Five people have been charged in connection with an executive pay scandal at a now-defunct central Iowa job training agency — and one of the five has agreed to a plea agreement to provide information on the other four. The U.S. Attorney for Iowa’s southern district, Matt Whitaker, announced the indictments Tuesday.
Whitaker says summons have been issued for each of the four to appear in court on January 27th. In addition, Whitaker says 58-year-old John Bargman, the chief operating officer of CIETC, has already pleaded guilty to defrauding the government and trying to cover it up, and Bargman has agreed to testify against the others. Bargman agreed to spend between 37 and 46 months in prison and pay restitution not to exceed 400-thousand dollars.
The others indicted are: 52-year-old Ramona Cunningham, the former CEO of the Central Iowa Employment Training Consortium (CIETC); 67-year-old Karen Tesdell, CIETC’s former chief accountant, 52-year-old Jane Barto, former Deputy Director of Iowa Workforce Development, and 57-year-old Archie Brooks, a Des Moines City Councilman who was chairman of the board that oversaw CIETC and who resigned after the scandal broke. Whitaker says the five are charged with misappropriating federal funds for job training to be used for their own excessive salaries.
Whitaker was asked to comment on what the indictments indicate about the operation of CIETC. Whitaker says these are merely allegations and the individuals are innocent until proven guilty. Whitaker says the information alleges the individuals misappropriated federal funds that were meant to help the less fortunate in our society and they now face federal charges. Whitaker was asked what led to the conspiracy counts.
Whitaker says on or about November of 2005 Barto, Cunningham and others "willfully endeavored to instruct or impede and investigation or inquiry pursuant to the workforce investment act and regulations there under. Attempting to influence I-W-D and the U.S. Department of Labor officials to discontinue inquiry compensation paid defendants Cunningham, Tesdell and others by CIETC."
Whitaker was asked to be more specific about how the funds were misused, and again read from the indictment. Among other abuses, Whitaker says the investigation found Ramona Cunningham had people on the CIETC payroll to work on her home and work on the landscaping her property. In addition, Cunningham allowed CIETC employees to gamble while they were on the job. Whitaker says they also allege that CIETC employees were also allowed to play cards and take extended absences while being paid.
Whitaker vows to try to recover all the money that was misspent — but isn’t sure how much money they can get back. A state audit released last April found the three top executives at CIETC were paid one-point-eight million dollars in salaries and bonuses over a 30-month period. Whitaker says the court will ultimately set a restitution in that amount, but says it’s hard to tell how much money they will be able to recover.
While Bargman has already appeared in court, Whitaker says the remaining four will be required to report at the time given on the summons to be processed. Whitaker says in these types of cases they would not expect the four to be detained until the trial. Ramona Cunningham now lives in Farmerville, Louisiana, Barto in Carroll, Tesdell in Manson and Brooks in Des Moines. Whitaker was asked about the victims in this case.
Whitaker says the victims are the taxpayers of America, and the taxpayers of Polk and other counties. Whitaker says the investigation is ongoing, and says he will not comment on whether he expects other arrests.
Audio: U.S. Attorney Matt Whitaker CIIETC announcement 17:25 MP3