One of New York’s largest nonprofit job placement agencies falsely claimed to have helped find jobs for at least 1,400 people in less than two years, according to the city’s Department of Investigation.
The agency, Seedco, the investigative agency found, “developed systematic practices to report false placements” to the city’s Department of Small Business Services. In many hundreds of cases, Seedco, which is an important part of the Bloomberg administration’s ambitious efforts to find jobs for the unemployed, took a jobless client’s work history, altered dates and claimed past employment as a new job.
The investigative agency noted that the number of fraudulent claims could be much higher. For three years, from 2008 through February 2011, city officials “deemed it acceptable” for its nonprofit contractors to shred all job placement documents.
The New York Times, in two articles last summer, revealed these and other abuses after a former deputy director at a Seedco center, Bill Harper, provided 400 examples of false placements. Later, six former Seedco employees said managers had pressured them to produce thousands of fake job placements.
The Department of Investigation noted that Seedco responded by dismissing allegations of fraud as untrue and attacking the credibility of Mr. Harper. Even as agency officials took this public posture, investigators noted, senior staff members privately had unearthed an e-mail pointing to fraud.
Perhaps most confounding, city investigators discovered Seedco employees’ entering false job placements into its database as recently as last month.
The Bloomberg administration gives “performance-based” payments to nonprofit job contractors that produce high numbers of job placements. And at the time of the alleged fraudulent job placements, Seedco was competing to win a new multimillion-dollar contract to run a work force center in the Bronx.
Mayor Michael R. Bloomberg has lauded Seedco and its work in meeting his administration’s aggressive job-seeking goals. Seedco, with a board that is a who’s who of nonprofit royalty in the city, now holds $22.2 million in contracts from the Department of Small Business Services. Seedco also holds welfare-to-work contracts with the city.
Will Bloomberg be held accountable for this scandal?
Will any city official be held accountable?
They should be:
The city’s investigation report raises a question of why city officials did not push harder for answers. It does not suggest any complicity by city officials.
But last August, when the deputy commissioner of small-business services, Angie Kamath, was asked about allegations of fraud at Seedco, she insisted at first that no investigation was needed. “We have internal closure,” she said.
She said that if Mr. Harper was “seriously concerned about the integrity of the data,” he should have come to the city rather than The Times.
Yeah, city officials really seemed like they were going to get right on that investigation.
And once again, it is Bloomberg's unrelenting push for ever-higher performance goals that brought about the fraud:
Seedco no longer allows managers to judge employees based on their ability to meet aggressive job placement targets. Seedco notes, too, that it does not profit from its job placement work.
That excuse understates the pressure on nonprofit groups when it comes to job placement. As the city’s investigation department notes, nonprofit groups, not the least Seedco, are engaged in a highly competitive race for new city contracts. In Seedco’s case, agency officials pressured workers to produce more and more fraudulent job placements even as the agency sought a large new contract to open a job center in the Bronx.
Relentless competition always brings out the best in all of us, doesn't it?
I'm sure when Governor Cuomo and Mayor Bloomberg get their way next year and start pitting teachers against each other on a big state-wide bell curve built from relentless test score-based performance goals, nothing like what happened at Seedco will happen in the school system.