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Battling Over Jail Contracts

Copyright © 2010 Albuquerque Journal
By 2010 Jeff Proctor
Journal Staff Writer
          Carlos Villanueva was brought from the Bernalillo County Public Works Department to the Metropolitan Detention Center in 2009 and was assigned to review big-ticket contracts for medical, food and laundry services at the massive lockup.
        His findings, which the county disputes: millions of dollars of overcharges in the form of discrepancies between amounts on invoices and how much the county paid.
        "I know where the money went," he said in an interview with the Journal. "I just don't know why."
        Villanueva said he reported his findings to top county officials in a series of meetings in October 2009, and says all three — County Manager Thaddeus Lucero, Deputy County Manager for Public Safety John Dantis and MDC director Ron Torres — promised to look into it.
        The county later hired outside firms to audit the two contracts Villanueva had reviewed. The chairwoman of the county's Internal Audit Committee confirmed that one of the audits had found discrepancies; the other is not yet completed.
        Villanueva said auditors met with him Friday to discuss his findings on the medical services contract.
        If Villanueva was hoping for a commendation from the county for his report, he didn't get it.
        Less than two weeks after his meetings with county brass, he was demoted to the mailroom — where he kept his $52,000 salary despite having what he says were "no discernible duties" — and his access was pulled from most county computer systems.
        He was told he would report directly to Torres, who sent him the e-mail advising him of his reassignment.
        On April 16, Villanueva says, he was fired.
        County spokeswoman Liz Hamm on Wednesday promised the Journal an interview with county officials, including Torres and Lucero. But it was never scheduled, and Hamm didn't return telephone calls Friday.
        Instead, the county issued a news release at 2:20 p.m. Friday in which Torres denounced Villanueva as a "disgruntled former county employee" whose "attempted extortion and threats will not be condoned by the County."
        "Mr. Villanueva's allegations are without merit," the release says.
        The statement acknowledged that Villanueva had been "assigned the task of reviewing the contracts for Canteen Corporation (and) CMS."
        CMS is Correctional Medical Services. Canteen provides both food and laundry services.
        The county statement does not address Villanueva's reassignment to the mailroom. It isn't clear whether the alleged transgressions that led to his firing were related to his contract review duties as an "administrative officer III" or after he was sent to the mailroom.
        Meanwhile, CMS has since lost the MDC contract. The County Commission voted April 11 to award the jail medical contract worth about $11.5 million a year to Correctional Healthcare Management.
        Among the claims pointed out in Villanueva's reviews:
        • A discrepancy showed the county paid CMS $2,906,544 more than was listed on the invoices from Sept. 23, 2008, to Aug. 19, 2009.
        • A $94,793 difference in the monthly charges CMS should have been paid under the contract and was actually being paid starting in August 2009.
        • County taxpayers were being charged 6.88 percent tax on consumables for inmates at the jail instead of the state-mandated rate of 6.875 percent. "No one is allowed to change the tax rate by rounding up," Villanueva wrote in his review. Moreover, he claimed the jail was charging inmates a further tax on consumables, contrary to state law. The overcharge paid to Canteen was about $1.3 million.
        E-mails between Villanueva and another county executive show he balked at approving invoices he thought were "overstated."
        After reviewing copies of Villanueva's work product, a spokesman for CMS issued a statement saying Villanueva's review "was apparently done without certain information and documents," including credits CMS had issued to the county and an increase in the contract amount that went into effect at the start of the last fiscal year.
        "As a result, (Villanueva's review) leaps to inaccurate conclusions," the statement says.
        A representative from Canteen did not return telephone calls seeking comment.
        More audits
        Demesia Padilla, chairwoman of the county's Internal Audit Committee, said in an interview that the county has hired two outside firms to conduct audits of the CMS and Canteen contracts.
        Neither of the contracts was in the committee's normal scope of work, she said. Both audits were ordered by special requests, which come from either Lucero or Deputy County Manager Dan Mayfield.
        Padilla said she was aware of Villanueva's contract reviews but did not know who ordered the additional CMS and Canteen audits.
        "I know he did some work, but I didn't evaluate it," she said. "The committee doesn't make decisions about that, so I can't speak to the quantity, quality or findings of the work. But the internal auditors should have looked at that. His work product more than likely would have gotten turned over to the two firms."
        The Patch and Associates firm's audit of the Canteen contract has been completed, Padilla said.
        The Journal asked the county for a copy of the audit but was not provided one.
        Padilla said she couldn't recall specific details of the Patch and Associates audit, but did say it identified some "invoicing problems."
        The county's news release says the Canteen audit was conducted by a different firm, and it "did not find that Canteen was overpaid by the County."
        Padilla said the CMS audit, which has not been finalized, is being conducted by REDW LLC. That audit was discussed at the most recent committee meeting.
        "There were a few issues that had not yet been resolved," Padilla said. "Management had not had the opportunity to respond to all the questions raised in the audit."
        She said she could not discuss details of questions the audit raised because it is not yet finished.
        In its news release, the county does not address an internal audit of the CMS contract. Nor does it say Villanueva ever discussed his findings on that contract with county officials.
        Villanueva said he met with REDW auditors Friday and showed them the work he had done reviewing the CMS contract.
        "Their eyes got as big as hubcaps when I showed them what I had," he said. "They told me they weren't able to close the books on their audit because the county couldn't answer numerous questions. The county hadn't even furnished them with the most recent, amended CMS contract. They said they couldn't even get the first invoice they looked at to match."
        Villanueva said the auditors took copies of all of his documentation when they left the meeting.
        Troubled history
        CMS has a lengthy history with New Mexico prisons and jails.
        In addition to its work at MDC, CMS has provided a "customized healthcare program and on-site medical unit for each of the (New Mexico's 10) prison facilities," according to the company's website.
        PharmaCorr, CMS's pharmacy affiliate, "provides mail-order pharmacy services to the New Mexico prison system."
        CMS is named in more than 60 lawsuits in New Mexico, many of them in U.S. District Court in Albuquerque. The charges range from civil rights violations to medical negligence. Some have been dismissed due to lack of prosecution, according to court records.
        The company has faced litigation in several other states, including Michigan, Missouri and Mississippi.
        The American Civil Liberties Union has litigated some of those cases, which alleged inadequate medical care.
        "Correctional Medical Services has a national reputation for providing prisoners with grossly inadequate medical care," ACLU attorney Margaret Winter wrote in a 2005 news release announcing a lawsuit in Mississippi. "CMS has a shameful record of jacking up corporate profits by turning a blind eye to the urgent medical needs of sick prisoners."
        County Commissioner Michael Brasher said he has had "concerns" with the county's relationship with CMS for years.
        Among them are the contract extension CMS received without a request for proposals, and the company's "negative reputation nationally."
        Brasher said the issue came up again earlier this year when jail officials requested an additional $100,000 for medical services through CMS.
        "I have objected to CMS for a long time," he said. "So I was glad to see the contract go back out for an RFP this year."
        Canteen, which also has long-standing relationships with the corrections industry in New Mexico, is still providing laundry and some food services at the MDC.
        A search of court records shows more than 40 New Mexico cases in which Canteen is named as a defendant. Some of those cases have been dismissed — most for lack of prosecution — and others are pending in federal court.
        Canteen for several years had contracts with the state Corrections Department, spokeswoman Tia Bland said. But for the past decade, Bland said, the department has contracted with Aramark.
        Ethics complaint
        Villanueva says he has a bachelor's degree in business administration, with a minor in human resources, and a lengthy history in accounting.
        He says he managed a local Walgreens store and did accounting for four others.
        About a year-and-a-half ago, he said, he was hired by the county. He spent several months at the Public Works Department doing accounting work and other tasks.
        Villanueva said Dantis, the county's public safety boss, brought him to the jail around July 2009 to do accounting work and help balance the books.
        Shortly after Villanueva arrived at MDC, he said, he was assigned to audit the CMS and Canteen contracts. He says county officials told him that, once he was finished with those, he was to review the finances of the county's Community Custody Program, which is similar to house arrest.
        In fairly short order, Villanueva says he noticed serious problems with CMS and Canteen contracts.
        A series of e-mails Villanueva provided the Journal shows a meeting was scheduled with Torres to discuss Villanueva's findings. In the meantime, the e-mails show, the process had begun to get Villanueva access to the CCP facility so he could review that program's finances.
        Then, Villanueva says, he met with Dantis and County Manager Lucero.
        The county's news release says "Villanueva was unable to support his contention or analysis" in meetings with Dantis and others.
        A few days after the last of his meetings with the county brass, Villanueva says he noticed he no longer had access to any of the computer systems at the jail — systems he had used regularly to conduct the reviews.
        He sent an e-mail to the county's Human Resources Department asking to talk to someone "about me being retaliated against for talking to John Dantis. ... I spoke to John and now Ron (Torres) has taken all my clearance away. All I can do is look at the computer all day and go into e-mail. ..."
        The next day, on Oct. 30, Villanueva received an e-mail from Torres saying: "Until further notice you will be assigned to assisting with the mail. ... As in the past you will continue to report directly to me. ..."
        Villanueva was fired April 16.
        Villanueva says he was not given a cause for his termination.
        But the county's news release says Villanueva was fired "because he violated numerous County and Metropolitan Detention Center policies including fraternization with inmates, compromising security protocols, and violation of Internet use policies."
        County Commissioner Maggie Hart Stebbins said she met with Villanueva to discuss his findings earlier this year — before Villanueva was fired. She said she told him to file an ethics complaint.
        Villanueva filed an ethics complaint through the county website on April 20 alleging retaliation after he reported his findings.
        The status of that complaint is unclear.
        Commissioner Brasher said no one had ever told him about Villanueva's contract reviews and his findings.
        Lucero, through a spokeswoman, declined to be interviewed for this story.
        Dantis did not return Journal telephone calls. He is on vacation while a private law firm investigates his role in a possible cover-up of alleged wrongdoings by his son, who worked under Dantis for the county.

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