New York City Terminates Community Health Contract with Troubled Nonprofit

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November 23, 2015; DNAinfo New York

The trend of outsourcing key public services to private nonprofits is growing in this era of shrinking government. With it comes risk, as agencies end up contracting with community-based organizations but fail to exercise adequate oversight or fully vet those organizations.

In New York City, a $4.2 million no-bid city contract that was designed to help Mayor Bill de Blasio’s first major health initiative was pulled from a nonprofit whose director has been fired, according to DNAinfo New York, a local news website.

The “Community Health Worker” program was based on an initiative to hire community workers who would be placed in housing projects to bridge the gap between the medical providers and the neediest New Yorkers, aimed at helping at over 1,200 residents. It was a key part of the mayor’s initiative establishing community health managers in city housing projects.

The contract, let to the Northern Manhattan Perinatal Partnership in Harlem, was terminated only a year after the city’s health department gave it a three-year deal. The website said that “in addition to concerns about meeting targets on the number of residents who were getting assistance, sources said [executive director Mario] Drummonds ran the nonprofit as his personal fiefdom that he ruled with an iron fist.”

Contractors hired by the nonprofit wrote to the health department complaining that Drummonds and his managers were erratic, abusive, and appeared to be living “high off the hog,” the article said. In response, the department warned Drummonds in July that he risked losing the contract if problems persisted, but within a month, there was a new round of allegations, this time involving a female staffer who filed a police report alleging that Drummonds had threatened her.

These allegations eventually reached New York’s health commissioner, who instructed city lawyers to find a way to terminate the contract “without cause.” Shortly thereafter, Drummonds was fired by his board. The city gave the contract to another nonprofit, the Fund for Public Health, which is largely controlled by the health department.

Last year, de Blasio announced the creation of a “Center for Health Equality,” with the Community Health Worker program as a key component. The program was rolled out in the city’s neighborhoods with the highest incidence of asthma, diabetes, and hypertension, but DNAinfo New York said using health department forces was slow going. That’s why the city decided to outsource the program to community-based nonprofits that had experience in recruiting and training health workers, as well as providing health and family support services.

The Northern Manhattan Perinatal Partnership was a $10 million-a-year operation that was funded by the federal, state and city governments. Drummonds ran it for the last 16 years, and was credited with its expansion, but he ran into trouble last year when he hired a career criminal without conducting a background check. The individual was subsequently terminated, but went on to victimize women in New York and three other states.—Larry Kaplan