DEO warns local CareerSource offices to pull back on settlement payments for fired CEO

Edward Peachey, the fired former president and CEO of CareerSource Tampa Bay and CareerSource Pinellas, listens to board members discuss whether to pay him a settlement. [DOUGLAS R. CLIFFORD   |   Times ]
Edward Peachey, the fired former president and CEO of CareerSource Tampa Bay and CareerSource Pinellas, listens to board members discuss whether to pay him a settlement. [DOUGLAS R. CLIFFORD | Times ]
Published March 21, 2018

The Florida Department of Economic Opportunity is warning two Tampa Bay jobs centers not to use tax money to pay up to $234,000 to their fired CEO as a settlement to keep him from suing the agencies.

Edward Peachey, the former leader of CareerSource Tampa Bay and CareerSource Pinellas, was fired in Hillsborough County last week and in Pinellas County on Wednesday. The job centers are under state and federal investigations, which are seeking in part to determine whether the agencies have inflated the number of job placements they've reported to the state in recent years.

Boards of both agencies each agreed to pay Peachey the equivalent of five months of his total compensation package if he agrees not to sue the centers or their board members.

But the director of the DEO, in a two-page letter to the chairmen of both boards Wednesday, cautioned that such payments could end up looking like "a flagrant misuse of public funds."

"Floridians deserve to know their hard-earned tax dollars are not going toward a severance or settlement given the ongoing investigations," wrote Cissy Proctor, the executive director of the Florida DEO.

In response, both chairmen said each agency will comply with the law. The settlement agreements, they said, could go back to the boards for future discussions or votes.

"We have to determine what the law is," said Dick Peck, board chair at CareerSource Tampa Bay. "No taxpayer dollars will be used to pay Ed Peachey a separation or severance."

Jack Geller, board chair at CareerSource Pinellas, said he was "frustrated" that the DEO sent the letter after each board had already voted on settlements.

"They've known we have been dealing with for six weeks," Geller said.

Marion Hale, Peachey's attorney, did not respond to a request for comment.

Proctor wrote that the investigations center around "allegations of serious misconduct and potential criminal conduct." Along with the DEO, the U.S. Department of Labor and the Florida Department of Law Enforcement are also investigating the agencies, which receive millions of taxpayer dollars each year to put people to work. Peachey has led the Pinellas jobs center since 2003 and the Hillsborough center since 2010.

Local jobs centers entered thousands of fictitious phone numbers into state network

In the letters, Proctor noted that the local CareerSource boards have not provided a valid employment agreement for Peachey. She gave them three business days to come up with an agreement before DEO pursues "all available legal remedies to prevent state and federal funds from being used for Mr. Peachey's severance packages."

Even if the agencies produce an employment agreement, Proctor wrote, "DEO will disallow a severance or settlement package in light of these ongoing investigations."

Proctor also expressed concern that the boards were skirting a law that could limit Peachey's severance package by calling it a "settlement." The boards approved the settlements to be paid with private, unrestricted funds — not tax dollars.

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"This thinly veiled attempt to skirt federal law governing severance payments would be entirely inappropriate," she wrote.

The letter also raised questions about how the agencies have paid their attorney, Charles Harris of Trenam Law.

The DEO is "unaware of any publicly noticed, sunshine compliant meeting" where both boards voted on Harris's employment contract, the letter said.

"As the scope of representation and pay rate is not known, it is unclear whether Mr, Harris can be paid using state or federal funds," Proctor wrote.

Since January 2014, the sister agencies have paid Trenam Law at least $303,519. Of that, nearly $85,000 has been paid since Dec. 1, records show.

Harris has told the Tampa Bay Times that Trenam has represented the agencies for over 10 years and charges $250 an hour. On Wednesday, Harris pledged to provide an "engagement letter" in the coming days that would detail the arrangement.

The agencies, Peck said, use money collected from fees and other services, not tax dollars, to pay legal fees.