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Atlanta squandered jobs money

Payments made for phantom workers, useless instruction

By Willoughby Mariano and Steve Visser - The Atlanta Journal-Constitution



As Atlantans lost their jobs to the Great Recession, the city’s workforce agency squandered emergency federal grants to retrain them , recklessly paying hundreds of thousands of dollars to companies that billed  for phantom workers or token or non-existent training, an Atlanta Journal-Constitution investigation found.

Much of the on-the-job training money ended up in the pockets of companies with ties to city insiders, the AJC found.

Some companies won the grants, which covered up to 90 percent of workers’ wages, for so-called trainees who already had permanent jobs and even advanced degrees. Many supposed participants never knew they were part of a job-training program at all.

It’s uncertain how many people the city said were trained found permanent work, which was the program’s goal. City records put it at one in five, although controls were so shoddy that auditors couldn’t confirm that. Some companies dumped trainees after only a few months.

In awarding the grant money, Atlanta Workforce Development Agency failed to vet companies and didn’t bother to check if training actually took place. All the while, it cozied up to its most questionable employers, handing them money and singing their praises even when they were unqualified to teach skills they promised workers.

While grants apparently resulted in real training at certain businesses, spending at others bordered on the absurd. The city paid a nightclub owner to train construction workers at a long-shuttered homebuilder, as well as teachers at a daycare center that inspectors said repeatedly violated state safety rules. The daycare’s head was listed to be trained as her own assistant director, records show.

And, unwittingly or not, a convicted murderer, a Metro Atlanta Chamber Business Person of the Year, the police chief’s son and a family physician were among those caught up in this government giveaway.

The AJC has learned that the U.S. Labor Department’s Office of Inspector General is now investigating.

Mayor Kasim Reed denied interview requests and gave no direct responses to questions submitted by the AJC. In a written statement, he said AWDA does important work and a consultant is reviewing it as part of an assessment of the city’s workforce development strategy.

“Its mission of providing job training, skills and opportunities to our citizens is too important to get wrong,” Reed said.

 

In the know

Employers in the city’s program, funded with federal stimulus dollars through the Workforce Investment Act, said it was a boon for business. In exchange for providing on-the-job training to the unemployed, working poor or those about to lose their jobs, the companies got workers for a pittance. The bulk of trainees’ wages were paid by the grant money for as long as six months.

“Every single small business in Georgia needs to know this program exists,” said Dr. Cecil Bennett, whose company Bennett Group Management received grant money.

Hundreds of businesses might have qualified. The program was open to those in operation for three or more years that would pay at least $8 an hour.

Not that they had a chance. AWDA didn’t advertise these grants. Instead, businesses got word through city officials or others in the know.

One got word through City Hall connections. At another, AWDA’s executive director was a regular. Others heard from colleagues or had ties to city government.

AWDA took these companies under its wing, sending job applicants to their doors and writing contracts for each trainee. It even broke its own rules by giving grants to new businesses.

Of all of the insiders, AWDA turned the most to unsuccessful political candidate and former city budget analyst Kevin Edwards.

The nightclub owner and real estate investor got some $642,000 of the city’s $1.6 million in on-the-job training money from July 2010 to mid-2012.

By the city’s reckoning, Edwards was a shining example of AWDA’s success, even though the AJC found none of his companies followed the rules.

Saying he was a vice president of homebuilder Cronus Development, Edwards signed contracts to teach 50 AWDA clients how to use a “measuring tape, hand tools, ruler, power saw, woodworking machine, plum(sic) bob and level” for work as a “construction carpenter.”

“Cronus is a leader in helping to ‘keep Atlanta working,’” AWDA’s website said.

But Cronus owner LeQuarmie Carter says Edwards had nothing to do with the company.

What’s more, Cronus stopped operating when the real estate market began to implode — three years before the contracts began, said Carter, who partnered with Edwards in other companies.

It never trained construction workers or carpenters, he said. Even if it had, Edwards would not have been able to train them. “I’ve never seen him do any manual labor, ever,” Carter said.

Those listed in AWDA contracts as Edward’s trainees said they did everything but carpentry.

Walter Miller’s contract said he would be paid about $1,040 every two weeks as he learned to read and follow blueprints, build cabinets, install flooring and inspect structures for damage.

Instead, he said he was paid $800 to gut rental properties, evict tenants, paint, cut grass, and haul food and alcohol into one of Edward’s nightclubs.

Edwards fired him and other program trainees after a few months and hired replacements. A federal investigator later approached Miller and said Edwards shorted him. “That is what the federal investigator told me — that he [Kevin] misused funds,” Miller said.

Edwards declined interview requests and directed media inquiries to Steve Sadow, a top Atlanta criminal-defense lawyer.

 

From nightclubs to daycare

Cronus was just the beginning. Starting in July 2011, AWDA awarded Edwards grants to train two dozen other carpenters through CGE Construction and Consulting, incorporated by Edwards, Carter and former Atlanta resident Erik Guberman a year earlier.

CGE didn’t need any workers in the months before the contracts began, Guberman said. Business at the residential rehab company had evaporated.

“That’s why I left Atlanta. There was absolutely no work,” Guberman said.

That did not stop AWDA. It hooked Frank Williams up with CGE after he was laid off from Hartsfield-Jackson International Airport.

Williams was supposed to be paid for 40 hours of training each week, his contract said. Instead, he worked odd jobs part time and shadowed a carpenter or electrician every now and then.

“It was, ‘Grab the lawnmower. Can you do this for me?’” Williams said. He left CGE after two months for a better position as a dishwasher.

AWDA also signed up Duane Ible. He had registered to find work through the agency’s online system. But while no one from the agency ever called him, his name and social security number ended up on a $7,500 CGE training contract.

Ible said he never heard of Edwards or his company, much less worked for them. “The only way they could have got my information is off the computer,” Ible said.

When Edwards entered the daycare business in 2011, AWDA followed, even though the business was new and he was even less qualified to train child care workers than carpenters.

Child care trainers are supposed to be certified by the state, yet an AJC record search found no evidence that Edwards, his The Elite Academy and Learning Center, or its employees had required training credentials.

According to an AWDA contract, Brittney Harris was to be trained as an assistant day care director. But she was already listed in state Department of Early Care and Learning records as the director of the Panthersville Road facility, as well as president of its parent company. She declined interview requests.

Another person listed as a daycare trainee apparently had another job: She was listed as a corporate officer at The Indigo Bar and Lounge, a nightclub Edwards ran with Carter, and at Mingles, a bar and restaurant that lists Edwards as CEO.

The south DeKalb daycare itself was an unlikely training site. State inspectors twice found safety violations and Elite shut down after nine months.

 

Instruction in ‘lots of things’

Each grant recipient seemed to give AWDA a chance to fritter away federal money in different ways. Businesses were paid to train people they already employed, give instruction that employees said they did not need, teach skills they were not licensed to provide, or do a combination of these things.

At Atlanta Human Performance Center, a physical therapy practice and fitness center where AWDA Executive Director Deborah Lum worked out, owner Keith Evans praised the program’s impact on his bottom line. He received $73,000 of the federal grant money.

“It has been a really great program for me,” Evans said. “It has helped me survive.”

His supposed trainees said it didn’t help them at all. While they worked at the practice, they said they were unaware of the training.

Contrary to city records, Clark Payne said he never received instruction on being a physical therapist. He did not want to become one, and he and other listed trainees said they did not need government help. They were fresh out of college with bachelors or masters degrees in health and fitness-related fields.

“Nobody went to a training program up there,” Payne said.

Thaddeus Turner, the son of Atlanta’s police chief, was an Ohio University football standout and had just ended a stint on the New England Patriots practice squad when he started at the center.

Records show Turner was supposed to learn athletic training. But city spokesman Carlos Campos, who responded on behalf of Turner, said he never participated in the training program.

Workers had a ready explanation for how their personal information ended up on grant contracts without their knowledge. After they handed Atlanta Human Performance their resumes, they were told to re-submit the information at AWDA’s office. They weren’t told why.

At Summerset Assisted Living, a home for the elderly, a human resources manager took employees in groups to register at AWDA. By the time Sundra Blanchard went, she had been employed there for six months as a licensed practical nurse.

The manager said that employees were entering a “training partnership” program but did not give details, Blanchard recalled.

“I remember saying to him, ‘OK what are you going to train me for?’ He said there are lots of things we can be trained for and kind of blew it off,” Blanchard recalled.

Most of those named in AWDA contracts as Summerset’s LPN and certified nursing assistant trainees had been credentialed for years, state records show. Blanchard was licensed in 1997.

Even if trainees needed on-the-job instruction, Summerset was not licensed to conduct lab tests or provide other services it promised to teach, according to the state Department of Community Health.

Owner Mack Willis Sr. — who found out about the program during a visit to City Hall — described the lapse as a misunderstanding.

“I don’t believe we had to train them on every single item in the contract,” said Willis, a 2011 Metro Atlanta Chamber Business Person of the Year.

None of the listed trainees still work at the company, he said.

 

Records wrong?

At health care and medical education company Bennett Group Management, AWDA provided grants to train 19 people in information technology, public relations and school admissions, among other things.

CEO Bennett, who also has a family medical practice, declined to give details on how his 12-employee operation was able to provide instruction in so many fields. “Come on. I can manage people,” he said.

Bilquis Martin said she had been employed there for months when the office manager told her to fill out AWDA forms. She balked and then was fired when she raised questions about the jobs program.

“It didn’t feel right to me and I didn’t want to get caught up in anything,” Martin said. Bennett accused Martin of having an “axe to grind.”

Another employee listed as a corporate officer at Bennett’s medical practice was supposed to be trained as business manager at $17.50 an hour, records show. Bennett said the employee’s new position required additional skills. State records listed him as a corporate officer by mistake, he said.

Bennett would not say how he found out about the program, but he said Lum told him he could be paid to train his current employees.

 

Unanswered questions

Companies that did not teach trainees or repeatedly failed to provide permanent work could be booted from the program.

But the city refuses to answer questions about whether it took action against any.

Nor will anyone comment on who at the agency should be held responsible for the program’s failings.

Should someone have raised a red flag before awarding contracts to Edwards because of his history of debts, such as tax liens and the $625 he owed to the state ethics commission after failed bids for city council and state representative? The city will not answer the question.

Why did AWDA sign training contracts days if not weeks after trainees were supposed to have begun work? Did anyone notice that one trainee would have to work up to 80 hours a week to meet deadlines? No comment.

The person AWDA made responsible for signing most of the contracts is a convicted murderer with no real work experience, the AJC found.

Sean Culmer joined AWDA in the summer of 2009 as a $40,000 per-year career counselor and supervisor, although he had barely ever held a job. That’s because he had spent the prior 25 years in an Ohio prison for the strangling death of his Oberlin College girlfriend.

His job application states that from January through April 2009, he performed on-site evaluations as a workplace safety technician for a Marietta business owned by his stepfather, a former member of the state board that oversees the job-training funds.

In fact, Culmer was not paroled until March 19, 2009, records show.

Culmer told the AJC he only checked that paperwork was filled out correctly and that Lum was responsible for vetting businesses.

He directed further questions to Lum, who declined comment. She said she had been reprimanded previously for talking to the news media.

However dubious AWDA’s methods may be, Mayor Reed and grant recipients continue to describe its problems as management shortcomings, not fundamental failings.

Bennett blames any on-the-job training troubles on poor agency guidance.

“It’s not my fault. I followed the protocol they gave me,” Bennett said. He added that problems were far outweighed by the program’s benefits.

It all comes down to jobs, Bennett said. AWDA paid him nearly $140,000 for training. He hired employees and gave current ones raises of $2,000 or more per year. That’s good for workers, his business and Atlanta.

“We’re supposed to try to get down the unemployment rate. How better to try and do that than to have programs that try to do this?” Bennett said.


Top recipients

Over a two-year period, Atlanta Workforce Development Agency received $1.6 million in federal on-the-job training grant. These businesses were among the top recipients the AWDA money.

On-the-job training providerTraineesSubsidy
Cronus Development LLC50$385,370
CGE Construction and Consulting24$174,564
Bennett Group Management19$139,868
The Elite Academy and Learning Center13$82,066
Atlanta Human Performance Center7$73,762
Summerset Assisted Living18$62,770
Totals131$918,400

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