A Maximus Postscript

Hidden Conflicts of Rudy's Welfare Team

Angela Turner still operates the Center for Self Sufficiency but she declined to discuss her work. "I have never received funds from Maximus," she said. "All of that [regarding the report] is completely inaccurate. At this point in time I am not prepared to go into detail. This whole matter has been closed for some time."

After former Wisconsin governor Tommy Thompson was named secretary of Health and Human Services by President Bush, there was expectation in Washington that Jason Turner would join him there in a top post. Turner had overseen welfare programs for Thompson, and his accomplishments had been heralded nationally. The appointment never came, however, and according to federal sources the Maximus controversy was part of the problem.

Turner is now a fellow at the Heritage Foundation, a conservative think tank, dealing with welfare policies. But he declined to return numerous calls to his office and messages left with his wife.

Rudy Giuliani briefly discussed the many ethics scrapes that erupted around Turner in his book, Leadership. In a section titled, "Embrace Those Who Are Attacked," Giuliani wrote, "Jason was the victim of those overly eager to find something to drive him out of city government."

The only allegation against Turner that ever stuck, the former mayor said, was a finding against him by the city's Conflicts of Interest Board. The panel found that Turner had violated city rules by renting an apartment from a subordinate and using city time and equipment for his own outside consulting work. Turner paid a $6,500 fine. His top aide, Mark Hoover, who had bought several Long Island City apartments and then rented rooms to Turner and several other HRA aides whom Turner had imported from Wisconsin, was hit with an $8,500 penalty, the largest fine the board had ever imposed.

Those problems also never registered with Giuliani. "I decided that Jason had done nothing essentially wrong," he wrote.

There was one other postscript to the Maximus controversy, also buried in a little-noticed report. In a report filed with the Securities Exchange Commission last year, Maximus stated that it had acquired Richard Schwartz's company, Opportunity America. The firm paid $780,000 for the company, booking 90 percent of that cost to "intangible assets" and "goodwill."

Schwartz, today the editor of the Daily News' editorial page, said the sale had been handled by others, and that it was a simple business transaction, not a reflection of any special treatment for him by Maximus.

"I know to you that sounds like a lot of money, and it is, but this is not that kind of deal. It is a moderate deal," he said.

Schwartz said he had no clear recollection of the contract problems detailed in the earlier DOI report, the one circulated by Hevesi during the 2001 mayoral campaign.

The press focus at the time was on the Hevesi-Giuliani war of words, and the report was just a one-day story leaving no room for details about other issues raised by DOI. The agency found that while Schwartz's Opportunity America and a co-venture partner, the New York City Partnership, were performing a $2.4 million work preparedness contract for needy New Yorkers, they had failed to supply required job training. Moreover, the report stated, "The vendor failed to provide HRA with information about this matter for about two months." When the partners finally did arrange job training, it was for only one day a week, not the required two days. As a result, the contract was cut "by over one million dollars and these funds redistributed to other HRA projects."

Again, DOI stressed that it did not uncover "any evidence of criminality" in the matter or in other complaints it received regarding Schwartz's company. But it rapped his firm for providing "misleading information" and noted that there were "similar problems" found in another Opportunity America/Partnership grant from the federal Department of Labor, adding: "DOI advised HRA to closely monitor Opportunity America/NYCP's performance under the federal grant to ensure that the vendor fulfilled its commitments."

"I don't really have a complete recollection of that project and that situation," said Schwartz in a telephone interview last week. "We did scores of projects in this area. This DOI report was obviously written by design to question everything about my company and the issue with Jason. They were looking for anything negative. There were no actions taken against me. Not every project goes perfectly."

Schwartz, who served as Giuliani's welfare expert during the mayor's first term, left the administration in February 1997. He said he first dealt with Turner some months later when city officials in San Francisco, where he was seeking work, urged him to team up with Turner to put together a welfare initiative. The pair worked on that project, and later, a few months before Turner became New York City's welfare commissioner, Schwartz listed him as a consultant on a proposal to HRA.

When Turner's name surfaced as a potential city welfare commissioner, Schwartz said he was asked by City Hall officials to provide a reference for him. Schwartz refused to give details, but said he wasn't the first to recommend his business associate to Giuliani. "They didn't need me, [Turner] was on the front page of The New York Times Sunday magazine," said Schwartz.

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