The U.S. Department of Labor has reaffirmed its contention that the District of Columbia must repay the federal government for wages that Labor said were improperly disbursed to 91 CETA workers formerly on the D.C. City Council staff, Mayor Marion Barry disclosed yesterday.
If the action sticks, the city would owe the U.S. Treasury at least several hundred thousand dollars, according to unofficial city estimates, with the precise amount to be computed from payroll records.
Barry's office said the mayor got word of the Labor Department's findings in a letter received last month from William J. Haltigan, acting regional head of CETA programs for the federal agency.
In a response released yesterday, Barry defended the city and said that "a total disallowance of costs and a requirement for reimbursement is an inappropriate and disproportionate sanction . . . not required by either the letter or the intent of . . . law."
Barry conceded that "procedural irregularities occurred," but that these "did not affect [the CETA program's] integrity."
The exchange was the latest round in a dispute that began early in 1978, when the Labor Department undertook an investigation that found the council's participation in CETA riddled with favoritism and abuse.
At the time, Walter E. Washington was mayor and Barry was a council member. Barry's name never figured in any public findings dealing with the CETA program.
Washington responded at that time that the city should not have to repay the funds.
Both the Labor Department and Congress moved last year to take all CETA workers off the council payroll. The last such workers were transferred to the regular city payroll on April 1.
CETA, the Comprehensive Employment and Training Act, was enacted by Congress earlier in this decade to provide work for unemployed and disadvantaged people, including young jobless professionals.
By law, CETA workers were not supposed to displace those who should be on a regular government payroll. But the council, its role expanded in 1975 by the Home Rule Charter, found CETA a handy way to obtain personel not provided by the regular city budget.
In its investigation, the Labor Department found that some workers had been hired under what seemed to be a political patronage system. There were other procedural flaws, it found. And it said CETA workers should not be assigned to work directly under politically elected council members.
The original Labor Department report listed 78 instances of alleged improprieties, a figure raised to 91 in the new letter to Barry.
Barry said in his response that fewer than 20 of the affected CETA workers had been active in council member's election campaigns.
In the cases cited, Barry wrote, "There is no evidence . . . that CETA employment was extended as a reward for political services, a reward that was either expected or promised, or not."