Editorial: Lessons from CareerSource travesty

Federal regulators find more than $17 million in questionable spending, fake reports and a lack of oversight. Elected officials should pay closer attention.
DOUGLAS R. CLIFFORD   |   Times   
Edward Peachey, the former president and CEO of CareerSource Tampa Bay and CEO of CareerSource Pinellas. (2018)
DOUGLAS R. CLIFFORD | Times Edward Peachey, the former president and CEO of CareerSource Tampa Bay and CEO of CareerSource Pinellas. (2018)
Published May 22
Updated May 22

A blistering report by federal regulators on the renegade CareerSource job agencies minces no words about the corrupt culture and the misspending of millions of tax dollars. It also makes clear that elected officials in both Hillsborough and Pinellas counties share responsibility for the lack of oversight and institutional controls that created an environment ripe for abuse. The federal criminal investigations should continue, and there is a broader lesson about the risks of farming out public money and responsibilities to obscure agencies or nonprofits without adequate supervision.

The U.S. Department of Labor’s monthslong investigation was triggered by a series of reports by the Tampa Bay Times’ Mark Puente and Zachary Sampson, and it confirmed the Times’ findings. Those findings included evidence of fraudulent job placements, falsified records and a toxic work environment designed to create the appearance of remarkable success. The federal report found more than $17.6 million in questionable costs that may have to be reimbursed. It’s a stunning number exceeded only by the extent of the rogue operations that were allowed to fester for years.

Of course, the federal report focuses on Edward Peachey, the former CEO of both CareerSource Tampa Bay in Hillsborough and CareerSource Pinellas. It details how Peachey, who was ousted following the Times’ reports, essentially handpicked candidates for the boards who were appointed by the county commissions. Then he controlled the boards by manipulating the administrative structures and “by exercising complete control of all communications, operations and outcomes.’’ Naturally, that absolute power with no internal controls and virtually no external oversight led to abuse.

Taxpayers and voters take note: Federal regulators do not let local elected officials and CareerSource board members off the hook. The report says their failure “to exercise proper fiduciary oversight created an environment vulnerable to mismanagement, waste, fraud and abuse to occur undetected.’’ It cites a lack of knowledge among elected officials and board members about their roles and responsibilities, and failures to properly recruit and vet CareerSource board members. So while Peachey exploited the situation, county commissioners and board members helped create the environment that allowed that to occur.

Most of the questionable spending that could be disallowed are cited in two findings by federal regulators that were first reported by the Times. More than $9.7 million was steered to area businesses for job training without documentation that the new workers needed the training or were even eligible, which led to padded numbers touting the success of CareerSource. The agencies distributed another $5.4 million in gas cards and prepaid debit cards like candy, mailing out most of them without even verifying if the recipients needed the help or were the right people in the first place.

Peachey is gone. CareerSource Tampa Bay and CareerSource Pinellas have been separated, and new leaders and new policies are in place. But the Department of Labor’s unvarnished findings are not and should not be the final word. The state’s Department of Economic Opportunity, which oversees two dozen CareerSource offices, has 45 days to respond. The FBI and the Labor Department should continue their criminal investigations. And county commissioners in both Pinellas and Hillsborough should have learned a lesson from this CareerSource debacle and ensure they provide appropriate oversight to such agencies so this never happens again.