Pasco officials say CareerSource Tampa Bay blocked county from federal funds with 'unethical' grant application

In 2016, Pasco County leaders saw a federal technology grant as the perfect way to inject millions of dollars into a dreamed-about high tech district in Wesley Chapel.

The feds, however, turned them down.

Confused, the leaders asked for an explanation. What they learned left them indignant.

The president and CEO of CareerSource Tampa Bay and CareerSource Pinellas, Edward Peachey, had listed Pasco as an area affected by the winning grant application.

Peachey had called the bid a regional effort, but workforce leaders in Pasco say they knew nothing about it and never participated in the program. Nonetheless, Peachey's jobs center secured the $3.8 million TechHire Partnership Grant to train 1,000 young workers for careers in IT and healthcare.

The move may have blocked Pasco from making its own successful bid, leaders say now.

"They put us on the application without our permission," Pasco commissioner Kathryn Starkey said. "It's frustrating that you can dupe the feds like that."

Peachey wrote in the application that his agency was "the lead applicant in a consortium of workforce investment boards, non-profit organizations, employers, and educators." In addition to Pasco, he listed Hernando, Manatee, Polk and Sarasota counties as areas to be served by the grant along with his counties, Pinellas and Hillsborough.

Like Pasco, officials in those other counties told the Tampa Bay Times that they did not know they were included in the application, nor have they received any money from the grant.

They also said it's unusual in grant applications to list other counties unless each one submits a partnership agreement.

"It's just highly unethical to list somewhere else when you don't serve that area," said Bill Cronin, president and CEO of the Pasco Economic Development Council.

Now the Florida Department of Economic Opportunity is asking county officials what they knew about the TechHire grant amid a wider probe into whether Peachey's agencies improperly reported job hirings to the state.

When asked in person about the grant, Peachey twice declined to comment, explaining that his lawyer had advised him not to speak to reporters anymore. The lawyer, Marion Hale, also declined to comment.

• • •

Peachey, who had years of experience securing federal training money, sought the funding from the U.S. Department of Labor through a White House initiative to expand technology jobs across the country.

The government asked what counties and cities the grant would serve.

"Hillsborough, Pinellas, Pasco, Hernando, Sarasota, Manatee, and Polk," the March 2016 application stated, adding: "St. Petersburg, Clearwater, and all other cities within the above counties."

Most of the businesses that joined the effort were clustered in Hillsborough. They included Celestar Holdings, Advanced C4 Solutions, Cognizant, IBM, the Cybrix Group and Mobile Apps Media.

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Each business signed agreements to hire people who received training from the grant, according to the application.

Other supporters included the University of South Florida; the Greater Tampa Chamber of Commerce; the economic development offices in Pinellas and Hillsborough counties; and the Tampa Innovation Alliance, a group of companies working to form a technology hub around USF.

U.S. Rep. Kathy Castor, D-Tampa, championed the effort, though she says now she did not know the application would list other counties.

The effort paid off.

The Obama White House, which awarded 39 grants worth $150 million in 2016, gave CareerSource Tampa Bay $3.8 million.

The grant would be the "foundation for long-term sustainable employment" in the university area, Peachey said in a June 2016 news release after winning the money. The news release did not mention it benefitting any other counties.

Former Hillsborough County commissioner Mark Sharpe, the leader of the Tampa Innovation Alliance, said it was his idea to seek the grant for the north Hillsborough area, not the other counties listed in the application.

"I wasn't aware that it included Sarasota and Manatee and other areas," Sharpe said. "We were part of the application, but CareerSource handled it. We did not submit it."

Luz Heredia, vice president of operations at CareerSource Polk, said leaders at her agency were also unaware their county was listed in the application.

"We would have needed to agree to apply with them," said Heredia. "We would have submitted a letter of support. We did not do that."

• • •

Leaders in Pasco, more than anywhere else, are frustrated that Peachey won the TechHire funding and that the federal government didn't check with each county listed in the application.

"They should have asked us," said Starkey, the county commissioner.

The U.S. Department of Labor did not respond to a request for comment.

The federal guidelines for the grant application were "poorly written" and could have allowed anyone to list all of Florida's 67 counties, according to Cronin. Regardless, he said, Peachey "overstepped" his authority by listing other regions.

"This is a pretty significant grant," Cronin said. "He did not speak for us."

After being turned down by the White House in 2016, Cronin said Pasco officials asked Peachey for an explanation, but did not get a response.

Jerome Salatino, who leads the CareerSource office in Pasco and Hernando, said Peachey or someone from CareerSource Tampa Bay should have worked with Pasco officials as soon as the agency won the grant. He said he is not aware of anyone in his counties who has been helped by Tampa Bay TechHire.

Last month, around the same time reporters began asking questions about the grant, CareerSource Tampa Bay started offering services to Pasco through TechHire. Cronin and Starkey said it was the first time they knew of Pasco receiving any direct benefit from the program.

A CareerSource Tampa Bay program director on Feb. 26 emailed Starkey, the county commissioner, saying the jobs center would hold outreach events and hang fliers in libraries, stores and restaurants. It ran an information session at a Dade City library on Feb. 1. Library officials could not recall hosting any other TechHire events in Pasco before that day.

Cronin sent a staffer to the session. Three residents showed up, he said, including two senior citizens and one local worker.

None were eligible to participate in TechHire.

Starkey wonders: "What are they doing to help our residents?"

• • •

CareerSource officials would not talk to the Times in detail about how the program helped the other counties listed in the grant.

On Feb. 26, Richard Peck, the chairman of CareerSource Tampa Bay, said he would provide the Times with documents on who exactly TechHire helped. Nearly three weeks — and several requests later — neither Peck nor CareerSource has delivered those records.

Juditte Dorcy, the interim director of CareerSource Tampa Bay, provided a brief update on TechHire during a March 8 executive committee meeting. As of December 31, she said, the agency had served 820 people through TechHire, but she did not explain what that meant.

A week after the meeting, the agency gave the Times a two-page report that showed 86 people have "entered unsubsidized employment" through TechHire, though the report did not show who the people were or where they lived.

Several employers who signed on as partners to the grant said they have not hired anyone from the TechHire program.

Celestar Holdings, for instance, joined the application because its founder is community-oriented, but the military contractor has not heard anything from CareerSource since 2016, said chief operating officer Lewis Jolly.

"We definitely have not pursued this as a means of attracting talent," Jolly wrote in a statement.

Tim Jones, president of the Cybrix Group, another defense contractor, has not hired any TechHire workers either.

"We didn't have any work in Tampa we needed them for," Jones said.

BayCare, however, said TechHire has helped its employees become eligible for higher-paying jobs in positions that are difficult to fill. The company would not say how many. The grant supports a nursing program at St. Petersburg College and a laboratory technologist program at Hillsborough Community College, according to a statement.

USF has received about $50,000 from CareerSource so far. The university has held two IT bootcamps, with 24 people receiving certificates and a third program is currently underway, officials said.

The school has campuses in St. Petersburg as well as Sarasota, but the training has happened only at its north Tampa location, said spokesman Adam Freeman.

"We are unaware of what, if anything, CareerSource may have done or planned in other counties," Freeman said.

Castor, the Tampa congresswoman who endorsed the effort, said she would be upset if any of the grant money is used to boost places other than north Tampa.

"It would be disappointing if resources intended to lift families and neighborhoods in the University area were used for any other purpose," she said in a statement.

Officials with the Florida Department of Economic Opportunity recently interviewed Starkey and Salatino, the president and CEO of CareerSource Pasco Hernando, about the grant. The officials asked Starkey and Salatino whether they knew that the application listed Pasco.

The DEO has declined to provide details beyond acknowledging the investigation.

"The agency expects members of the leadership teams at the local workforce development board to serve their communities with integrity, transparency and accountability," spokeswoman Tiffany Vause wrote in a statement.

CareerSource had previous dispute over grant

Before the TechHire controversy, local CareerSource president and CEO Edward Peachey clashed with a partner about a different grant program.

In 2014, St. Petersburg College booted CareerSource Pinellas from two grant agreements after the college said the jobs center refused to provide proof that its employee did the required work.

SPC had won more than $15 million to expand job training programs for advanced manufacturing. CareerSource Pinellas could get $250,000 for referring potential participants and advertising the program in its job centers.

In January 2014, an SPC accountant asked CareerSource for records that showed the hours that a jobs center employee had worked on the program.

A series of emails ensued between SPC and CareerSource officials, including Peachey. A CareerSource director contended in an email to SPC officials that the agency had submitted the required records and would not send anything else. Peachey then told two SPC employees that CareerSource would not participate in the program.

"I am sorry to inform you that we will no longer be able to provide staff," Peachey wrote in an email on Jan. 24, 2014. "This will also have an impact on our other grant partnerships. I am disgusted at the waste of time on a matter that was previously agreed to."

But internal SPC emails indicated that the CareerSource employee wasn't working on the grant full time, as the college thought was required. College officials also believed Peachey had told the employee not to provide certain reports to them.

"There is reason to believe (the employee) is not working 100% on the grant even though she is paid 100% from the grant," an SPC accountant wrote in an email at the time.

SPC president Bill Law later told Peachey in a two-page letter that he was frustrated with how CareerSource wouldn't provide the routine documentation.

Law said he agreed with his staff's decision to not pay the money and explained that CareerSource records were "insufficient" to show that the agency's employee worked the required hours.

"Is there a strong justification for why this information cannot be easily provided?" Law asked Peachey.

Peachey, according to other emails, didn't respond to Law's letter.

Weeks later, SPC dropped CareerSource from the program.

Contact Mark Puente at mpuente@tampabay.com or (727) 892-2996. Contact Zachary T. Sampson at zsampson@tampabay.com.