by Scottish Monday, Oct 17, 11 @ 2:56 pm
“Of course, there is zero evidence that fraudulent activities come anywhere close to 10% of the state’s budget, but hey, lets not let facts get in the way.”
What *are* the facts dave? If they are of teh “of course” variety, I must assume you have them at your fingertips to share.
I do seriously doubt anything approaching 10%, but to dismiss it as obviously hyperbolic based on “the facts”, means that there must be well-known facts available. Facts I do not know and would like to.
Comment by Chris Monday, Oct 17, 11 @ 3:02 pm
What Wordslinger said.
When I think of the possible fraud and the millions that may have been poured into pockets that didn’t earn it, combined with all of the human services agencies that aren’t getting paid for legitimate services delivered…
Comment by Aldyth Monday, Oct 17, 11 @ 3:32 pm
As a state employee (on a day off, so don’t get excited folks), I can tell you that allowing someone to resign after overseeing this kind of fraud tells me that it’s business as usual in the Quinn administration. I’m not singling Quinn out as being worse, just consistent with what has become accepted practice in Illinois. I also doubt that the lack of oversight is due to insufficient headcount employees to monitor spending. Given the number of agencies contracting with Smith, I think it’s pretty evident that the guy has clout behind him and that agencies were simply ordered to pay him. You can bet that Quinn didn’t want to alienate someone by actually firing Smith.
Comment by Illannoyed Monday, Oct 17, 11 @ 3:40 pm
Oops. McEwen.
Comment by Illannoyed Monday, Oct 17, 11 @ 3:51 pm
Anyone who thinks this type of behavior is confined to DCFS needs to click thier heels together and see if they can return from over the rainbow.
There are those in other agencies who seem to think they are in place to service thier vendors and grant recipients and not the taxpayer. If someone has clout and you want them looked into you best have some heavy hitters on your side too.
I personally have a couple of things in front of IDOL that involve IHDA to some extent that have been largely shuffled around since 2007. For good reason of course. As a side note I have some land deals going if there are any takers out there.
Comment by Bemused Monday, Oct 17, 11 @ 4:19 pm
One fact - most the headcount drop was the end of 2002 when about 11,000 left under the ERI, with no plans to replace most of them. That was a huge brain drain on the State and anyone who stayed and was halfway competent has been overworked since then and bailed as soon as they hit the magic 85 + 1 day number. There is no doubt the State is shorthanded and it is only getting worse. Almost everyone I know still working has their departure date already calculated …
An opinion or two - Based on what I used to see when I was still working full time, the combination of waste and fraud easily exceeded 10% back then. (My definition is probably broader than yours; along with outright fraud it includes resume stamping incompetent political hacks rotating through management jobs every 6 - 12 months.) I’ve since been back to work for my former agency several times, and each time things were worse, which is just an invitation for trouble. Can I prove it with numbers? No, not from the outside … but I saw enough to know it is still pretty much “business as usual”.
Comment by Retired Non-Union Guy Monday, Oct 17, 11 @ 4:21 pm
Illannoyed
You got to be kidding right?
Or just too much silly sauce on the off day?
Under previous administrations, Blagoof and Ryan, fraud was usually rewarded with promotion or with Edgar you got outsourced to places like MSI.
BTW this report seems to suggest it was internal auditors and the IG that got the ball rolling
BTW-2 The internal auditors have been back in the agencies for some time.
Comment by CircularFiringSquad Monday, Oct 17, 11 @ 4:22 pm
“You got to be kidding right?”
CFS:
Then why didn’t Quinn fire him? Hmmm?
Comment by Chris Monday, Oct 17, 11 @ 4:43 pm
Is there a mechanism to claw some of this back?
Comment by soccermom Monday, Oct 17, 11 @ 5:02 pm
Federal Medicaid fraud estimates have been about 10% since the late 1970’s.
Comment by Cal Skinner Monday, Oct 17, 11 @ 6:21 pm
Dr. Smith has a long infamous history with DCFS. The government’s zeal to go after Blago seems to look the other way. Need one remind them of the former Chief of Staff for DCFS or the imprisoned former Deputy of External Affairs? Contracts that go back to early 2003 should be looked at. Seems everyone knew about Dr. Smith and done nothing.
Comment by concern citizen Monday, Oct 17, 11 @ 6:44 pm
Chris
It is believed PQ is operating with the same owners manual as Ryan, Blagoof and Edgar
And some say all thet federally funded stuff is too confusing.
Lots of words, no referendums
Comment by CircularFiringSquad Monday, Oct 17, 11 @ 6:53 pm
Concern, people should read your post closely. The staff augmentation contract needs to have an eye put on it as well.
Comment by Curious Monday, Oct 17, 11 @ 8:05 pm
what a lousy article, how was this guy a friend of mcewen’s and is it not possible that mcewen got duped by this guy, who said he had anything to do with this. AND why weren’t any names mentioned from those who wre duped at Chgo State Unv. and the other agencies. I mean really people, the crook appears to be Dr smith, not Quinn and Mcewen. Keep your flesh-fest in check people people
Comment by R A N R E E (aka maggie'sson) Monday, Oct 17, 11 @ 8:33 pm
===is it not possible that mcewen got duped by this guy===
Well, by refusing to cooperate with the investigation, which McEwen is required to do by state law, he brought an inordinate amount of suspicion on himself. And rightly so.
Comment by Rich Miller Monday, Oct 17, 11 @ 10:18 pm
There should be an independent review of all State contracts. Its now the new form of patronage. Just look at the names of some of the organizations that receive contractual funds.
Comment by Reformed Monday, Oct 17, 11 @ 10:30 pm