ORGANIZED CRIME
MANAGEMENT IN GOVERNMENT
PART TWO
by
HARVESTING
CHILDREN FOR CONDITIONAL FEDERAL FUNDING:
BY THE NUMBERS
“Article 16.3. The family is
the natural and fundamental group unit of society and is entitled to protection
by society and the State.” Universal Declaration of
Human Rights, English Version, United Nations Department of Public
Information.
<http://www.unhchr.ch/udhr/lang/eng.htm>
“When I meet a man I ask
myself, 'Is this the man I want my children to
spend their weekends with?'“ Rita Rudner, Comedienne, from Michael Moncur's (Cynical)
Quotations.
<http://www.quotationspage.com/>
Laying a cornerstone
Structural corruption occurs when
employees of a government agency or program are required, as a condition of continued
employment, to falsify reports, commit perjury, or engage in other illegal
activity to obtain agency funding or meet agency or program goals. Structural corruption is similar to what
accountants refer to as “implied corruption” or “implied fraud.”
Sitting down at the table
The tables included in this article
are for the benefit of those needing documentation to convince others of the
level of fraud and corruption political extremists and allied criminals have
brought into government agencies and programs.
Some readers have probably suspected children were being exploited by
government employees in child “protection” agencies, but have been unable to
convince your naive friends. When you
inform those naive friends of these articles and they dismiss you with “Ah,
he’s just some kind of anti-government militia nut job,” you can print copies,
sit them down at the table and show them.
Now, here it is. You’ve
got tables.
1.
LAYING THE FOUNDATION FOR CHILD PROTECTION FRAUD: MANDATED STATE TITLE IV-E
FEDERAL FUND CLAIM REPORTS
“And every one who hears
these words of mine, and does not act upon them, will be like a foolish man,
who built his house upon the sand.” Jesus
Christ, Matthew 7:26 NAS Bible
State agencies are required, as a
condition of federal funding, to file quarterly Federal Title IV-E Expenditure
Reports (Federal Form IV-E-12, OMB No. 0980-01310, “The OMB number may have
changed as of October 1999,” George Babbitt, Arkansas Department of Human
Services). Among the information State
child protection service agencies must report are projections of the average
number of children that will be held in State protective custody and State
custody for adoption during the reporting period.
Children held in State protective
custody have been removed from parental custody. Children held in State custody for adoption have been removed
from parental custody and parental rights terminated.
Living the bottom line
Table 1 was constructed from 1997-8
fiscal year quarterly Title IV-E Expenditure Reports filed by the Arkansas
Department of Human Services Division of Children and Family Services.
The bottom line is that by reporting
holding an average 2208 children in state custody for protection or adoption,
Arkansas brought into its 1997-8 fiscal year economy $30,263,587 in federal
funds.
Let us suppress, for the moment, the
thought this money was, in whole or in part, federal taxes removed from
Arkansas and laundered through Washington, D.C to be returned with strings
attached. The strings in this case
requiring someone’s child be taken into “protective” custody or terminating
parental rights and putting their child’s picture on the internet to inform
everyone the child is up for adoption.
Someone might get angry if we thought about that.
The last column of Table 1 reports
the average number of federal dollars generated by each child held in
protective custody ($17,178.43) and held for adoption ($5,850.45). Note, the State of Arkansas obtained more federal
dollars from a child held in non-voluntary foster care than adoption
assistance.
Table
1
1997-8
FISCAL YEAR TITLE IV-E FEDERAL PARTICIPATION
|
CATEGORY |
1ST
QUARTER (ADJUSTED) |
2ND
QUARTER (ADJUSTED) |
3RD
QUARTER (ADJUSTED) |
4TH
QUARTER (UNADJUSTED) |
1998
TOTAL |
AVERAGE
FEDERAL SHARE DOLLARS PER CHILD IN STATE CUSTODY |
|
NON-VOLUNTARY
FOSTER CARE Maintenance
Assistance NET
TOTAL PAYMENTS (A5) |
$1,388,894 |
$2,387,030 |
$2,465,322 |
$2,739,211 |
$ 8,980,457 |
|
|
State
and Local ADMINISTRATION TOTAL
ADMINISTRATION (A7) |
$1,940,848 |
$2,873,454 |
$2,773,152 |
$3,286,686 |
$10,874,140 |
|
|
State
and Local TRAINING (A6) |
$ 947,488 |
$1,632,223 |
$1,628,024 |
$2,272,199 |
$ 6,479,934 |
|
|
ADOPTION
ASSISTANCE Maintenance
Assistance PAYMENTS NET
TOTAL PAYMENTS (5A) |
$ 435,302 |
$1,019,640 |
$ 870,052 |
$ 725,941 |
$ 3,050,935 |
|
|
State
and Local ADMINISTRATION (7A) |
$ 223,717 |
$ 216,831 |
$ 223,951 |
$ 231,717 |
$ 896,216 |
|
|
State
and Local TRAINING (6A) |
0 |
$ 612 |
$ 587 |
$ 706 |
$ 1,905 |
|
|
NON-VOLUNTARY
FOSTER CARE TOTAL |
$4,277,230 |
$6,892,707 |
$6,866,498 |
$8,298,096 |
$26,334,531 |
$ 17,178.43 |
|
ADOPTION
ASSISTANCE TOTAL |
$ 659,019 |
$1,237,083 |
$1,094,590 |
$ 958,364 |
$ 3,949,056 |
$ 5,850.45 |
|
TOTAL
FEDERAL SHARE (ALL
PROGRAMS) |
$4,936,249 |
$8,129,790 |
$7,961,088 |
$9,256,460 |
$30,283,587 |
$ 13,715.39 |
|
Average
Monthly Number of Non-Voluntary
Foster Care Children |
1356 |
1527 |
1624 |
1624 |
Ave. 1533 |
|
|
Average
Monthly Number of Adoption
Assistance Children |
661 |
661 |
688 |
686 |
Ave. 675 |
|
Table 2 reports the projected
quarterly Arkansas Title IV-E expenditures and average number of children in
State custody through fiscal year 2000.
Note the projections always increase.
That is an important pattern.
Table
2
PROJECTED
(1997) QUARTERLY FEDERAL SHARE OF TITLE IV-E EXPENDITURES AND AVERAGE MONTHLY
NUMBER OF CHILDREN IN ARKANSAS STATE CUSTODY
|
CATEGORY |
1998 FY |
1999 FY |
2000FY |
|
NON-VOLUNTARY FOSTER CARE Maintenance Assistance TOTAL |
$2,742,179 |
$2,879,288 |
$3,023,253 |
|
ADOPTION ASSISTANCE Maintenance Assistance PAYMENTS NET TOTAL PAYMENTS (5A) |
$ 864,308 |
$ 907,523 |
$ 952,899 |
|
Average Monthly Number of Non-Voluntary Foster Care Children |
1365 |
1400 |
1441 |
|
Average Monthly Number of Adoption Assistance Children |
650 |
660 |
671 |
Picking up an important
loose end
Responsibility for completing and
filing Federal Title IV-E Expenditure Reports is usually assigned to a specific
individual in the State child protection agency financial management
section. Completing and filing this
report is only part of the individual’s work load.
The
individual who must project the average number of children held in State
protective custody and held in State custody for adoption is given no data on
which to base their projections. There
is no mathematical formula used to calculate these projections. Projections are arbitrarily increased each
reporting period. There is no mechanism
for basing these projections on the actual number of abused children in the
general population. There is no
mechanism by which these projections can ever decrease if the number of abused
children decreases. The State
projections of the number of children held in State protective custody and held
in State custody for adoption have no foundation in reality, yet they are part
of the basis for filing federal fund claims.
Finding the Federal Title
IV-E funding facts in your State
You think this is too fantastic to
be true? File an FOIA request with your
State child protection agency requesting the following information:
1. The quarterly Federal Title IV-E Expenditure
Reports (Federal Form IV-E-12, OMB No. 0980-01310) for the past five years.
2. The mathematical formula used to calculate the
projected number of children that will be held in State protective custody and
the number held in State custody for adoption reported on the federal form.
3. A copy of all reports, data or other information
used to calculate the projected number of children that will be held in State
protective custody and the number held in State custody for adoption.
2.
COMMISSIONS GENERATED PROCESSING CHILDREN FOR FEDERAL FUND CLAIMS
“Republicans understand the
importance of bondage between a mother and
child.” Vice President Dan Quayle, from Michael Moncur's (Cynical)
Quotations.
<http://www.quotationspage.com/>
As the number of conditional federal funding programs
increased, the expertise and support needed to file claims also increased. Claim filing initially accomplished by one
State employee was contracted out to for-profit corporations1, some
publicly held, which specialized in maximizing federal fund claims. It is possible for parents to receive a
stock dividend from profits generated by a corporation filing federal fund
claims for their own children taken into state custody. Irony is still alive and well in America.
The Arkansas Department of Human Services entered into a
series of contracts for the specific purpose of maximizing federal fund
claims. Under the first contract
(contract number 0015651) with MAXIMUS, Inc. (now DMG-Maximus), MAXIMUS, Inc.
was paid 9% commission for the increase in federal fund claims resulting from
their efforts. Under “Objectives and
Scope” the contract states:
"The
contractor will develop strategies to enable the department to maximize
utilization of federal funding under the initiatives specified in Attachment I
to this agreement."
Performance indicators establish the conditional federal
funding income at the time the contract was signed as a baseline. One performance indicator is the founded
child abuse rate. MAXIMUS, Inc. is only
paid 9% commission on the increase in
federal fund claims generated and paid above the baseline existing at the time
the contract was signed. Such contracts
are renewed annually, with a baseline established for the new contract at the
level of federal funding claims generated under the previous contract. Under the second contract with MAXIMUS,
Inc., the commission rate was set at 9.5%.
This pattern of contractual relationships for processing federal funding
claims also establishes a pattern that the number of children taken into State
custody will always increase and never decrease. This is an important
pattern.
There are two ways for child protection agencies to
continually increase conditional federal funding claims. The child protection agency must continually
increase the number of children taken into State custody or the amount of
conditional federal funding claims generated from each child held in State
custody must continually increase.
Corporations specializing in “Medicare and Medicaid reimbursement and
revenue enhancement” find ways to do both.
Attachment I to the first MAXIMUS Inc. contract is 53
pages in length and contains several statements of performance indicators. For example, Section V.3.6.1 states:
"The
contractor will meet the minimum targeted return of combined enhanced revenues
projected for all initiatives set forth in this agreement."
Failure to meet the targeted return will result in
imposition of one of the following remedies:
"1.
Should the Contractor not meet "acceptable performance" standards, it
will result in the withholding of quarterly payment to the contractor until
such standards are met.
2. Failure to
meet "acceptable performance" standards by the next quarter following
the quarter in which standards will be considered noncompliance with the terms
of the contract and may -- at the option of DHS -- result in:
-Continuing
withholding of payments until such standards are met; or
-Termination
of the contract and forfeiture of payments will be made in accordance with
Attachment I, Section 5.8."
If any revenue generating
condition falls below the level existing at the time the contract was signed,
including the founded child abuse rate, the contractor faces withholding of the
quarterly payment, cancellation of the contract, or both.
Noticeably absent is any research or contracts for
research to determine if children taken into State custody benefit in any
way. In fact, there is almost a total
lack of such research in the relevant professional literature. Only two studies could be located comparing
mortality rates between children in and out of state custody. Thompson and Newman (1995)2
reported that violent deaths and deaths due to disease among children in the
Canadian welfare system occurred at rates significantly higher than the general
population, both over and under the age of 18.
In the only United States study, Siefert, Schwartz, and Ortega (1994)3
reported that infant mortality in Michigan's child welfare system was
substantially higher than the general population.
A skeptic might be tempted to conclude
those managing the government child protections system have no other concern
for children in State custody than how many federal dollars they can be used to
generate for the respective State economies.
Perhaps we can find a different picture when we look at child protection
agency caseworkers - perhaps not.
Finding the facts about
commission structures in child protection agency contracts in your State
Contracts entered into by State
agencies are public records subject to FOIA requests. An additional powerful tool is available in some States. Some State Supreme Courts have ruled that
corporate records associated with state contracts are also subject to FOIA
requests. Check to see if your State
makes relevant records of State contract holders subject to FOIA requests.
Two
valuable resources for assistance with FOIA requests are the Freedom of
Information Center at the University of
Missouri <http://web.missouri.edu/~foiwww/> and the Mississippi Center
for Freedom of Information site <http://www.mcfoi.org/DEFAULT.HTM>
contains several possibly useful links.
A third site, CPS Watch <http://www.cpswatch.com/forms/>, has
model forms and other useful information specifically relating to child
protection agencies.
Submit FOIA requests to review and
make selected copies of the following:
1. All contracts issued by the State child
protection services agency (and I would recommend asking for all contracts for
the entire Department of Human Services, although it will take time to review
all the contracts).
2. Look for the performance indicators established
to determine fulfillment of the contract.
3. Determine how the contractor is compensated, a
flat fee or percent of the revenue generated from their efforts.
4. If the contractor provides training, request to
review and copy training manuals and any other related material produced.
5. If the contract requires periodic reports or
other documents, request to review and copy selected documents.
6. Document the contractual consequences of failure
to meet performance standards.
7. Look for anything that functions to coordinate
the activities of components of the child protection system. Although
these contracts are legal, they are a critical component of the crime
management structure. As with any
sophisticated criminal enterprise, compartmentalization of legal and illegal
function is useful.
3.
SEIZURE QUOTAS FOR CHILD PROTECTION SERVICE CASE WORKERS
“I have the heart of a
child. I keep it in a jar on my shelf.” Robert Bloch, from Michael Moncur's (Cynical) Quotations. <http://www.quotationspage.com/>
Table 3 contains a breakdown of
State and federal salary fund components by Division of the Arkansas Department of Human Services for the 1995-6
fiscal year. The Division of Children
and Family Services received 58% of its payroll funds from conditional federal
funds. This means that employees of the
Division of Children and Family Services must, by their own decisions and
activities, generate sufficient federal funds to cover 58% of their paychecks
Table
3
SOURCE
OF 1995-6 DEPARTMENT OF HUMAN SERVICES SALARY FUNDS BY DIVISION FROM FISCAL
YEAR FINANCIAL REPORT
|
DIVISION
OF DHS |
TOTAL REGULAR
SALARIES |
STATE
FUNDS |
FEDERAL
FUNDS |
|
DEVELOPMENTAL
DISABILITY SERVICES |
$47,531,440.69 |
$12,505,944.79
(26%) |
$33,879,958.20
(71%) |
|
CHILDREN
AND FAMILY SERVICES |
$21,665,259.33 |
$
9,031,484.81 (42%) |
$12,523,886.49 (58%) |
|
MENTAL
HEALTH |
$29,035,130.00 |
$16,751,076.79
(58%) |
$
9,807,340.08 (34%) |
|
ECONOMIC
AND MEDICAL SERVICES |
$
8,761,612.65 |
$
1,251,072.25 (14%) |
$
6,169,232.62 (70%) |
|
ADMINISTRATIVE
SERVICES |
$
9,800,184.52 |
$
3,861,468.82 (39%) |
$
5,696,178.48 (58%) |
|
AGING
AND ADULT SERVICES |
$
2,464,728.57 |
$
1,138,647.15 (46%) |
$
1,247,957.88 (51%) |
|
SERVICES
FOR THE BLIND |
$
2,060,357.70 |
$ 837,260.03 (41%) |
$
1,222,858.80 (59%) |
|
VOLUNTEERISM |
$ 550,197.52 |
$ 146,974.09 (27%) |
$ 401,186.91 (73%) |
|
YOUTH
SERVICES |
$
7,508,248.88 |
$
7,194,242.85 (96%) |
$ 313,947.14 (04%) |
Using an average $2230.43 in federal
salary fund revenues generated for each child held in Arkansas Division of
Children and Family Services custody, Table 4 lists the quota of children
required to generate 58% of the salary funds for each staff position in the
Division. The “AUTHORIZED NUMBER”
column lists the number of staff authorized for each position. The “PAY GRADE” column lists the official
pay code classification for each position.
Because the Division of Children and Family Services was unable to
produce the true salary for each employee, the starting salary for each pay
grade was used as an approximation for each employee in that position. This approximation is in the “GRADE STARTING
SALARY” column.
Using this salary approximation
method results in an underestimation of the quota of children required to
balance the payroll fund.
The “FEDERAL FUNDS REQUIRED” column
lists 58% of the starting salary for each pay grade. The “TOTAL FEDERAL DOLLARS REQUIRED TO MEET STAFF PAYROLL”
column lists the product of the “FEDERAL FUNDS REQUIRED” (58% of each position
starting salary) and the authorized number of staff for each position. The result of this calculation divided by
$2230.43 is listed under the “QUOTA OF CHILDREN TO MAKE CLAIMS” column. The result is a projected 5,529.33 total
number of children required to generate 58% of the Division of Children and
Family Services payroll from federal salary funds. The actual number of founded child abuse allegations reported for
the fiscal year was 5615. The
underestimation was 86.
Table
4
1995-6
ARKANSAS DIVISION OF CHILDREN AND FAMILY SERVICES QUOTA OF FOUNDED CHILD ABUSE
ALLEGATIONS REQUIRED TO OBTAIN BUDGETED FEDERAL SALARY FUNDS
|
POSITION
TITLE |
AUTHORIZED NUMBER |
PAY GRADE |
GRADE
STARTING SALARY |
FEDERAL
FUNDS REQUIRED (58%) |
TOTAL
FEDERAL DOLLARS REQUIRED TO MEET STAFF PAYROLL |
QUOTA
OF CHILDREN TO MAKE CLAIMS |
|
DEPUTY
DIRECTOR DCFS |
1 |
UNC |
$72,460 |
$42,026.80 |
$ 42,026.80 |
18.84 |
|
DHS
ASSIST DIR |
3 |
UNC |
$58,939 |
$34,184.62 |
$ 102,553.86 |
45.98 |
|
DCFS
ADMR ADMIN SVCS |
1 |
UNC |
$44,934 |
$26,061.72 |
$ 26,061.72 |
11.68 |
|
DCFS
ADMR PROG OPS |
1 |
25 |
$30,470 |
$17,672.60 |
$ 17,672.60 |
7.92 |
|
DCFS
ADMR COMMUN SVCS |
1 |
25 |
$30,470 |
$17,672.60 |
$ 17,672.60 |
7.92 |
|
PSYCHOLOGIST |
1 |
25 |
$30,470 |
$17,672.60 |
$ 17,672.60 |
7.92 |
|
DCFS
ADMR PROG SUPPORT |
1 |
25 |
$30,470 |
$17,672.60 |
$ 17,672.60 |
7.92 |
|
DCFS
ADMR INDIV & FAM SVCS |
1 |
24 |
$28,626 |
$16,603.08 |
$ 16,603.08 |
7.44 |
|
DHS
PROGRAM ADMR |
2 |
23 |
$26,862 |
$15,579.96 |
$ 31,159.92 |
13.97 |
|
DCFS
AREA MANAGER |
6 |
23 |
$26,862 |
$15,579.96 |
$ 93,479.76 |