Four indicted in CIETC scandal

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By Charlotte Eby | Wednesday, January 17, 2007 1:13 AM CST | () comments

THE ASSOCIATED PRESS U.S. Attorney Matthew Whitaker speaks during a news conference after a federal grand jury returned a 27-count indictment against four people in a Des Moines area job training agency pay scandal.

DES MOINES — Four leading figures in a salary scandal at a job training agency are facing federal charges after a grand jury in Des Moines issued a 27-count indictment accusing them of a widespread conspiracy to pad employee paychecks.

U.S. Attorney Matthew Whitaker announced the charges in a news conference Tuesday but emphasized that the investigation was

continuing into what happened at the Central Iowa Employment and Training Consortium, or CIETC.

Three of those charged in the indictment included officials at the Des Moines jobs agency who are accused of taking excess salary and bonus payments of more than $2 million from 2003 to 2006.

“This is an ongoing investigation,” Whitaker said. “And we expect if these individuals decide to cooperate with the investigation that could open up avenues for further investigation.”

Those named in the indictment included former CIETC CEO Ramona  Cunningham, who is accused of making pleas for  additional government funds under misleading pretenses. The agency is funded largely with federal dollars.

The others charged include former Chief Operating           Officer John Bargman and former accountant Karen Tesdell, who also are accused of receiving excessive salaries and bonuses.

Former CIETC board chairman Archie Brooks Jr., who signed off on the salaries, is also named in the indictment. Brooks, who had been a          longtime member of the Des Moines City Council, stepped down from the office after the scandal broke.

Brooks is not accused of directly receiving money, but the indictment alleges he knew Cunningham was committing fraud and approved salaries anyway.

The grand jury’s indictment, issued Friday, detailed a conspiracy by the four defendants to defraud the federal government of job training funds provided by the Workforce Investment Act.

The investigation started after a whistleblower tipped off State Auditor David Vaudt into excessive salaries at CIETC, where salary and bonus packages for top officials topped $360,000 a year.

Bargman appeared in court Tuesday to plead guilty to conspiracy and fraud charges after arranging a deal with prosecutors. Bargman will face a possible sentence of 37 to 46 months in prison when he is sentenced and could be ordered to pay restitution of up to $400,000. Prosecutors say they will ask a judge to reduce the sentence if Bargman cooperates with the investigation.

A summons to appear in U.S. District Court in Des Moines on Jan. 25 was issued for the three other defendants.

The charges included the following:

— Cunningham, 52, now of Farmerville, La., is charged with conspiracy, nine counts of fraud or misapplication of federal Workforce Investment funds, 16 counts of fraud or misapplication of federal program funds and one count of obstruction of investigation. If convicted, she could face 10 years prison.

— Tesdell, 67, of Manson, is facing one count of conspiracy, nine counts of fraud or misapplication of federal Workforce Investment funds and 16 counts of fraud or misapplication of federal funds. She is facing a possible 10 years in prison if convicted.

— Brooks, 57, of Des Moines, is charged with one count of conspiracy, nine counts of fraud or misapplication of federal Workforce Investment funds and nine counts of fraud or misappropriation of federal program funds. He faces possible 10 years in prison.

Also charged was Jane Barto, former deputy director of the Iowa Workforce Development agency. Barto, 52, is facing one count of conspiracy and one count of obstruction of an investigation. She faces a maximum one year in prison. The Workforce Development agency had been responsible for overseeing spending at CIETC. The indictment alleges she and Cunningham tried to obstruct a 2005 investigation into CIETC salaries.

Besides the excessive salaries, Cunningham is accused of having CIETC employees work on gardening, landscaping and home improvement projects at her own home while they were being paid by CIETC. Other alleged misuses of funds included allowing CIETC employees to travel to casinos and attend card games while on the job. And some CIETC employees were allowed extended absences while they were still being paid, according to the indictment.

State Rep. Cindy Winckler, D-Davenport, attended Tuesday’s news conference to see the result of months of investigation. Winckler had sat on the Legislature’s Government Oversight Committee while it held extensive hearings on the CIETC matter last year.

She wants to see that those who are charged have to pay back the money they are accused of stealing.

“It’s one of those situations where I truly believe they knew what they were doing and knew that they shouldn’t be doing what they were doing, or they wouldn’t be so careful in hiding everything,” Winckler said.

Charlotte Eby can be reached at (515) 243-0138 or chareby@aol.com.