LAWRENCE — The region’s largest anti-poverty agency yesterday agreed to pay nearly $100,000 in fines and legal fees to settle allegations it used federal grants to pay four top employees — including its former executive director — while they played poker at an Elks Club, golfed and worked elsewhere while on the agency’s clock.
The Greater Lawrence Community Action Council also agreed not to dispute the allegations outlined in the settlement, whose seeds were planted by a series of Eagle-Tribune stories two years ago alleging fraud, mismanagement and nepotism at the agency and by a whistle blower’s lawsuit that followed.
The settlement with U.S. Attorney Carmen Ortiz also leaves open the possibility that Ortiz can pursue criminal charges against GLCAC employees suspected of wrongdoing, although a spokeswoman for Ortiz yesterday would not say whether the agency would.
The federal complaint that led to the settlement alleged that the wrongdoing at GLCAC went further than what the newspaper uncovered in its series of stories beginning in March 2011, by contending that the acting executive director who was brought in to clean up the mess had a management style that made him part of the problem. The newspaper series led to the resignations of former Executive Director Philip Laverriere and his top deputy, Charles Lopiano, and more than half the members of its board of directors, which now has 19 members.
Among the new revelations, Ortiz alleged that GLCAC used state and federal grants earmarked for the Methuen Even Start program, which provides social services to poor families, to buy Red Sox tickets for employees and to send them to amusement parks, arcades, golf tournaments and whale watches.
“Agencies receiving taxpayers’ dollars are expected to have a sense of integrity and to utilize funds for the actual purposes for which they are intended,” Ortiz said in announcing the settlement. “Communities suffer when funds are used inappropriately to subsidize employee moonlighting or recreational activities.”
The U.S. Attorney’s office is the third government agency to impose fines or demand reforms at GLCAC since the newspaper revealed some of the problems inside its prominent Essex Street headquarters two years ago. The agency has a $28 million budget — 99 percent of it funded by the state and federal governments — employs about 300 people and provides child care, heating assistance and other social services to 29,000 clients in Lawrence, North Andover, Andover and Methuen.
After an investigation of its own, the state Division of Housing and Community Development in April 2011 blasted what it said was a sexist culture at GLCAC, ordered 40 reforms and a raft of resignations, and designated it a “troubled agency.” The designation could have led to a loss of its state and federal funding, but did not. It was removed after a year.
Nine months later, the federal Department of Health and Human Services ordered more reforms and directed GLCAC to repay $157,000 in misspent HHS funds. The refund included $57,282 of the salary it had paid to Laverriere, the former executive director who was spending half his workweek playing cards and video poker at the Elks Club on Andover Street.
GLCAC also has settled a lawsuit alleging harassment by Laverriere, Lopiano and Christian Dame, the consultant who was brought in as acting executive director reform the agency after Laverriere and Lopiano were pushed out.
The harassment complaint was brought by Ruth Tarbox, a former administrator whose earlier suit alleging fraud and misconduct at GLCAC was taken over by the U.S. Attorney, resulting in yesterday’s settlement.
Tarbox quit her $49,000-a-year job on Nov. 11, 2011 — she called it an “involuntary resignation” — because of the harassment she said she faced after pointing out the misconduct to her superiors, to the agency’s board of directors and finally to Dame. Among other things, Tarbox alleged that before attending a business lunch with Lopiano, she was warned by Laverriere to “Watch out for Chick. He’s a sex addict.” “Chick” is Lopiano’s nick name.
In a later alleged incident, she said Dame responded to her complaints about the work environment and Dame’s own “hostile-like management style” by telling her, “I am the executive director. I could fire you tomorrow.”
“There was such a pervasive culture of fraud and abuse and denial,” Tarbox, who now teaches in an Andover elementary school, said yesterday. “So many people were mistreated. I wanted to right a wrong. It was difficult being told that I was imagining things, or not to worry about it, or that I didn’t know what I was talking about, that I was a kid.”
Dame said yesterday that it would be “inappropriate and unhelpful” for him to respond because he was unaware of any of the settlements. Laverriere and Lopiano could not be reached.
Tarbox’s lawyer, Robert Autieri, would not disclose what Tarbox was paid to drop her harassment claim, but said it was paid by a GLCAC insurance company.
Tarbox has a second suit still pending against GLCAC, accusing the agency of retaliating against her, including by pressuring her to quit when she pointed out wrongdoing and mismanagement.
The settlement Ortiz reached with GLCAC yesterday does not address many of the issues raised in the complaint against the agency that she and Tarbox filed in U.S. District Court on December 2011. Instead, the settlement focuses sharply on the conduct of Laverriere and three other employees. The three others are George Peters, GLCAC’s former facilities director, who was accused of playing golf at Merrimack Valley Golf Club on GLCAC time; and program director Susan Mitchell and case manager Traci Connor, who were accused of working other jobs on GLCAC time.
Peters and Connor have left GLCAC and could not be reached yesterday.
Mitchell said the job she is alleged to have worked on company time was an unpaid internship with the Massachusetts Society for the Prevention of Cruelty to Children needed to earn a master’s degree in social work, which she said was relevant to her work at GLCAC. Ortiz alleged that Mitchell was getting paid for the work and that it was not an unpaid internship.
The United States was able to join Tarbox’s suit, essentially taking it over, under a Civil War-era law that was intended to assist whistle blowers exposing wartime contractors who were providing the Union Army with diluted ammunition and other supplies of poor quality.
As the whistle blower, Tarbox will get $11,500 of the $80,282 that GLCAC agreed to pay as part of the settlement.
The U.S. Attorney agreed to credit GLCAC for the $57,282 it already has paid in retribution to the state Division of Housing and Community Development, reducing the settlement to $23,000,including the payment to Tarbox.
GLCAC also will pay Tarbox’s lawyer, Robert Autieri, $16,272 to cover his legal fees.
At the agency yesterday, Evelyn Friedman, its new executive director, said the settlement is “fair all around and the best under the circumstances.” She said reforms are continuing.
“You don’t turn a ship like this around in a few months,” Friedman said.
“Part of the culture was that there wasn’t a good policy about how to handle all kinds of personnel issues,” she added. “When you don’t handle them in a professional matter, you get these allegations, whether or not they’re true. You get the feeling people aren’t being listened to, that rules aren’t in place. We’ve stopped that here.”