Did Bloomberg’s Staff Turn a Blind Eye to Phantom Job Placements by SEEDCO?

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August 8, 2011; Source: The New York Times | SEEDCO has long been a nonprofit intermediary with a solid track record, but an article in The New York Times by top-flight reporter Michael Powell suggests a brewing accountability problem. Although active nationally with programs on workforce development, small business financing and other economic development ventures, SEEDCO has a major center of activity in New York City, including $15 million in contracts with the City government. One of its City contracts is for job counseling and job placements, but unfortunately a scandal of allegedly falsified reporting has emerged, making SEEDCO look not so good.

Powell writes that a deputy director at a SEEDCO job center named Bill Harper began finding a pattern of falsified reports, purportedly by SEEDCO staff, in which the dates of clients’ past employment were changed to make them look like new and current job placements. He discovered some 400 phantom placements, important to SEEDCO because the city pays it a bonus for successful placements. 

Harper decided to do the right thing and brought the evidence up the chain within SEEDCO this past April. SEEDCO did an internal audit, said there were only 60 such fraudulent records, and the City nodded in satisfaction with SEEDCO’s review. Harper quit in June, ostensibly “in disgust” with the SEEDCO audit and the City’s failure to conduct any sort of check whatsoever. 

Was SEEDCO right that there were only 60 bogus records? Reporter Powell picked 14 random forms from Harper’s pile of 400 and called the clients. All 14 of these allegedly placed clients had had their records falsified, with past jobs listed as current jobs. A SEEDCO rep said that the organization looked “at every single piece of paper in our audit,” but admitted that they hadn’t made any calls to verify the data. Of what value was the audit, then? What did it look for? Erasures and white-outs?

According to Powell, SEEDCO then launched a “counterattack” on Harper. Powell writes that SEEDCO “hinted darkly that I did not know [Harper’s] true story” and offered to talk off the record before sending the reporter to a political consultant with ties to SEEDCO’s new director Barbara Gunn, a former aide to Mayor Edward Koch. All that SEEDCO ever produced to sully Harper’s credibility was a supervisor’s memo, written two weeks after Harper’s complaint about the falsified forms, stating that he had ordered office chairs without appropriate approval. The City defended SEEDCO and joined the attack on Harper, with Angie Kamath, the deputy commissioner of small-business services, weighing in to say, “I would think that if he were seriously concerned about the integrity of data, he would come to us and not The New York Times.” Is this what happens to whistleblowers in Mayor Bloomberg’s administration? 

It looks to us that in this instance, Michael Powell smelled a rat and his olfactory senses were working just fine. – Rick Cohen

  • Lauren Miura

    Seedco conducts all of its work with integrity and a deep commitment to advancing economic opportunity for those in need. We dispute the negative assertions in the original article and the unfortunate recounting here of those uninformed assertions. We encourage readers to visit our website, http://www.seedco.org, for our official statement.

  • Andrea John-Smith

    Thank you for writing this article to allow more light to be shined on this murky situation. Advise to SEEDCo, admit what you actually didn’t get right so you can clear the air. Stop trying to throw one of your former directors under the bus. Makes you look guilty, whatever the full story.