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Padding the Numbers: Seedco in NYC and Gutters in New Orleans

Federal agents carry out records from New Orleans Affordable Homeowners Corp. & indictments followed.

New Orleans    Sometimes it comes down to who you know, not what you can do, and in those circumstances when the screws start turning from the City paymasters, the favored few sometimes just start making up shit to save themselves rather than the families they are meant to serve.  This week I’ve had to read about companies in New Orleans who were supposed to be gutting houses for Katrina victims being indicted for fabricating addresses where they had supposedly done the work, often taking credit for work in fact that the ACORN gutting program had done, and about Seedco in New York City in a similar scandal fictionalizing 1400 job placements where either folks got jobs on their own or didn’t get work, but Seedco claimed success for their efforts or lack of them.

In New Orleans where ACORN financed a giant multi-million dollar effort using a combination of skilled crews and thousands of volunteers to gut more than 5000 homes, leading the recovery effort after Katrina (see The Battle for the Ninth Ward:  ACORN, Rebuilding New Orleans, and the Lessons of Disaster), we collected promises of funding and reimbursement from the City of New Orleans from the Mayor to all of the City Council, but never collected a dime.  We were silent, but not surprised when investigators examined our records and found that sometimes several City Hall chummy contractors had claimed ACORN gutted houses many times over.  We were not comfortable surrendering our records, so stayed clear of the mess.

We had been a subcontractor with the non-profit Seedco in Baltimore with our ACORN  Service Centers in providing tax preparation and benefit access services, and found the relationship beneficial enough there that it was an outlier for the national organization.  We came to rue some of this when Baltimore went off the rails on housing counseling and were scammed by O’Keefe in a related program.  Seedco is in New Orleans as well.  We met with them after the hurricane, but nothing came of it.  Their housing counseling program is partnered with the credit union that is now our landlord, and we share an address.  I think they mean well and often do good work.

Despite that disclosure, they are a New York City centric operation that funders have sought to expand, and from the leadership of Seedco down there is a “NY” implicit on their caps even to a major board member being the Ford guy who helped them get started and funded them in the beginning and their new president who was a long time New York government fixture.  All of which may explain why some of their job counselors felt pressured to fabricate results to keep their jobs and protect their $7 million contract with the City of New York.  It also may explain why their original internal investigation after the Times broke the story from whistleblowers inside, still turned up no evidence of fabrication in the numbers.  This week it comes out that the City is transferring the whole contract to another nonprofit, so their efforts to claim they had fired or pushed out those involved or responsible comes to naught.

It is interesting to read their statement published currently on their website about the New York City scandal as a classic, new school textbook listing of how institutions are supposed to respond to these kinds of operational problems.  I hate to think how much they and their funders paid to some so-called crisis-management team for that concoction.  It starts with “blaming the victims” – those down the chain of command at lower levels who couldn’t resist the city pressure and internal culture, so had to go; setting “new” standards; hiring someone internally to police the new standards; investigating internally though they admit, ineffectively; and whatever else might postpone the reckoning.  There was no mention of making the numbers good by finding the missing 1400 jobs.  There was no mention of the perhaps impossibility of the task in this economy and the need for more social service support to bridge the gap or the impossibility of making gold through some mysterious alchemy out of iron.

In both situations unfortunately sometimes the subcontractors are just too close to the paymasters to make the programs work.  Cronies are not always crooks, but they are always dependents.  The push to subcontract and privatize can cause lots of problems and the cities themselves should bear their responsibilities here, even though it’s always the weakest links in the chain that pay the price.  And, frequently, they meant well, too.