Iowa Nonprofit is Latest Earmark Outrage | Citizens Against Government Waste

Iowa Nonprofit is Latest Earmark Outrage

The WasteWatcher

The Central Iowa Employment and Training Consortium (CIETC) is a nonprofit organization that provides job-training services for the Iowa Workforce Development (IWD) program.  As extensively reported by The Des Moines Register, the group’s top three executives were recently fired after a state audit found that they collected a combined $1.8 million in salaries over 30 months.  Congressional earmarks and breakdown of oversight allowed a cadre of greedy schemers to enrich themselves at taxpayer expense. 

CIETC is headed by a board of public officials and gets its $5 million annual budget from a mix of local, state, and federal grants.  The group received $2 million from three earmarks in the Department of Labor’s budget from fiscal 2003 to 2005.  The earmarks were inserted by Sen. Tom Harkin (Iowa), ranking Democrat on the Labor, Health and Human Services, Education, and Related Agencies Appropriations Subcommittee. 

Ramona Cunningham is at the heart of the scandal involving conflicts of interest, nepotism, and favoritism.  As CIETC’s chief executive officer, the thrice-divorced high school dropout reaped $800,000 over a 30 month period and even took three months of vacation per year.  Cunningham was defiant during recent testimony before the state legislature, saying “I feel I earned the salary, yes, sir.”  Cunningham’s predecessor, Marlon Williams, was also fired amid allegations of misuse of federal money in 1986.  After his firing, Williams filed a complaint with the Department of Labor accusing Cunningham of claiming false travel expenses.  She continued to head the nonprofit even after state auditors confirmed some of the allegations. 

Cunningham prohibited CIETC staffers from communicating with its board members.  In 2004, a whistleblower sent an anonymous letter to handful of public officials warning of high salaries and conflicts of interests.  CIETC and IWD uncovered the whistleblower’s identity and fired her two months later.  The State Auditor did not pursue the allegations until a second whistleblower contacted him in 2004.    

Des Moines City Councilman Archie Brooks, who resigned as chairman of the CIETC board, at first denied then confirmed that he dated Cunningham in the early 1990s. CIETC employs Cunningham’s daughter, Brooks’ brother and stepdaughter, and a nephew of CIETC board member John Mauro.  Since the release of the audit, seven of CIETC’s 15 board members have resigned and Gov. Vilsack removed two officials at the IWD.  A secretary at IWD was caught trying to dispose documents in a Dumpster shortly after the scandal broke.  Investigations have been launched at the U.S. attorney’s office, the FBI, the Department of Labor’s Office of Inspector General, the Iowa Division of Criminal Investigation, and the Polk County attorney’s office. 

One member described the board meetings with Cunningham as such:  “We pretty much OK’d everything they asked for, and that was it…We were just glad to get out of there (after the board meetings), I guess.”  The board’s complete aloofness was outrageous, but not shocking, given the conflicts of interest.  In addition to the “fringe benefits” between Brooks and Cunningham, Cunningham co-owns a boat with another former board member, Dan Albritton.  Albritton was also a paid CIETC consultant.  The insurance firm owned by John Mauro and his sons provides health care coverage for CIETC employees.  In other words, board members and their relatives stood to gain financially from the operation and so had little incentive to discourage the shenanigans taking place.   

“Nonprofits” that subsist on government funds are more likely to become outposts for cronyism.  Traditional nonprofits raise money by soliciting voluntary donations.  The competition between nonprofits for donor dollars encourages transparency and performance.  CIETC is a nonprofit that raises money by lobbying government officials.  Because the government’s money is taken by force from taxpayers, CIETC need only win over a few legislators to stay in business.  No matter how many layers of “oversight” may exist, the bottom line is that government is far less accountable for taxpayers’ money than individuals are for their own money. 

In an absurd case of passing the buck, Sen. Harkin blames the Department of Labor for the boondoggle resulting from his own earmarks.  Calling the episode a “gross abuse of public funds,” he is “dismayed” the department did not notify him sooner about the federal investigation into the salaries.  He has even proposed legislation limiting salaries for nonprofits associated with the program. 

The Department of Labor certainly deserves criticism for reviewing copies of CIETC executives’ employment contracts and calling them “excellent.”  However, ultimate responsibility for the boondoggle falls on Sen. Harkin’s shoulders.  All three of CIETC’s federal earmarks appeared in CAGW’s Congressional Pig Book, an annual database of pork projects that bypass the normal procedures for budget review.  The earmarks were slipped into the conference report of a spending bill, meaning they were not subject to separate vote in the House or Senate.  The projects were neither competitively awarded nor the subject of a congressional hearing. 

Although claiming to not remember the settings of his meetings with Cunningham, CIETC’s web site shows Harkin and Cunningham together in about seven photos at the dedication of the “Sen. Harkin Learning Center.”  Harkin recalls that Cunningham “pleaded with me” for more federal money, adding, “How can people live with themselves who do something like this?”    

Sen. Harkin’s feigned shock speaks volumes about the true nature of the earmarking process.  Appropriators often justify their pork on the grounds that “I know better than some bureaucrat or authorizing committee about the needs of my district.”  Yet in this case, Harkin appears oblivious to the salaries of CIETC executives, Cunningham’s record of fraud, and her lack of a high school education.  A simple background check or a glance at the organization’s books might have raised a red flag.  

Sen. Harkin condones the earmarking free-for-all in Congress and acts shocked when the result is waste and abuse.  The situation was accurately summed up by Linn Hayden of Ankeny, Iowa in a letter to the The Des Moines Register: “So are we to understand if we have a cause and want $1.4 million, and we are willing to name it after Sen. Harkin, we just need to contact him (doesn’t matter where or how, as he won’t remember) and he will go to Congress and get the money for us?  No checks, no balances. Wow.”  

The scandal may result in positive reforms, such as salary limits and additional disclosure requirements for groups like CIETC.  However, the boondoggle is another argument for earmark reform.  Members of the appropriations committees, like Sen. Harkin, should not be allowed to earmark the taxpayers’ money at will in circumvention of established budgetary procedures, then feign ignorance of the consequences.

-- Tom Finnigan

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