Major refugee resettlement agency in meltdown?

Sure sounds like it! 

We reported here that we had heard rumblings, but Breitbart News yesterday has all the gory details from a reliable source close to the organization—Lutheran Immigration and Refugee Service—headquartered in Baltimore, MD.

Read the bombshell story by Michael Patrick Leahy here.

‘Source: Claims of Financial Mismanagement, Fraud, and Harassment at Lutheran Immigration and Refugee Service Spark External Investigation’

My questions include:

~Will Trump’s federal government suspend LIRS (96% funded by taxpayer dollars) until the truth is learned?

~Will Congress have the energy and the guts to take a look at this?

~And, could this be the tip of the iceberg—is LIRS a one-off or could others of the nine federal contractors  have gotten loosey-goosey with their finances too?

After all when you are ‘doing good’ who would have the audacity to question how you handle free federal money, right?

~And, here is another: If proven true, what impact do these allegations have on LIRS subcontractors (aka affiliates)?

Just to remind longtime readers and for new readers arriving here today, there are nine organizations (supposedly non-profits)*** almost completely funded with US taxpayer dollars which distribute federal money to hundreds of subcontractors working in towns and cities across America where refugees are being placed.

Lutheran Immigration and Refugee Service is the parent organization to the offices listed below. So whatever happens in Baltimore could have a direct impact on these local “affiliates.”

For example, LSS-MN does not act independently of the Baltimore ‘mothership’ when it comes to resettling refugees. It is the Baltimore office that sends them cases and the money that comes along with the refugees.  Federal taxpayer dollars simply flow through LIRS headquarters to these subcontractors.  (At the heart of the allegations about federal grant funds is the issue of how much headquarters keeps of the millions of dollars it passes through.)

LIRS affiliates could see an impact if the allegations of financial wrong doing are significant enough for the federal agency (HHS in this case) to issue a ‘stop work order.’

Arkansas
Canopy of Northwest Arkansas, Fayetteville

Arizona
Refugee Focus, Phoenix, Tuscon

California
Interfaith Refugee and Immigration Service, Los Angeles

Colorado
Lutheran Family Services Rocky Mountains, Denver, Colorado Springs, Greeley

Florida
Lutheran Social Services of Northeast Florida, Jacksonville
Lutheran Services Florida, Miami, Orlando, Tampa

Georgia
Lutheran Services of Georgia, Atlanta, Savannah

Illinois
RefugeeOne, Chicago

Maryland
Lutheran Social Services of the National Capital Area, Hyattsville

Massachusetts
Ascentria Community Services, Westfield, Worcester

Michigan
Samaritas, Ann Arbor, Battle Creek, Grand Rapids, Troy

Minnesota
Lutheran Social Service of Minnesota, Minneapolis, St. Cloud

Nebraska
Lutheran Family Services of Nebraska, Omaha

New Hampshire
Ascentria Community Services, Concord

New Mexico
Lutheran Family Services Rocky Mountains, Albuquerque, Santa Fe

New York
Mohawk Valley Resource Center for Refugees, Utica

North Carolina
Lutheran Services Carolinas, Raleigh

North Dakota
Lutheran Social Services of North Dakota—Center for New Americans, Bismarck, Fargo, Grand Forks

Oregon
Lutheran Community Services Northwest, Portland

Pennsylvania
Bethany Christian Services, Allentown, Lancaster, Philadelphia

South Carolina
Lutheran Services Carolinas, Columbia, Charleston

South Dakota
Lutheran Social Services of South Dakota, Sioux Falls

Texas
Refugee Services of Texas, Dallas, Fort Worth, Amarillo, Houston

Virginia
Lutheran Social Services of the National Capital Area, Falls Church

Washington
Lutheran Community Services Northwest, Tacoma, Vancouver

Wisconsin
Lutheran Social Services of Wisconsin and Upper Michigan, Madison, Milwaukee

When you read Breitbart’s investigative piece you might not have much concern for the internal personnel machinations/squabbles/bullying/firings/ etc, but like me, you might find anything that suggests the misuse of your tax dollars compelling. Pistachio nuts! (you will have to read Leahy’s piece to see what that means!)

Here is one bit of the detailed report from a source to Breitbart (source refers to LIRS as LIaRS):

Over the six year period from 2011 through 2016, LIaRS revenue from the U.S. government grew from $30 million to almost $65 million. During that time, under CEO Hartke’s oversight, the headquarter’s spending exploded from $8.8 million to $13.5 million with a staff of less than 100. Hartke’s salary also jumped from $182,270 to more than $293,000 last year (note this does not include her 9 percemt employer retirement plan contribution, 100% employer paid health care, and paid time off).

Given that USG revenue accounts for almost 95 cents of every LIaRS dollar, the only way Hartke could continue to spend on herself and the headquarters is through charging the USG an indirect cost recovery rate on the entire amount of their grants, even though 90 percent of the funds were simply passed through to subawards to the dozens of independent affiliates that actually do the refugee resettlement work (i.e. Lutheran Family Services Rocky Mountains, RefugeeOne of Chicago, Mohawk Valley Resource Center for Refugees, etc.).

This is direct contradiction to the Code of Federal Regulations which only allows the ICR to be charged on the first $25,000 of each subaward. LIaRS charges it on all the money, thereby giving them millions of dollars per year to fund their headquarters for doing nothing. As an example, in 2016 of the $54 million in government funds received by LIaRS, more than $55 million was sent out in subawards to the independent affiliates to do the actual resettlement work … but LIaRS managed to charge the government the ICR rate of over 10 percent on that $55 million which brings over $5 million to be kept in Baltimore for Hartke and her office.

If I may be so bold as to tell the Inspector General at Health and Human Services what to do….

….it would be prudent for the IG to issue a Stop Work Order.

If the allegations of inflating direct costs are true and the commensurate lack of internal controls are found, LIRS financial practices raise serious questions about their ability to function as a federal resettlement agency (receiving millions of dollars appropriated by Congress!) at least until this mess is cleared up.

So what can you do?

Tell Donald Trump to suspend LIRS while the investigation continues.

And….

After reading the Breitbart expose’ you know that LIRS Board of Directors has launched an internal investigation in addition to whatever the federal government is doing.

See the Board members here and below.  If you are of the Lutheran faith you need to have a word with anyone of them you know plus speak up to your local pastors!

From LIRS website:

See my complete archive on LIRS here.

***These are the nine federal contractors receiving millions of tax payer dollars annually. Could any of the others not be following federal grant reporting rules?  Come on Congress, time to get serious about reviewing the UN/US Refugee Admissions Program and how the contractors are spending our money!