The FBI and the U.S. Attorney's Office have taken over multiple investigations into whether two Tampa Bay jobs centers overstated their success at using tax dollars to help people find work.
Federal auditors also served notice to Gov. Rick Scott's Department of Economic Opportunity that they are further examining whether the agency has adequate safeguards in place to protect millions in federal tax dollars it doles out to Florida's job placement centers.
The shift to a criminal investigation locally comes months after the Tampa Bay Times published a series of reports questioning whether CareerSource Pinellas and CareerSource Tampa Bay in Hillsborough County took credit for finding jobs for people who never sought their help. The series also highlighted a bonus program that was in place at both centers that rewarded employees with money for reporting high job placement numbers.
Lawyer Charles Harris, who represents both agencies, told the board chairmen late Wednesday that the FBI had asked him to accept a subpoena. He warned CareerSource office workers not to destroy any records. His memo to board members said the federal agents are focused on "prior placement practices."
"We are happy that something is finally being done," said CareerSource Pinellas board chairman Jack Geller. "We have absolutely nothing to hide. We will give them anything they want."
Hillsborough County commissioner Sandy Murman, who serves on the CareerSource Tampa Bay board, said: "It's serious, and we're going to take it seriously. … I just wish I knew more."
The FBI investigation renews attention on the Tampa Bay job placement centers. Following the Times' reporting, the boards ousted their joint president and CEO, Edward Peachey, and reorganized both operations.
For months, county commissioners and business leaders on the Tampa Bay CareerSource boards have pushed back on the Times' reporting. One of their primary defenses was that if there were major problems with the agencies' job placement reporting practices, the state would have caught the issues.
The federal audit by the U.S. Department of Labor's Office of Inspector General appears to be pointed at that very question. The audit will "focus on determining whether the State of Florida has adequate controls and systems in place" for the jobs money it disburses from a sprawling federal funding program.
On Thursday, a top employee at the state Department of Economic Opportunity alerted a CareerSource Pinellas leader by email that federal officials have requested records and will start the audit Oct. 15.
The auditors requested state policies for job reporting oversight, monitoring reports, organizational charts for each agency and guidelines that officials used to determine whether job seekers were qualified for the federal programs.
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Besides interviewing employers, CareerSource staffers and participants, federal auditors will review operations, financial records and files for people placed in jobs between 2014 and 2017, according to an email the agencies received Friday.
"The Florida Department of Economic Opportunity continues to cooperate with our federal partners as our own investigation is still open," wrote state agency spokeswoman Tiffany Vause in a statement Friday. "The moment we suspected any wrongdoing we immediately launched an investigation that began nearly a year ago."
Vause wrote that the Department of Economic Opportunity welcomes the federal investigation into CareerSource Pinellas and CareerSource Tampa Bay.
"Hiring decisions for the local workforce boards are made by local CareerSource board of directors and overseen by county officials," she added. "The state of Florida does not approve these decisions."
Gov. Scott rebranded Florida's 24 "workforce" agencies as CareerSource centers in 2013 after spending scandals rocked centers in Orlando and Tampa. Scott, whose top priority during his eight years in office has been creating jobs, routinely cites the hiring figures when discussing his leadership.
Several of Florida's CareerSource centers, including the two under scrutiny in Tampa Bay, are nonprofits funded largely by tax dollars. Their mission is to train job seekers and connect them to employers.
During Peachey's nearly eight-year tenure running CareerSource Tampa Bay and CareerSource Pinellas, the agencies were hailed as jewels of Florida's system — repeatedly placing tops in state rankings for putting people to work.
In January, the Times reported that the local placement centers asked employers across the bay area who had agreed to accept their referrals to provide information on all of their new hires, including ones that did not go to CareerSource for help. To record the hirings, the agencies requested names, Social Security numbers, birth dates, job titles, salary and start dates.
Peachey told reporters none of his employees personally benefited from logging more placements.
But that wasn't accurate.
He used job placement figures as a basis to request a raise for himself, and since 2014 the local centers paid out $1.2 million in annual bonuses, with $40,000 going to Peachey, and an additional $1.9 million in incentives to employees who helped boost the numbers, according to detailed payroll records examined by the Times.
Peachey approved the incentive program each year and set performance goals along with his business services director –– most recently Haley Loeun, who was fired in February amid allegations that she and Peachey were romantically involved.
Both denied the claims of current and former staffers that they were in an inappropriate relationship. When reporters knocked on Peachey's front door in July to request comment about an audit report that detailed how he and Loeun provided bonuses for employees, Loeun answered and declined to talk.
Peachey did not return a call seeking comment Friday morning.
Turmoil has engulfed the agencies since the Times began publishing its findings.
After Peachey, Loeun and several of her relatives were fired, Pinellas and Hillsborough commissioners removed numerous members from each board.
Each agency had for years shared staff and services in accounting, finance and human resources. Some employees worked in both counties to help people find jobs. Under the structure, CareerSource Pinellas was the employer of record for both centers. The agencies split Sept. 1.
Murman, the Hillsborough commissioner, said her hope is that the FBI probe relates just to Peachey's administration.
"But as far as our organization, we're completely separate, and Pinellas ran the show," she added.
Pinellas commissioner Pat Gerard, who joined the CareerSource Pinellas board this year, told her fellow commissioners last week that she didn't know the status of the multiple investigations.
On Friday, she said she was surprised that it "took nine months" for the investigations to reach this point.
"It will be interesting to see what they come up with," she said.
Contact Mark Puente at email@example.com or (727) 892-2996. Contact Zachary T. Sampson at firstname.lastname@example.org or (727) 893-8804.