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Five years after being hired to reform the D.C. Public Schools food services program, former director-turned-whistleblower Jeffrey Mills is trying to recover what he claims is his lawful share of a multimillion dollar settlement resulting from his 2013 qui tam lawsuit against mega-vendor Chartwells-Compass Group LLC.
Mills brought evidence of vendor fraud to the attention of DCPS officials from 2010 through 2012; Chancellor Kaya Henderson fired him in 2013. He then filed a sealed complaint against Chartwells in D.C. Superior Court under the D.C. False Claims Act, and he provided a copy to the D.C. Office of the Attorney General. In April, the office joined Mills as an intervenor in his complaint, after working with him for two years to build the case, according to a court motion by Mills. The case settled in June for $19.5 million and prompted a D.C. Council committee to call for new competitive bids for DCPS food services for 2016-17. D.C. Inspector General Daniel Lucas and D.C. Auditor Kathy Patterson are reviewing the contract and the decision to outsource food services.
Attorney General Karl Racine’s office has offered Mills nine percent of the total settlement, court documents say, but Mills cites a 2013 amendment to the False Claims Act that calls for a 15- to 25-percent whistleblower share. Racine’s office declined to comment. In court filings, the office claims that the amendment does not apply to the case and that a portion of the settlement goes to charities before Mills’ share can be computed. The OAG also argues that Mills’ contributions were “minimal” and “not meaningful.”
Colette Matzzie, of Phillips & Cohen, filed a motion on July 31 requesting a 24-percent share of the total settlement for Mills. The OAG adopted almost all of Mills’ allegations, the motion states, including that Chartwells fraudulently induced a 2008 school food contract, violated “best price” provisions, and failed to remit rebates specified in a 2012 contract. Matzzie further argues that the OAG’s proposal frustrates the statute’s objective to guarantee recoveries for whistleblowers who take risks to recover public funds. Mills has yet to find full-time employment since being fired from DCPS. He settled a wrongful termination lawsuit with the District in 2014 for $450,000.
“None of this makes any sense,” says Sadie Barr, a nutrition researcher and food services consultant. “Without Mills there would be no lawsuit against Chartwells and no money recovered for the District. It is surprising that the OAG’s office is claiming ignorance to that. What is the purpose of the law if the city will not honor it?”
Patrick Burns, co-executive director of the whistleblower advocacy group Taxpayers Against Fraud, accused Racine’s office of “nickel-and-diming” Mills. “What kind of message does his office intend to send to D.C. taxpayers and voters?” Burns asks. “Do city school children not deserve better food? Do city taxpayers not deserve more integrity?”
Former DCPS employees have attested to problems Mills called to DCPS’s attention, problems that led to annual losses of up to $10 million per year. In a sworn declaration, Joel Metlen, former business operations manager for the Office of Food and Nutrition Services, wrote, “The funds that Chartwells agreed to pay DCPS were a direct result of Mr. Mills’ whistleblower lawsuit. The lawsuit was just a small part of [his] overall efforts to hold Chartwells accountable, which DCPS should have done itself. He was the driving force behind the effort.”
Ward 3 Councilmember Mary Cheh, a leading advocate for healthier school lunches, declined to delve into specifics, but says Mills clearly was responsible for bringing to light evidence of fraud in the school lunch program, and that the District should project appreciation and generosity where such efforts are concerned. “To winnow down a whistleblower’s share suggests to me that we are not being straightforward or fair to those who have recovered funds on behalf of the District,” Cheh says. “We should be rewarding whistleblowers who come forward with evidence of fraud, not cheating them out of their just deserts.”
Cheh and several members of the Committee on Education opposed renewal of Chartwells’ contract for the current school year, but settled for a pledge by DCPS to seek new vendor proposals for 2016-17. DCPS is currently visiting each ward to gather public input as it prepares a new Request for Proposal.
Henderson has resisted pressure to bring food services in-house, as most major cities have done. Food service is not a “core competency” of DCPS, she insists. And while Chartwells has received withering criticism for its food services, DCPS officials who have overseen the vendor have avoided any consequences related to those services, which the District has subsidized since 2008. (The U.S. Department of Agriculture reimburses schools under the free lunch program, and most districts either break even or turn a profit from school meals.)
Council Chairman Phil Mendelson says Mills’ case is more of a legal question than a Council one at this point. “This is an issue for the courts to decide, and we’re going to let the judicial process play out in this case.”
Photo by Darrow Montgomery