The former head of food services for the District’s public schools, who was fired after clashing with Chancellor Kaya Henderson last year, alleges in a lawsuit filed Wednesday that the school system was overcharged, billed for spoiled produce and shorted millions of dollars by its largest food vendor.
Jeffrey Mills said in an interview this week that problems with the system’s food services contract are symptoms of the school administration’s weak oversight and mismanagement.
“This is not just a food issue; this is an education issue,” said Mills, whose lawsuit in the U.S. District Court for the District of Columbia alleges that he was fired in January 2013 for raising alarms about the contract and seeks back pay and other damages. “If the money is being wasted, that’s money not being spent on other school programs.”
The District’s inspector general and attorney general are looking into the school system’s money-losing contract with the food vendor, Chartwells-Thompson Hospitality, according to several people close to the inquiries, including two who said they had been interviewed by investigators.
Mills’s lawsuit and the government inquiries are focused on a contract worth more than $30 million a year to serve the city’s 45,000-student traditional public school system, which has many poor children who rely on the service as their primary meal provider.
Problems with Chartwells have surfaced in other cities, including New York and Chicago.
A spokeswoman for the D.C. school system referred questions to the D.C. attorney general’s office, which declined to comment. In the months before Mills was fired, Henderson told the D.C. Council that she did not have “confidence” in her food service staff.
Chartwells said Mills’s accusations are baseless.
“The allegations in this lawsuit have no basis or merit. They were brought by a former employee of DCPS who is disgruntled,” a spokeswoman for Chartwells said in a statement late Wednesday. “We are proud of the work that we do and honored to have the opportunity to serve the children of DC healthy, fresh and nutritious meals.”
Mills, a former New York City restaurateur, was hired by then- C hancellor Michelle A. Rhee in 2010, with the goals of increasing the number of meals served, controlling costs and improving the quality of the food.
Some healthy-food advocates questioned his qualifications, citing his lack of experience with school food.
But his efforts were appreciated by parents and some members of the D.C. Council, including Mary M. Cheh (D-Ward 3), who had pressed for healthier meals. Mills replaced chicken nuggets with bone-in chicken and fish sticks with Cajun tilapia. He also got rid of sugary strawberry-flavored milk.
Mills, however, said he faced resistance from school leaders, including Henderson and then-Chief Operating Officer Anthony deGuzman, after repeatedly questioning whether the contract with Chartwells was being properly managed and executed.
“I yelled, screamed and did whatever I could to get them to do what they were supposed to do under the contract,” Mills said in an interview. “The culture at DCPS was, ‘Don’t rock the boat.’ ”
Criticism of Chartwells’s agreement with the school system, which began in 2008, is not new. In December 2012, the month before Mills was fired, an independent audit commissioned by the school system backed up many of Mills’s concerns. The audit found that District taxpayers had subsidized a meals program that had operated at a loss of more than $10 million a year since Chartwells’s contract began.
The company was contracted to serve 50 million meals to D.C. students at a cost of $42 million. But the company served 15 million fewer meals and charged $7 million more, the audit report said.
At the time, Chartwells said the audit was “highly-flawed” and contained “fundamentally inaccurate information.”
The District operated its own school lunch program until 2008, when Rhee decided to hire private contractors in an effort to save money.
After Mills arrived in 2010, he campaigned to reestablish an in-house meals program, an idea that gained traction with a majority of D.C. Council members. Henderson rejected the proposal, saying the system needed to focus on improving academic achievement.
Henderson resisted pressure to establish a pilot program for in-house meals, citing her lack of confidence in Mills and his team.
“I do not have confidence that my current food service staff has the capacity to manage a self-run food service program, even at a small scale,” Henderson wrote to the council in March 2012. “To date, we have had significant challenges appropriately managing the few contracts we have in place. Our team has not demonstrated proficiency in human capital management or project management.”
Mills contends in the lawsuit that during his three years as director, he repeatedly reported — in e-mails and conversations with his supervisors — the many times the company failed to meet its obligations to the school system. For example, Mills said, Chartwells ordered two or three times as many perishable food items as needed, “knowing that they would go bad rather than be used” and charging the school system for the “stockpiled” food.
Mills alleges that the company overcharged for food and kept vendor discounts that it was required to pass along to the school system. The independent auditor found that it could not tell whether the school system received those discounts.
In the 46-page lawsuit, Mills also alleges that school officials tried to give Chartwells an unfair advantage in the competition for the city’s business and took the unusual step of changing the contract after it had been signed.
School officials said they rebid the contract because they, too, were concerned about the financial losses under Chartwells’s original four-year contract. Chartwells bid and won a $29 million contract to serve 107 schools in 2012-13.
Mills alleges in his lawsuit that Henderson and deGuzman “seemed eager to excuse the company’s abysmal performance and were attempting to tip the 2012-2013 RFP in Chartwells’ favor.”
DeGuzman could not be reached Wednesday and did not return e-mail messages seeking comment.
A former colleague of Mills’s, Joel Metlen, said in an interview that he shared many of his concerns about the contract. School system officials often didn’t respond quickly to those concerns, said Metlen, who was the food service division’s business operations manager before resigning in 2013.
“The way DCPS operated made it difficult for us to do the job that we were supposed to do,” Metlen said.
Metlen said he and Mills believed that they had a serious mission to ensure students were served healthy meals and that Mills was “really good at providing that vision and at pushing people to do their best.”
“That’s essentially what got him almost in trouble. He was always pushing, always pushing, to make things better, and that is going to annoy someone eventually,” Metlen said.
Metlen said District investigators have twice interviewed him about Chartwells and the school system’s decision to award it a new contract in 2012.
Investigators also interviewed at least one other person as recently as March, according to that person, who spoke on the condition of anonymity. A representative of the D.C. inspector general declined to comment Wednesday.
At D.C. Council hearings, parents have questioned whether for-profit companies should be running the school meals programs, and they have pointed to problems with Chartwells in other cities.
The New York state attorney general reached an $18 million settlement with the parent company in 2012 after investigators found that Chartwells overcharged 39 schools and school districts between 2003 and 2010. The company had charged its clients full prices for food instead of passing along discounts as the contracts required.
Also in 2012, an inspector general’s inquiry discovered that the food service director for the Chicago school system had accepted thousands of dollars’ worth of gifts from Chartwells, which had a contract to provide meals at hundreds of city schools. The director resigned under pressure from the superintendent and Mayor Rahm Emanuel (D). At the time, the company declined to comment on the situation.