Judges’ Group Fights ‘Firestorm’

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Mentaberry: “We disagreed with the government.”

When staffers at the National Council of Juvenile and Family Court Judges filled out timesheets to show how many hours they worked under various grants, they didn’t always write the hours they thought they worked on each grant. Sometimes they billed their hours to whatever grants a supervisor told them to.

That practice led to e-mails like these, in which employees refer to the council’s grants in shorthand:

“I only had 10.75 hours charged to Victims. Do I need to change some of my Packard (61.75) hours to Victims?”

“Don’t charge any time in March to 21101 until I check with Accounting to see if we have any $$ left. … We can charge that time to 33603 instead if we need to.”

“Would you please reconsider your hours billed to the Georgia project (e.g. dedicate some of the hours you spent on Victims or Packard II last week to Georgia)? I will do the same.”

Such e-mails became part of a U.S. Department of Justice (DOJ) fraud investigation into how the council administered its federal funds, which ended in April after the council agreed to pay $300,000 to settle the case. In a way, the council dodged a bullet: The DOJ once said it had $4.7 million in claims against the council, and the settlement was kept quiet.

Then the deal hit the news media in late April, and the council’s reaction cannot be overstated: Executive Director Mary Mentaberry called the incident a “firestorm,” a “mess,” and one of the “most significant challenges the NCJFCJ has faced in its history.” They launched a public relations campaign that included newspaper advertising, a trip to Washington to allay the concerns of federal funders at DOJ and the Department of Health and Human Services, recruitment of support to help “rescue” the council, and complaints about those who helped to make the case public.

“Our organization is an incredibly important organization,” said Council President Susan B. Carbon. “We do take any information that casts any negative aspersions on our organization very seriously.”

It would be serious indeed if funders and others in the justice field believe the nonprofit council purposefully or routinely duped grant makers, as claimed by the former employee who started the federal probe. The council says the dispute was over administrative procedures that it did not believe were wrong, but that it has taken care of with procedural changes and new software.

Following is a summary of how the case began, some of what the DOJ found, and how the council has tried to contain the damage.

The Accusations

Founded in 1937 to improve juvenile courts, the council is venerated by many for its work in juvenile justice, but derided by others as too rich and arrogant. Based at the University of Nevada at Reno, the council’s programs include training judges and staff in juvenile and family courts. It has 100 employees and an annual budget of $15.3 million.

Serena Hulbert went to work there in 2001. Hired as a staff attorney, Hulbert eventually became its Safe Start program manager (overseeing a DOJ grant of the same name), then manager of its Special Projects division. In the latter post, Hulbert complained of numerous irregularities in how the council tracked and managed grant funds.

In subsequent court statements, Hulbert claimed that the council refused to let her see all the budget documents for the projects she managed, paid people salaries that were lower than the salaries reported to the federal government, never filled positions for which it got federal funds, used federal dollars to hire relatives of council managers, and instructed employees to bill their time to grants even when they didn’t work on those grants. The latter is the subject of the e-mails cited in this article, which are from 2004.

The council said Hulbert’s accusations were off-base and that the real problem was that she was adversarial and didn’t listen well, according to a summary of the case by the Nevada Department of Employment, Training and Rehabilitation. She had a series of runs-ins with management over these and other issues; after a loud conflict with a co-worker in 2005, according to the summary, Hulbert was fired.

She then did something unusual: She and her attorney, Mark Thierman, took her fraud allegations to the U.S. District Court for Nevada, filing a qui tam action on behalf of the federal government. A qui tam action is like a court version of a citizen’s arrest. The suit demanded repayment of federal funds under the Civil False Claims Act.

That set off an investigation by the DOJ, which joined the lawsuit and became the lead negotiator.

The suit alleges, among other things, that the council:

• Collected grant funds by billing for fictitious workers, double-billing for overhead and filling out employee time sheets “to meet predetermined billing targets, regardless of the actual hours worked on each grant by the employee.” Hulbert charges that supervisors sometimes ordered employees to fill out their time sheets not according to how much time they spent working on certain grants, but according to how much money was left in the different grant pots.

• Hired Mentaberry’s husband as a real estate agent to negotiate leases from 1997 to 2001, for which he received nearly $95,000 in commissions, and hired the husband of the director of administration as a computer consultant in 2001 and 2002, paying him $2,000. The claim says those actions violate the DOJ’s conflict-of-interest regulations for grantees.

During that time, Mentaberry was director of the organization’s Permanency Planning for Children Department. She became executive director in 2004.

• Wrongfully fired Hulbert for asking about “questionable practices” regarding grants that the council had appointed her to oversee.

The Settlement

The department found $800,000 in misspent funds, according to one DOJ e-mail. A draft of the settlement said it had claims against the council of $4,713,443.54. That includes both allegedly misspent funds and various penalties, the latter of which can easily add up to several times the amount of the grant money in question.

It does not appear that the department ever asked for that amount. In one e-mail, a DOJ official says the department would seek $400,000 from the council, and $75,000 from Mentaberry for the conflict of interest claim regarding her husband’s real estate work.

In April, the two sides settled for $300,000 from the council and $16,500 from Mentaberry. DOJ agreed to give 15 percent of the money to Hulbert.

Thierman, Hulbert’s attorney, wanted the council and Mentaberry to admit wrongdoing. In an e-mail to Thierman, Assistant U.S. Attorney Roger Wenthe said that was unlikely. In such cases, he wrote, the “organization will settle only if the agreement recites that they are not admitting liability or wrongdoing.”

The settlement includes this language: “The agreement is neither an admission of liability by the NCJFCJ nor a concession by the United States that its claims are not well founded.”

The Disclosure

Although the DOJ routinely announces settlements resulting from its investigations, it did not announce this one. But a short description of the settlements was included in an internal DOJ summary of activities.

Lou Biondi of the DOJ Inspector General’s office e-mailed that description to Alvin Cohn, a veteran in the juvenile justice field and past president of the National Juvenile Court Services Association, which is an affiliate of the judges’ council. Cohn says he forwarded the e-mail to some colleagues at the association.

The e-mail circulated around the juvenile justice field and reached Youth Today and ABC News. Not having expected media calls about the case, lawyers for the council and Mentaberry took hours to issue statements, which said:

• The council did not admit wrongdoing, but settled the case in order to avoid long, costly litigation and to focus on its mission. The council’s statement, from Carbon, its president and a judge in Concord, N.H., said the council “has reviewed its administrative and training policies to insure that the Justice Department will not have such concerns again.” If that sounds like the standard corporate line in such settlements – “we did nothing wrong and promise not to do it again” – Mentaberry said this to the Reno Gazette-Journal last month: “We disagreed with the government. We changed our procedures and practices in regard to the claim.”

• The real estate arrangement was worked out before Mentaberry was executive director, and the fees to her husband were paid by the landlord, not the council.

While the council’s message was that these were not purposeful acts for which someone should be punished, some people at DOJ seemed to believe differently.

In his e-mail to Thierman, Assistant U.S. Attorney Wenthe wrote, “It is apparent that this investigation has adversely affected her [Mentaberry’s] career in a very significant way. Perhaps that is as much of a victory in that regard as we can reasonably hope for.”

Youth Today posted a story on its website on April 29, and ABC posted a story on its site hours later.

By day’s end, the council was in damage control mode. In an e-mail to staff, Mentaberry said the organization “is caught in a firestorm of controversy,” and referred to a “scathing” story by Youth Today. The Gazette-Journal ran a story the next day that drew a larger and more direct response.

The Reaction

The council’s public relations campaign pursued at least three strategies: Downplay the severity of the allegations, put some blame for the controversy on those who made it public, and repair damage among funders and other constituents through personal diplomacy and endorsements from allies.

The council carried out these efforts on several fronts:

Rally staff: “This is without a doubt one of the most significant challenges the NCJFCJ has faced in its history,” Mentaberry wrote in her April 29 memo to the staff. She noted that an ally of the council had already responded to the Youth Today story on its website, and “I am hoping that others in the field come to our rescue.”

As for the leak, she writes that the “media feeding frenzy” (at this point, two stories) resulted from “one OIG staff member’s need to share misinformation with a friend (Alvin Cohn) and that friend’s decision to share this with numerous colleagues.” She said some of the information in the DOJ summary was incorrect, and the disclosure of other information “was to have been limited under the Privacy Act.”

Cohn was surprised to be cited as a cause of trouble. He said the investigation was widely known in juvenile justice circles, although the details were “hush hush,” and that he shared the e-mail only with some association colleagues. “There were a couple of people who worked for Mary who didn’t know about the settlement,” he said.

Ironically, Cohn noted that when he received an Outstanding Lifetime Achievement Award from the association at a conference in March, one of the people presenting the award to him was Mentaberry.

Public outreach: Days after the Gazette-Journal published its story, the council took out a full-page ad in the paper to defend itself. Presented as a letter from Carbon to “Dear Members of the Community,” the ad referred to “misleading news reports,” summarized the history and good work of the council, cited the lawsuit by a “terminated” employee, and said the council cooperated in the DOJ inquiry about “administrative procedures” for work done “some time ago.” It said the problems were corrected with “new software and administrative mechanisms,” and noted that neither the council nor Mentaberry “admitted to any wrongdoing.”

The Gazettte-Journal said a one-time full-page ad for a nonprofit costs $4,600.

The council posted the letter prominently on the home page of its website, along with solicited testimonials of support from people in the justice field around the country. They include statements praising the work of the council from judges in such places as Los Angeles; Chicago; St. Joseph, Mo.; and Douglasville, Ga. The site also posted a letter written to the Gazette-Journal by Shay Bilchik, former head of the U.S. Office of Juvenile Justice and Delinquency Prevention (OJJDP), one of the council’s longtime funders.

In an interview, Bilchik said it would be unfortunate if this incident damages the work of the organization. At OJJDP, he said, “I always felt that I got a good investment” on federal grants to the council.

Mentaberry also met with the Gazette-Journal editorial board – accompanied by a past president and a prominent sociology professor from the University of Nevada at Reno, where the council is based – to press her side of the story.

Reassure funders: In her April memo to the staff, Mentaberry’s major worry was whether the publicity would hurt the council’s finances. “I am sure that some of our funders will have concerns,” Mentaberry wrote. She urged staffers to share her responses with them, including her position that “the information released by Youth Today is based upon a complaint brought by a former disgruntled employee.”

Last month, she and Carbon flew to Washington to meet with officials at federal agencies that fund the council. The DOJ and the Department of Health and Human Services provide 76 percent of the council’s budget, according to the council.

Reached on her cell phone in Washington on the night before the meetings, Mentaberry rejected several requests from Youth Today to meet while she was in town. “I’ve got nine appointments,” she said, then only “15 minutes” to make it to the airport.

‘Moving Forward’

In a telephone interview late last month, Carbon declined to comment about the e-mails, saying that they are being taken out of the context of a three-year investigation involving thousands of documents that DOJ examined. She said it would take too long to provide that context, and cautioned, “You can create a perception of something that doesn’t exist by extrapolating sentences and putting them together.”

Asked what has been inaccurately reported about the case, Carbon cited the DOJ summary saying Mentaberry “hired” her husband for the real estate work (no media outlet appears to have reported the story that way), and a statement in the Gazette-Journal saying that the settlement leaves open “the possibility of criminal action.” Carbon produced a letter from the U.S. Attorney’s Office from this past January, saying it had no intention to pursue criminal charges.

“All of us are moving forward,” she said. “This is over and done with.”

Maybe. After the settlement was finalized in U.S. District Court in Reno, Hulbert filed a wrongful termination suit against the council. The council’s newspaper ad says that it “stands by its decision to separate the employee.”