State whistleblowers are rewarded for challenging contract

Thursday, July 13, 2006
Bill Sloat
Plain Dealer Reporter

Cincinnati- Four state whistleblowers will split a $232,000 settlement from a welfare-reform contractor that they said billed Ohio at excessive rates and received payments for work it was never hired to perform.

Some of that work included preparing data for one of Gov. Bob Taft's State of the State speeches, their lawyer said Wednesday.

All from the Ohio Department of Job & Family Services, the whistleblowers invoked an 1860s-era federal law, the False Claims Act, that allows citizens to seek a reward for challenging improper practices that involve government contractors.

By 2004, state officials conceded the system would never do what was envisioned.

Under the settlement, the company said it "billed and obtained payment for work unrelated to the development of this system." It also acknowledged overbilling the state - charging hourly rates for employees that were too high given the employees' backgrounds and work they did.

American Management Systems got its first contract in 1998 under Gov. George Voinovich, now a U.S. senator. It got more work from Taft's administration up through 2002.

Canadian competitor CGI Group, whose stock is traded publicly on the New York Stock Exchange, bought the company two years ago.

Rick Morgan, the whistleblowers' lawyer, said the settlement has been in the works since last summer.

AMS got into a jam, he said, because it tried to please Ohio Department of Job & Family Services administrators who assigned the consultants work they weren't supposed to do.

"What you had is American Management Systems people helping prepare the State of the State address for Gov. Taft. They got paid for things like that, things that weren't directly related to welfare reform," Morgan said.

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