Funds in Health Contract Shifted to Pay Consultants

In fall 2000, the D.C. Maternal and Child Health Administration awarded a $688,000 contract to an Alexandria firm to set up an automated telephone help line for low-income families seeking services.

The agency promotes health programs to low-income mothers, including prenatal care and efforts to reduce infant mortality with its 1-800-MOM-BABY line. Some time after the contract was awarded, however, the agency scrapped the system, deciding there were too few calls.

But the contract, which had gone to Advanced Resources Technology Inc., was not canceled. Instead, agency officials treated the funds like an open checkbook, records show. On the city's books, the spending looked like it was related to work for the phone system and database. But in fact it was covering the costs of a variety of consultants and services. The contract would last for four years and grow to $2.1 million.

Within days of signing the contract with ARTI, the city told the firm to hire Memphis consultant Alnita Trawick McClure, the college friend of an agency employee. In other instances, the agency hired temporary workers and once again passed the bills along to ARTI, which listed the $41,810 cost on its invoice as "equipment/misc."

Two former city employees received payments under that category: Jacqueline Watson and her company were paid $47,000 for consulting on the school health program, and Barbara Hatcher was paid $15,300 for writing two grant applications.

Hatcher said she was unhappy about the process and had complained when the agency told her she had to be paid through a third party. Watson said she consulted for the agency frequently and cannot remember those specific payments.

The arrangement allowed the agency to spend money without competitive bidding or seeking proper approval. Instead, agency officials simply sent the consultants' bills to ARTI, which added them to its District tab. The firm collected more than $200,000 as a service charge for passing on the bills.

ARTI executive Charles Johnson said the firm did not know what services the consultants had performed and paid them because the city asked it to do so. His company's work on the phone and database added up to just 15 percent of the contract total, invoices show.

McClure, the Memphis consultant, became the biggest recipient of payments under the ARTI contract. Her first bill was for $35,760 to prepare a presentation with agency head Marilyn Seabrooks Myrdal at a conference in Boston, including 30 hours to debrief Myrdal at $100 an hour.

Myrdal vouched for the work. "I don't think the hours are excessive," she said.

In the end, much of McClure's work was for projects that the agency dropped. She hired a film crew and created a video that was never shown. She planned town hall-style meetings that were not held, crafted a public-health presentation the department did not use and prepared a women's health data book that was not published.

"Even when things did not result in something, the process produced information that was useful," McClure said.