Feds demand Hillsborough, Pinellas return $4.3M in CareerSource misspending

careersource
'It’s not unexpected. They just didn’t know what it would be.'

Pinellas and Hillsborough taxpayers must repay the federal government more than $4.3 million for misspending by the former leader of two public job centers, the U.S. Department of Labor ruled. Both counties have 30 days to repay the money.

The federal audit determined that Edward C. Peachey, the former CEO of CareerSource Pinellas and CareerSource Tampa Bay, gave himself and other top aides unauthorized salary increases totaling $468, 917, federal records show. Peachey also awarded staffers $1.3 million in improper incentive compensation to falsify job placement figures, records show.

For years, both job centers were hailed as some of the best in Florida for how they put people to work.

That reputation imploded when a Tampa Bay Times investigation by Mark Puente and Zachary T. Sampson uncovered fake job placements and widespread abuses that Peachey enacted. State and federal investigators, including the FBI, immediately launched investigations.

“Mr. Ed Peachey, former CEO and president … managed these operations with improper governance and administrative structures, which resulted in a lack of adequate oversight, the mismanagement of funds, and other violations of federal law,” the audit said.

“Based on information obtained, the reviewers concluded that these structures were strategically developed to avoid implementing internal controls, leading to improprieties, conflicts of interest, undue influence, and other program risks.”

For months in 2018, Peachey and his attorney, Marion Hale, dismissed the news reports and said Peachey did nothing wrong. More than a dozen board members in both counties stood by Peachey and hailed him as an extraordinary leader.

The career center’s boards of directors eventually fired Peachey as public officials denounced the job centers. The FBI investigation was still underway this year.

The audit blasted Peachey for skirting the rules to enrich himself. He received a total of $408,487 between 2006 and 2017 without board approval, records show. He also paid bonuses worth nearly $60,000 to four employees, which exceeded “reasonable salary increases” approved by local boards, records show.

Federal auditors broke down the $4.3 million:

— Lacking documentation for people who received financial benefits: $2.4 million;

— Improper incentives payments to employees who created fake job placements: $1.3 million;

— Improper salaries for Peachey and top aides: $467,917;

— Payments to ineligible participants: $151, 822.

Earlier this month, the U.S. Department of Labor sent 20 pages of findings and the demand for repayment to Dane Eagle, the leader of the Florida Department of Economic Opportunity.

Along with DEO employees, dozens of federal staffers and outside auditing firms conducted the review for the Department of Labor.

Hillsborough County must repay $2.4 million.

Days ago, the Florida Department of Economic Opportunity told Pinellas County Commission Chair Charlie Justice that the county must pay nearly $1.9 million of the total misspending.

CFO Allyce Moriak told Justice that, if the county can’t pay the lump sum, it can select a repayment schedule not to exceed 36 months — but the debt will incur interest. The money must also come from local sources, not federal funds, records show.

Pinellas County Administrator Barry Burton said CareerSource set aside money from the sale of the former Science Center.

“It’s not unexpected,” Burton said. “They just didn’t know what it would be. The Commissioners planned for this.”

____

This story has been updated from the original.

Mark Puente

Mark Puente is a former investigative and crime reporter at the Tampa Bay Times, The Plain Dealer, The Baltimore Sun and Los Angeles Times. His reporting on CareerSource Pinellas and CareerSource Tampa Bay led to numerous firings and reforms of the agency. Puente was part of teams that were finalists for Pulitzer Prizes in 2016 and 2020. He is now a freelance writer and operates Puente's Tijuana Tacos, a mobile taco stand, in Cleveland.



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