Sunday, May 18, 2003

Lawsuits, new laws might help crackdown


Child-care firms claim immunity from state audits

By Debra Jasper
and Spencer Hunt
Columbus Enquirer Bureau

State leaders who say Ohio doesn't do nearly enough to get back hundreds of millions in misspent tax dollars are scrambling to change the system.

Attorney General Jim Petro plans to file 17 lawsuits in the next few weeks against companies and public agencies cited in state audits for improperly spending tax dollars.

In addition, his staff has called 58 lawyers, written 27 letters and taken other actions to follow up on all state audits. Petro says he is going after even small

amounts of money to send a strong message that people can't get away with misspending tax dollars.

"We need to be sure that people understand that if they abuse their relationship with the public, they are at risk of being sued," he says.

State Auditor Betty Montgomery says she will lobby for a new law to give her more power to audit private contractors.

"We need as much authority as we can get to follow public dollars into the private sector," she says.

Montgomery started pushing for new audit powers after the Enquirer revealed last year that 72 of Ohio's 88 counties failed to oversee the private companies they hired to help the mentally retarded. The newspaper found that workers abused and neglected people and counties often didn't even know if workers showed up to do their jobs.

Citing the Enquirer's stories, 20 lawmakers asked Montgomery to audit more private firms. She says a new law is needed to clarify her authority because the Ohio Association of Child Caring Agencies filed a lawsuit last year arguing foster-care firms aren't subject to state audits. The suit maintains that public tax dollars become private once they reach a private company.

Even if the court upholds the lawsuit, Montgomery and Petro believe private companies still would be subject to state audits if government contracts require them.

"They (private companies) say, 'You have no right to know what we are doing with your tax money,' " Petro says. "I say, 'We can cure that with a good contract.' "

Lawmakers also are exploring ways to overhaul the system.

Democrats, including Sen. Mark Mallory of Cincinnati, want to create an independent commission to examine state agencies and hold them accountable.

Until that happens, Mallory says, agencies and contractors "can mismanage, misuse and misspend millions of tax dollars, and there will be virtually no repercussions. It's horrible."

Sen. Jeff Jacobson, a suburban Dayton Republican, wants to give the state more power to recover misspent tax money, even if companies already have spent it. He wants to change state law so officials could go after assets if a firm has no cash on hand.

"Companies doing business with us shouldn't be allowed to spend tax dollars on luxury cars or baseball tickets," Jacobson says. "And if they play games with us by saying, 'We already spent the money, and we're broke,' then we should be able to go after the assets they bought with our money."

He says these measures will help the state crack down on people who waste tax dollars.

"I've run into a veil of silence from some of these companies who feel we shouldn't be able to look at what they do, as long as the people they are taking care of are still breathing and aren't hospitalized. That's not right," Jacobson says.

"What we're doing is not nearly good enough."

E-mail djasper@enquirer.com and shunt@enquirer.com




SPECIAL REPORT: OHIO'S LOST MONEY
Money's gone, Ohio gets little back
Lawsuits, new laws might help crackdown
Wasted money? It all depends
Who's accountable?
Weak contracts waste tax money

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