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Who We Are »
Betsy Combier

Help Us to Continue to Help Others »
Email: betsy.combier@gmail.com

 
The E-Accountability Foundation announces the

'A for Accountability' Award

to those who are willing to whistleblow unjust, misleading, or false actions and claims of the politico-educational complex in order to bring about educational reform in favor of children of all races, intellectual ability and economic status. They ask questions that need to be asked, such as "where is the money?" and "Why does it have to be this way?" and they never give up. These people have withstood adversity and have held those who seem not to believe in honesty, integrity and compassion accountable for their actions. The winners of our "A" work to expose wrong-doing not for themselves, but for others - total strangers - for the "Greater Good"of the community and, by their actions, exemplify courage and self-less passion. They are parent advocates. We salute you.

Winners of the "A":

Johnnie Mae Allen
David Possner
Dee Alpert
Aaron Carr
Harris Lirtzman
Hipolito Colon
Larry Fisher
The Giraffe Project and Giraffe Heroes' Program
Jimmy Kilpatrick and George Scott
Zach Kopplin
Matthew LaClair
Wangari Maathai
Erich Martel
Steve Orel, in memoriam, Interversity, and The World of Opportunity
Marla Ruzicka, in Memoriam
Nancy Swan
Bob Witanek
Peyton Wolcott
[ More Details » ]
 
Halfway Houses Prove Lucrative to Those at Top: The Kintock Group and Their New Jersey Halfway Houses
The Kintock Group, the second-largest operator of halfway houses in New Jersey, is a nonprofit agency that is financed almost entirely by government contracts. But it is run like a well-heeled family business. Kintock paid its founder, David D. Fawkner, roughly $7 million in salary and benefits over the past decade, according to federal disclosure records. Mr. Fawkner’s daughter, brother-in-law and son-in-law altogether received more than $2.5 million during that period, the records show. The nonprofit agency hired the brother-in-law as a consultant even though he has no corrections experience and lives in California. And it employed the son-in-law to run a subsidiary unrelated to its mission: duplicating DVDs and other electronic media.
          
   David Fawkner   
December 29, 2012
Halfway Houses Prove Lucrative to Those at Top
By SAM DOLNICK
LINK


The Kintock Group, the second-largest operator of halfway houses in New Jersey, is a nonprofit agency that is financed almost entirely by government contracts. But it is run like a well-heeled family business.

Kintock paid its founder, David D. Fawkner, roughly $7 million in salary and benefits over the past decade, according to federal disclosure records. Mr. Fawkner’s daughter, brother-in-law and son-in-law altogether received more than $2.5 million during that period, the records show.

The nonprofit agency hired the brother-in-law as a consultant even though he has no corrections experience and lives in California. And it employed the son-in-law to run a subsidiary unrelated to its mission: duplicating DVDs and other electronic media.

New Jersey has disbursed more than half a billion dollars to nonprofit groups over the past decade to run halfway houses, which handle thousands of state and county inmates annually. But regulators have often failed to scrutinize how that money has been spent, especially by the two nonprofit groups that run most of the facilities in the state, according to an examination by The New York Times.

One is Kintock, which said in a statement that there was nothing improper about the jobs held by members of the Fawkner family.

The other is Education and Health Centers of America, which is essentially a shell organization whose purpose is to funnel money to Community Education Centers, the politically connected company that dominates the halfway-house system, according to interviews and government records.

Now, as lawmakers in Trenton call for more oversight of the halfway-house system, they are considering measures to regulate these nonprofit groups more closely. The measures would require the groups to disclose far more information about their finances, executives and subcontractors.

Under New Jersey law, only nonprofit groups can obtain halfway-house contracts. Private companies are barred from the system. Experts praise the halfway-house model as a potentially important tool to help inmates make the return to society. But the system in New Jersey has long been troubled. The Times, in a series of articles this year, has described escapes, violence, gang activity, drug use and other problems at the halfway houses.

The system in New Jersey once included many mom-and-pop outfits that ran neighborhood-based facilities. But in recent years, the state has winnowed the number of operators, and the two nonprofit groups now receive about 85 percent of the halfway-house budget.

The State Corrections Department said it had examined the financial practices of the nonprofit groups. In a statement, the department said it “ensures that the services are delivered through operational oversight, and that financial audits are performed.” It added: “Through these processes, the interests of the state are protected.”

Mr. Fawkner, a former probation and parole officer, founded the Kintock Group in 1985. It is based in King of Prussia, Pa., but has most of its operations in New Jersey, where it runs five halfway houses.

Kintock had revenues of $39 million in 2010, its most recent disclosure forms to the Internal Revenue Service show.

Mr. Fawkner received an annual salary and benefits as high as $805,000 in recent years, according to the records. He stepped down as chief executive in 2010 to become executive chairman, and now receives a salary of $250,000, Kintock said. It said his salary was “reflective of the marketplace we compete in.”

Mr. Fawkner’s brother-in-law, Raymond P. Guzicki, has been a consultant to Kintock for 11 years, and was paid $130,000 in 2010. Mr. Guzicki, who lives in Northern California, said in an interview that he did site surveys, property assessment and training for Kintock. But he could not recall how many times he had traveled to New Jersey for the work.

“I happened to visit my brother-in-law and he asked me, ‘Can you furnish some of these services?’ ” he said. “I said, ‘Sure, I can.’ I’m not going to turn down business, I don’t care who it is.”

Kintock said Mr. Guzicki had 26 years of experience in the “facilities management industry.”

Mr. Fawkner’s daughter, Gretchen Wiseman, is Kintock’s chief administrative officer, and was paid $180,000 in 2010, according to disclosure records. For several years, her husband, Robert Wiseman, ran a Kintock subsidiary called Media Concepts, which duplicated DVDs and other media. He was paid $93,500 annually, records show.

Kintock said it had acquired the business as part of a purchase of a building in Philadelphia, where it runs one of its programs. Kintock said it closed Media Concepts at the end of 2011.

“The company does not preclude family members from consideration for appropriate employment opportunities,” Kintock said. “But they must have the necessary qualifications.”

The statement added: “The Kintock Group has grown because of our proprietary and proven approaches, the results we achieve and our never-ending efforts to improve. It is our hope that any coverage of the Kintock Group will include this essential context.”

Valyrie K. Laedlein, co-director of Community Resource Exchange, a nonprofit consulting firm in New York, called Mr. Fawkner’s salary “way beyond the pale.” She said the jobs of the Fawkner family members also seemed inappropriate.

“It would raise questions to my mind that would then warrant further investigation,” Ms. Laedlein said.

The other major nonprofit operator, Education and Health Centers of America, works out of a low-rise office complex in Wall Township, N.J., down the hall from a cosmetic surgeon’s practice. State officials acknowledge that Education and Health Centers is essentially a nonprofit arm of Community Education Centers.

Both are controlled by John J. Clancy, Community Education’s chief executive, who has close ties to politicians of both parties in New Jersey, including Gov. Chris Christie. Under a longstanding arrangement, Education and Health Centers obtains contracts and pays Community Education to run the halfway houses.

In an audit last year, the state comptroller, Matthew Boxer, said the relationship between the company and the nonprofit group was problematic because it prevented the state from evaluating the financial health of the vendor actually providing the services.

Mr. Boxer noted that when the state attorney general approved the arrangement in the 1990s, Education and Health Centers had $3 million in state corrections contracts. Now, it has roughly $35 million in contracts.

Education and Health Centers said it disagreed with the comptroller.

“Government agencies have examined the relationship between E.H.C.A. and C.E.C., as have several attorneys general under both Democratic and Republican governors,” said a spokesman for the nonprofit group, Eric Shuffler. “It is compliant with all legal and regulatory requirements.”

At a legislative hearing over the summer, the corrections commissioner, Gary M. Lanigan, said he was not concerned about Education and Health Centers’ status.

“The auditors did the original review of the vendor, and there were no financial questions raised at that time,” Mr. Lanigan said.

Democratic legislators were not convinced.

“This, which we know about right now, smells to high heaven,” said Assemblywoman Bonnie Watson Coleman, Democrat of Mercer County.

Whatever the state’s opinion, Education and Health Centers’ role could violate federal regulations, said Prof. Frances R. Hill, a tax specialist at the University of Miami School of Law.

She said the Internal Revenue Service had cracked down on nonprofit groups with tax-exempt status whose goal is to direct money to profit-making companies.

“The I.R.S. should revoke the exempt status,” Professor Hill said. “It appears to run afoul of I.R.S. rules, because it essentially does no work and funnels the contract to the for-profit entity.”

The arrangement has also been beneficial to Community Education executives, who have sometimes drawn a second salary from Education and Health Centers, according to disclosure records. The nonprofit group has paid Mr. Clancy $1.3 million since 2005, the records show. William J. Palatucci, a political adviser to Mr. Christie who was a senior executive at Community Education until last month, earned $416,000 from the nonprofit group during that time.

Education and Health Centers also has an eclectic board of directors that includes a video conference salesman and an accountant in Atlanta.

Among the others are Arthur Lobbe, 63, a former lawyer who was disbarred in New Jersey for gambling his clients’ money, records show. Mr. Lobbe worked for the New Jersey Parole Board from 1984 to 1990.

In an interview, he said he had retired to Florida, where he was focused more on selling baseball memorabilia than on halfway houses.

“Am I the most qualified person in the world to hold this position? Probably not,” he said. “I’m sure there are people more qualified than myself. But have we been effective? I believe so.”


Sheelagh McNeill contributed reporting.

 
© 2003 The E-Accountability Foundation