10.01.2008 0

Iowa Agency Stole $1.5 Million

  • On: 10/09/2008 11:18:11
  • In: Government Transparency
  • In bringing closure to one of the worst public corruption scandals in Iowa’s history, Ramona Cunningham, the former head of the Central Iowa Employment and Training Consortium, is being prosecuted in Federal court for funneling agency funds into the pockets of agency executives.

    So reports
    the Des Moines Register:

    “Ramona Cunningham made $89,153 in workday withdrawals from casino cash machines over a three-year period during which roughly $1.5 million in taxpayer money was misspent at the job-training agency she headed, federal court records allege.

    “The records, evidence in last month’s CIETC trial, show 411 withdrawals between July 9, 2003, and March 21, 2006.

    “Federal authorities last month cited on-the-clock gambling – and lies on government time sheets – as evidence of Cunningham’s role in a plot by former officials at the Central Iowa Employment and Training Consortium to funnel government job-training money into the pockets of agency executives.

    “Cunningham, the lone CIETC defendant left to face trial, faces 30 allegations of fraud, conspiracy and obstruction of justice.”

    This is one of the most egregious corruption scandals in Iowa’s history, but it follows a long litany of abuses by the CIETC since Cunningham was appointed its head:

    “June 2003 – Archie Brooks begins to personally award huge raises and bonus payments to CIETC’s top staffers, including Ramona Cunningham, the agency’s CEO, and John Bargman, the chief operating officer. On June 23, he signs a deal that results in the two staffers’ pay being increased more than 70 percent. Over the next 12 months, Cunningham will collect $254,000 in pay.

    ‘August 2003 – A CIETC worker’s job is eliminated due to budget shortfalls and the board meets to discuss ways to save money. Over the course of the next year, CIETC will pay out several hundred thousand dollars to Cunningham and others in the form of bonuses.

    “July 2004 – Cunningham writes to the Polk County Board of Supervisors, asking for $250,000 in additional taxpayer money to make up for ‘drastic’ budget cuts at the federal level. She says the money will be used to help serve the unemployed people of Polk County. The board agrees to provide the money. State auditors will later conclude that a ‘substantial portion’ of this money is used to pay out additional bonuses, with Cunningham herself collecting $28,400 of the county funds.

    “December 2004 – Department of Labor officials review CIETC’s finances and tell the agency of concerns they have with executive pay, pointing out that the size of the salaries and the reasons for bonuses appear to violate regulations on the use of public money. The department takes no action to either halt the practice or demand repayment.

    “January 2005 – Archie Brooks approves a new compensation contract for Cunningham, giving her a 30 percent increase in base pay, plus bonuses. Cunningham finishes the year with $368,236 in pay, making her one of the highest paid public officials in Iowa. Bargman also gets a 30 percent increase in base pay. CIETC sends copies of the executives’ contracts to the Labor Department for review. Department officials signal their approval in an e-mail, saying the contracts ‘seem to address all of the issues that have been raised’ during the previous financial review.

    “June 2005 – Iowa Workforce Development, a state agency that helps fund and oversee CIETC, realizes that the end of the budget year is 48 hours away and the agency has $225,000 in unspent job-training funds to hand out. Iowa Workforce Deputy Director Jane Barto talks to Cunningham, who allegedly indicates that the consortium could spend the money on employee cost-of-living increases. Two days later, with only a few hours remaining to spend the money, Iowa Workforce budget analyst Kelly Taylor personally hands Cunningham a handwritten check for $200,000. Months later, when Taylor’s staff prepares to review CIETC’s use of the money, Barto allegedly intercedes, asking what Taylor plans to look at, and noting that Cunningham has expressed a concern that Iowa Workforce is ‘out to get CIETC.’

    “September 2005 – Archie Brooks again gives raises to the agency’s top officials. Cunningham’s base pay is increased to $186,908. At this point, her contract allows her to take up to three months of paid time off during the year. It also includes a very unusual provision that allows for post-mortem compensation, with her salary to be paid out until the end of the month in which she dies. Auditors will later point out that federal rules prohibit the payment of salaries to the dead.

    “Nov. 3, 2005 – Taylor, the budget analyst at Iowa Workforce Development, discovers how much the top CIETC executives are earning in base pay, and also learns that the $200,000 check he gave to Cunningham for CIETC’s cost-of-living pay increases was used for bonuses. Taylor alerts a Labor Department official.

    “Nov. 8, 2005 – Taylor informs his boss, Jane Barto, that he is investigating the matter. According to Taylor, Barto is not pleased that federal officials have been alerted and she pulls Taylor off the investigation while she meets with CIETC officials. State auditors will later question Barto’s friendly “relationship” with top CIETC executives.

    “Nov. 9, 2005 – Barto meets with CIETC executives Cunningham and Bargman. Taylor is excluded from the meeting. The next day, CIETC board chairman Archie Brooks meets with the full CIETC board and asks them to formally ‘reconfirm’ his authority to personally award bonuses to the staff. The board agrees. Four board members – none publicly identified – later tell state auditors they have no idea how much money the agency has been paying out in bonuses and base salaries.

    “March 2006 – State auditors publish their findings, calling executive pay at CIETC ‘unreasonable’ and a violation of federal standards. The auditors point out that the huge bonuses could have been used to help the unemployed or the underemployed. Their findings are referred to state and county prosecutors and to federal investigators. Auditors also criticize Barto and Iowa Workforce Development for a lack of oversight.”

    Basically, where there’s smoke, there’s fire. Such a long line of abuse by any agency should be cause for increased public oversight. Ms. Cunnigham obviously should have been fired long before she was prosecuted, and it is no wonder she thought she could continue to get away with her theft of the people’s money.

    This example should serve as warning to public officials who believe that tax dollars belong to them: You are being watched, and you will be caught with your hands in the taxpayer-cookie jar.

    ALG Perspective: Ms. Cunningham’s violation of the public trust as the head of the CIETC agency is simply as disgusting and infuriating a case of public corruption as there can be. It is no wonder that the people’s opinion of government at all levels is at an all-time low. Because, the more they find out, the more they turn their noses at the obvious abuses that take place every day in government. They think it stinks, and they do not have to stand for it.


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