Ohio Wants Whistleblower to Pay Its Court Costs


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Whistle-blower still owes $34K after refusing to pay for 5 years, state insists

Man who alleged fraudulent spending is being ordered to pay court costs.

By Steve Bennish, Staff Writer Updated 12:05 PM Saturday, December 26, 2009

COLUMBUS — More than a decade after whistle-blowing about fraud at anti-poverty agencies including one in Montgomery County, a former state government manager is the target of a state-sponsored effort to collect $34,000 — that includes interest — the state says it spent defending itself.

Terry Wilkins, 55, who spent years shuttling to lawyer’s offices and federal court pursuing wide-ranging allegations including the squashing of his free speech rights, isn’t remaining silent.

He refused to comply Oct. 13 during a deposition in Fairfield County Common Pleas Court to examine his assets.

“This action is an effort to extort money from a whistle-blower and I’m morally obligated not to cooperate,” Wilkins told the state-hired attorney before walking out. Now, the independent businessman fears the state will try to seize his home or business.

“Fining whistle-blowers for speaking out on matters of public concern is unethical, immoral and I’m not going to cooperate,” Wilkins said.

After two federal lawsuits, four appeals and many depositions, no one — including a federal judge — has disputed that taxpayer funding was too-often diverted from its targets or that Wilkins had a major falling out with Ohio Department of Development supervisors.

Still, Wilkins, a pet store owner and authority on reptiles, has been ordered by federal court to pay the state about $34,000, an amount that has grown by $8,500 because of 5 percent interest over the years Wilkins has resolutely refused to pay. The bulk of the bill is for deposition transcripts of state employee witnesses.

These days, the state is hosting a new surge in anti-poverty and community development spending, courtesy of $38.9 million in Obama administration stimulus funding directed to the state’s 52 community action agencies. The money is distributed by the Department of Development, which is charged with making sure federal funds are spent for their intended purpose.

Former Miami Valley state Sen. Jeff Jacobson, who held a hearing on action agencies in the 1990s, said it’s time for the state to lay off Wilkins.

“I realize that the state has this judgment, but they are in the wrong to go after him,” he said. Wilkins “raised very serious issues with the way the funds were used to help poor people. The funds were misused by not just one but more than one agency in the state.

“He helped a lot of people and the state by making us aware that the oversight was not where it should be. The bureaucracy at the time was more interested in punishing him than making sure the money went to help the poor people who needed it instead of a few people it was enriching,” Jacobson said.

Attorney Sandy Spater said Wilkins, his client, is paying too high a price for raising important questions under the federal False Claims Act. “I think it’s ridiculous myself,” Spater said. “I don’t like to use the word technicalities, but a jury never heard the merits (of the cases). Essentially, what happened is both cases were thrown out by judges rather than allowed to go to a jury to decide if Terry was terminated for protesting the misuse of funds by local agencies.”

Wilkins has written letters about his situation to Gov. Ted Strickland and Attorney General Richard Cordray, whose office farmed out the collection effort to Douglass & Associates Co., a Cleveland firm working on a commission fee of 33 percent on the first $30,000 collected.

Wilkins has yet to receive an answer to his liking from either top official.

Kim Kowalski, spokeswoman for Cordray, said the decision to pursue collection rests with the Department of Development. “We are their legal counsel; we are collecting money on their behalf. They are our client. They make the final decision.”

Department of Development spokeswoman Kimber Perfect said: “We have an order from a federal district court and on behalf of the taxpayers of the state of Ohio. We are working to collect on that order.”

In 1991, Wilkins was chief of the state Office of Community Services. By 1993 he was out of a job.

As events unfolded, the Lima-Allen County and Montgomery County action agencies would collapse amid questions of misspending, mismanagement and unpaid debt exceeding $1 million.

A Dayton Daily News series in 1995 that relied on state internal audits, memos and other documents, found that action agencies throughout Ohio misspent hundreds of thousands of dollars on luxury autos for executives, real estate deals placing property in private hands and programs that did not exist.

In an 82-page decision regarding Wilkins, federal Judge James L. Graham said federal law does not require the state to “guarantee” that federal grant funds will always be used for ‘‘proper purposes.”

It’s not that the Department of Development hasn’t continued to find issues with its grantees.

For example, Ohio has reimbursed the federal government for $210,000 for disallowed spending of community block grants from 2000 to 2009, records show. In Home Energy Assistance Program funding, the state has reimbursed the U.S. $966,000 since 2000.

In 2009, audits turned up $29,000 in disallowed costs — after the state first questioned $489,423 in spending among $139 million in spending audited.

A key Wilkins contention is that the state too readily bargains down or ignores disallowed costs and corrupt practices over an extensive period of time, and the Columbus Metropolitan Area Action Agency collapse in 2005 is one example, he said.

Despite his battles with the state, Wilkins has had success elsewhere. He’s been in business since 1994 and now has two locations with a dozen employees. Married since 1990, he’s the father of two school-age children.

But time has not mellowed his opinion of state oversight. Of the stimulus money allocated, Wilkins said it’s already in danger of being lost to fraud.

SOURCE Dayton Daily News

Read the full article here.



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