News
Nov 02 2009
Scant scrutiny, suspect spending
City paid felon to supply services despite vague business records
In 2005, Robin Beale was convicted in federal court of taking part in a local mortgage fraud scheme that bilked lenders out of hundreds of thousands of dollars.
One year later, she landed a million-dollar consulting contract -- from the District's AIDS program.
Beale Inc. was hired to provide experts, meals and note-taking to two advisory groups that help direct the spending of tens of millions of AIDS dollars. From the start, group members complained about the quality of Beale's work.
Yet the D.C. Health Department's HIV/AIDS Administration paid Beale's company more than $2 million over three years, approving invoices that listed unnamed employees and subcontractors, rent for a high-end office that was rarely used, and start-up costs for furniture and equipment that city officials later deemed improper, The Washington Post found.
In March, the HIV/AIDS Administration cut ties with the company. Now, advisory group members want to know what happened to the money.
"Beale should not have ever had that contract," said Wallace Corbett, who heads one of the groups. "She was in charge of hundreds of thousands of dollars. I would not have trusted her with anything."
Beale, 47, defended her company and blamed the advisory groups and the HIV/AIDS Administration for the runaway spending. She said city administrators ordered her to hire certain consultants and spend money on an office that was not needed.
"To see the way things were being done was horrifying," Beale said. "Money was being spent unnecessarily without it helping the cause."
In a two-part series last month, The Post found that the city -- with the highest rate of AIDS cases in the nation -- had paid millions in recent years to nonprofit groups that couldn't account for their spending or services for people with AIDS. An examination of the Beale Inc. contract shows that problems also extended to consultants, hired for everything from HIV studies to computer support.
Beale's job was critical. The company was supposed to provide supplies, meeting space, food and health-care experts to the local Ryan White Planning Council, which competes for federal AIDS funds for the Washington region and then decides how the money is spent. This year, the council directed the city to spend $25 million on medical and dental care, case management and counseling, among other programs.
Beale also supported another organization, the D.C. HIV Prevention Community Planning Group, which advises the city on the populations most in need of money for AIDS prevention. Combined, the groups have about 60 unpaid members, including health-care experts and caregivers, AIDS advocates, government officials and people living with the disease.
Leaders of the Ryan White Planning Council had learned early on about Beale's felony conviction through an Internet search. At the time, Beale was working on paying more than $400,000 in restitution for her part in a real estate scheme between 1995 and 1997 that used bogus paperwork and inflated appraisals to obtain mortgages for distressed properties. Three people went to prison, and three others, including Beale, were sentenced to probation. Beale cooperated with the FBI, records show.
Planning council members said they told Marsha Martin, director of the HIV/AIDS Administration at the time, and manager Gunther Freehill about Beale's crime.
"The administration said, 'That was apples, and this is oranges,' " said Danielle Pleasant, an eight-year member of the planning council.
Said former planning council member Barbara "Bobbie" Smith: "We told them that Beale was just found guilty of fraud . . . and they told us that they could spend [AIDS money] any way they wanted."
Martin, who was criticized during her 16-month tenure for failing to embrace the AIDS community, now runs an HIV-testing program for the city of Oakland, Calif. An official said she was traveling and could not be reached to comment. Speaking through Michael Kharfen of the HIV/AIDS Administration, Freehill said he had heard only that Beale had been in some kind of trouble but had not been given any details.
Kharfen, spokesman for the administration, added that Beale Inc. was not hired by the HIV/AIDS Administration but by another agency, the Office of Contracting and Procurement, which selects contractors throughout the District government. Records show the contract was competitively bid.
The HIV/AIDS Administration, however, has twice recommended the renewal of Beale's contract. D.C. Attorney General Peter Nickles said he did not know why the city hired Beale. He said that today, the District would probably have pushed to bar the company from working with city agencies.
"If the contract were presented today, the conviction would be a very significant item in the city's review of the contract and would probably lead the District to initiate a debarment proceeding," Nickles said.
Beale declined to comment on her conviction and said the HIV/AIDS Administration did not ask her about it.
'Never there'
From the start, planning council members raised questions about Beale's credentials and her company.
Records show that Beale Inc. incorporated in the District in 2001. The company's Web site, which features men in hard hats, describes an information technology and general construction services firm. Members of the planning council said Beale appeared to have no background in health care or HIV.
"No one knows where she came from," said Smith, the former Ryan White Planning Council member.
There were more worries about Beale's staffing. One early report showed that Beale Inc. had to hire a project manager, administrative assistant, office manager, stenographer, scheduler and translator. The company also did not have an office: On city records, Beale listed her home in Northeast as the place of contact.
"Think about it: If you were the chief financial officer of the District of Columbia, are you going to give a million-dollar-plus contract to someone that doesn't have an office?" said A. Toni Young, a member of the prevention group.
Beale said she was not required to have an office or health-care experience. She also said her company had experience working with other city agencies.
Planning council members, however, immediately began to complain about the quality of Beale's work, citing reports that were error-ridden and late and minutes of meetings that were often indecipherable.
"Some of the minutes were just trash. You couldn't even make sense of them," said Patricia Hawkins, a longtime member of the planning council.
At the same time, the group's members questioned Beale's expenses. They said they were denied line-item budgets and expense reports by Freehill, the administration manager, who, records show, approved some of the company's invoices. Speaking through Kharfen, Freehill said his agency, not the groups, was responsible for overseeing the contract.
Among other expenses, Beale Inc. charged $106,000 for office furniture and equipment. The D.C. Inspector General's Office called the costs "improper" and "unallowable" in a critical report last year on the city's AIDS program.
Although Beale ran the company out of her home, she charged the city for rent and supplies for an office on G Street NW. At first, the company charged about $4,000 a month for the office, but over time the price rose to $10,000 or more, records show.
Beale said the HIV/AIDS Administration demanded that she open the office so group members would have a place to meet and store records. She said she argued to close it and provided e-mails to The Post documenting her request. Kharfen said the HIV/AIDS Administration agreed to close the office last year.
Group members said the office had been chronically understaffed -- or not open at all.
"It was one of those rent-a-suites," said Young, the prevention organization member. "They were never there."
Although group members say the company had a skeletal staff, Beale Inc. billed as much as $64,000 a month to cover payroll, records show. On invoices, Beale did not provide the names of any employees, their hours or pay. Beale Inc. was also responsible for hiring health-care experts and other consultants to help guide the groups but failed to list those names on most invoices.
Some invoices provided no information. Over five months in 2007, records show, the company charged the HIV/AIDS Administration $355,000, citing only "logistics support" to the groups. Through Kharfen, Freehill said he had concerns about the lack of details but thought he could not challenge Beale's fixed-price contract.
Beale said that her company simply charged a portion of the total contract amount every month and that all invoices were approved by the city. She said the size of her staff varied from five to 15 people. When asked by The Post to provide the names and résumés of employees, Beale declined. "No matter what skills and experience they possessed, I do not feel that your paper would interpret those to be skills required for the job," she said.
Kharfen could not account for why Beale did not provide the names of employees on invoices. "That one, I don't know," he said.
Kharfen said the names of experts and consultants on invoices were not needed because the agency knew who they were. Agency officials frequently told Beale which experts to hire, according to records and interviews.
"I am not disputing that [the invoices] may seem vague," Kharfen said. "But actually, we knew the technical experts, because those were ones that we were working with directly."
Hawkins, with the planning council, said the lack of names left the city with no way to ensure that its money was properly spent.
"It leaves you vulnerable to fraud," she said.
Beale did not respond to a request by The Post to provide a list of consultants.
Concerned about Beale's work, planning council members in 2007 approached D.C. Council member David A. Catania. In a hearing that year, Catania (I-At Large) criticized Beale for "historic underperformance."
"I am frankly tired of paying adults real money to learn on the job," he said.
Yet the HIV/AIDS Administration would continue to work with Beale's company for more than a year.
'Difficult and rude'
Beale said the HIV/AIDS Administration and the two advisory groups dictated the spending, an allegation confirmed in some cases by city investigators.
The inspector general found last year that Beale had been directed to pay $28,000 for trips to Toronto, Atlanta and Houston for Martin and her staff. The inspector general concluded that the expenses were "unauthorized" and that AIDS money had been "misused," criticizing Martin for "a lack of adherence to the District's travel policies."
Kharfen acknowledged to The Post that the HIV/AIDS Administration under Martin had violated city travel procedures because Beale's contract covered only trips taken by the members of the advisory groups.
Beale also forwarded The Post e-mails from the HIV/AIDS Administration that directed her company to hire several consultants. One was Donald Hitchcock, brought on to run an HIV testing campaign in 2006. Hitchcock told The Post that his work was unrelated to the advisory groups. The HIV/AIDS Administration, he said, wanted to hire him and opted to pay him through Beale's contract for three months until the paperwork was complete.
"Beale just cut my checks," he said.
Beale also said some members of the groups were constantly requesting different or upgraded meals. Others came to meetings just to collect federally subsidized stipends, she said. Beale declined to name the group members.
"This question asks for me to determine a person's intent, without their verbal expression of that intent," she said. "I cannot read minds."
In February 2008, Shannon L. Hader, who had been newly appointed as the director of the HIV/AIDS Administration, sent a letter to Beale noting widespread deficiencies in the company's work, including inaccurate record-keeping and staff members who were "inconsiderate and inappropriate . . . difficult and rude."
Beale responded in writing, saying she considered the problems "small, isolated incidents that can easily be resolved."
City records reflect no action on the part of the agency.
Kharfen said Beale stopped working for the advisory groups in March, several months before the contract ended, forcing agency staff to pick up the work. The agency is searching for a new contractor.
"I don't want another Beale," Kharfen said.
Staff researcher Meg Smith contributed to this report.
One year later, she landed a million-dollar consulting contract -- from the District's AIDS program.
Beale Inc. was hired to provide experts, meals and note-taking to two advisory groups that help direct the spending of tens of millions of AIDS dollars. From the start, group members complained about the quality of Beale's work.
Yet the D.C. Health Department's HIV/AIDS Administration paid Beale's company more than $2 million over three years, approving invoices that listed unnamed employees and subcontractors, rent for a high-end office that was rarely used, and start-up costs for furniture and equipment that city officials later deemed improper, The Washington Post found.
In March, the HIV/AIDS Administration cut ties with the company. Now, advisory group members want to know what happened to the money.
"Beale should not have ever had that contract," said Wallace Corbett, who heads one of the groups. "She was in charge of hundreds of thousands of dollars. I would not have trusted her with anything."
Beale, 47, defended her company and blamed the advisory groups and the HIV/AIDS Administration for the runaway spending. She said city administrators ordered her to hire certain consultants and spend money on an office that was not needed.
"To see the way things were being done was horrifying," Beale said. "Money was being spent unnecessarily without it helping the cause."
In a two-part series last month, The Post found that the city -- with the highest rate of AIDS cases in the nation -- had paid millions in recent years to nonprofit groups that couldn't account for their spending or services for people with AIDS. An examination of the Beale Inc. contract shows that problems also extended to consultants, hired for everything from HIV studies to computer support.
Beale's job was critical. The company was supposed to provide supplies, meeting space, food and health-care experts to the local Ryan White Planning Council, which competes for federal AIDS funds for the Washington region and then decides how the money is spent. This year, the council directed the city to spend $25 million on medical and dental care, case management and counseling, among other programs.
Beale also supported another organization, the D.C. HIV Prevention Community Planning Group, which advises the city on the populations most in need of money for AIDS prevention. Combined, the groups have about 60 unpaid members, including health-care experts and caregivers, AIDS advocates, government officials and people living with the disease.
Leaders of the Ryan White Planning Council had learned early on about Beale's felony conviction through an Internet search. At the time, Beale was working on paying more than $400,000 in restitution for her part in a real estate scheme between 1995 and 1997 that used bogus paperwork and inflated appraisals to obtain mortgages for distressed properties. Three people went to prison, and three others, including Beale, were sentenced to probation. Beale cooperated with the FBI, records show.
Planning council members said they told Marsha Martin, director of the HIV/AIDS Administration at the time, and manager Gunther Freehill about Beale's crime.
"The administration said, 'That was apples, and this is oranges,' " said Danielle Pleasant, an eight-year member of the planning council.
Said former planning council member Barbara "Bobbie" Smith: "We told them that Beale was just found guilty of fraud . . . and they told us that they could spend [AIDS money] any way they wanted."
Martin, who was criticized during her 16-month tenure for failing to embrace the AIDS community, now runs an HIV-testing program for the city of Oakland, Calif. An official said she was traveling and could not be reached to comment. Speaking through Michael Kharfen of the HIV/AIDS Administration, Freehill said he had heard only that Beale had been in some kind of trouble but had not been given any details.
Kharfen, spokesman for the administration, added that Beale Inc. was not hired by the HIV/AIDS Administration but by another agency, the Office of Contracting and Procurement, which selects contractors throughout the District government. Records show the contract was competitively bid.
The HIV/AIDS Administration, however, has twice recommended the renewal of Beale's contract. D.C. Attorney General Peter Nickles said he did not know why the city hired Beale. He said that today, the District would probably have pushed to bar the company from working with city agencies.
"If the contract were presented today, the conviction would be a very significant item in the city's review of the contract and would probably lead the District to initiate a debarment proceeding," Nickles said.
Beale declined to comment on her conviction and said the HIV/AIDS Administration did not ask her about it.
'Never there'
From the start, planning council members raised questions about Beale's credentials and her company.
Records show that Beale Inc. incorporated in the District in 2001. The company's Web site, which features men in hard hats, describes an information technology and general construction services firm. Members of the planning council said Beale appeared to have no background in health care or HIV.
"No one knows where she came from," said Smith, the former Ryan White Planning Council member.
There were more worries about Beale's staffing. One early report showed that Beale Inc. had to hire a project manager, administrative assistant, office manager, stenographer, scheduler and translator. The company also did not have an office: On city records, Beale listed her home in Northeast as the place of contact.
"Think about it: If you were the chief financial officer of the District of Columbia, are you going to give a million-dollar-plus contract to someone that doesn't have an office?" said A. Toni Young, a member of the prevention group.
Beale said she was not required to have an office or health-care experience. She also said her company had experience working with other city agencies.
Planning council members, however, immediately began to complain about the quality of Beale's work, citing reports that were error-ridden and late and minutes of meetings that were often indecipherable.
"Some of the minutes were just trash. You couldn't even make sense of them," said Patricia Hawkins, a longtime member of the planning council.
At the same time, the group's members questioned Beale's expenses. They said they were denied line-item budgets and expense reports by Freehill, the administration manager, who, records show, approved some of the company's invoices. Speaking through Kharfen, Freehill said his agency, not the groups, was responsible for overseeing the contract.
Among other expenses, Beale Inc. charged $106,000 for office furniture and equipment. The D.C. Inspector General's Office called the costs "improper" and "unallowable" in a critical report last year on the city's AIDS program.
Although Beale ran the company out of her home, she charged the city for rent and supplies for an office on G Street NW. At first, the company charged about $4,000 a month for the office, but over time the price rose to $10,000 or more, records show.
Beale said the HIV/AIDS Administration demanded that she open the office so group members would have a place to meet and store records. She said she argued to close it and provided e-mails to The Post documenting her request. Kharfen said the HIV/AIDS Administration agreed to close the office last year.
Group members said the office had been chronically understaffed -- or not open at all.
"It was one of those rent-a-suites," said Young, the prevention organization member. "They were never there."
Although group members say the company had a skeletal staff, Beale Inc. billed as much as $64,000 a month to cover payroll, records show. On invoices, Beale did not provide the names of any employees, their hours or pay. Beale Inc. was also responsible for hiring health-care experts and other consultants to help guide the groups but failed to list those names on most invoices.
Some invoices provided no information. Over five months in 2007, records show, the company charged the HIV/AIDS Administration $355,000, citing only "logistics support" to the groups. Through Kharfen, Freehill said he had concerns about the lack of details but thought he could not challenge Beale's fixed-price contract.
Beale said that her company simply charged a portion of the total contract amount every month and that all invoices were approved by the city. She said the size of her staff varied from five to 15 people. When asked by The Post to provide the names and résumés of employees, Beale declined. "No matter what skills and experience they possessed, I do not feel that your paper would interpret those to be skills required for the job," she said.
Kharfen could not account for why Beale did not provide the names of employees on invoices. "That one, I don't know," he said.
Kharfen said the names of experts and consultants on invoices were not needed because the agency knew who they were. Agency officials frequently told Beale which experts to hire, according to records and interviews.
"I am not disputing that [the invoices] may seem vague," Kharfen said. "But actually, we knew the technical experts, because those were ones that we were working with directly."
Hawkins, with the planning council, said the lack of names left the city with no way to ensure that its money was properly spent.
"It leaves you vulnerable to fraud," she said.
Beale did not respond to a request by The Post to provide a list of consultants.
Concerned about Beale's work, planning council members in 2007 approached D.C. Council member David A. Catania. In a hearing that year, Catania (I-At Large) criticized Beale for "historic underperformance."
"I am frankly tired of paying adults real money to learn on the job," he said.
Yet the HIV/AIDS Administration would continue to work with Beale's company for more than a year.
'Difficult and rude'
Beale said the HIV/AIDS Administration and the two advisory groups dictated the spending, an allegation confirmed in some cases by city investigators.
The inspector general found last year that Beale had been directed to pay $28,000 for trips to Toronto, Atlanta and Houston for Martin and her staff. The inspector general concluded that the expenses were "unauthorized" and that AIDS money had been "misused," criticizing Martin for "a lack of adherence to the District's travel policies."
Kharfen acknowledged to The Post that the HIV/AIDS Administration under Martin had violated city travel procedures because Beale's contract covered only trips taken by the members of the advisory groups.
Beale also forwarded The Post e-mails from the HIV/AIDS Administration that directed her company to hire several consultants. One was Donald Hitchcock, brought on to run an HIV testing campaign in 2006. Hitchcock told The Post that his work was unrelated to the advisory groups. The HIV/AIDS Administration, he said, wanted to hire him and opted to pay him through Beale's contract for three months until the paperwork was complete.
"Beale just cut my checks," he said.
Beale also said some members of the groups were constantly requesting different or upgraded meals. Others came to meetings just to collect federally subsidized stipends, she said. Beale declined to name the group members.
"This question asks for me to determine a person's intent, without their verbal expression of that intent," she said. "I cannot read minds."
In February 2008, Shannon L. Hader, who had been newly appointed as the director of the HIV/AIDS Administration, sent a letter to Beale noting widespread deficiencies in the company's work, including inaccurate record-keeping and staff members who were "inconsiderate and inappropriate . . . difficult and rude."
Beale responded in writing, saying she considered the problems "small, isolated incidents that can easily be resolved."
City records reflect no action on the part of the agency.
Kharfen said Beale stopped working for the advisory groups in March, several months before the contract ended, forcing agency staff to pick up the work. The agency is searching for a new contractor.
"I don't want another Beale," Kharfen said.
Staff researcher Meg Smith contributed to this report.
