A U.S. Labor Department probe of Workforce Central Florida is focused on possible "criminal conflict of interest" that may have tainted contracts awarded to companies owned by or tied to agency board members.
Board Chairman Lawrence Haber confirmed the nature of the investigation Tuesday, saying a Workforce attorney sent a letter notifying other board members about it earlier this week.
Haber said he has no reason to think that board members broke any laws. The letter to his colleagues, he said, was simply to let them know that the investigation was serious and not about minor federal rules.
Labor Department investigators will try to determine whether board members violated conflict-of-interest laws. The letter said such violations, if found, carry "potential criminal penalties." Those could include fines or even jail time for board members involved.
"It's a criminal statute," Haber said of the federal code section cited by a Labor Department investigator. "We just wanted our board to be aware of that."
The letter from agency attorney Charles "Skip" Sell also suggests that board members call their personal lawyer if they are contacted by federal investigators. Sell writes that he would like to attend those meetings but also cautions board members that he doesn't represent them.
Workforce Central Florida's "counsel represents WCF in this investigation but does not represent any individual Board Members, Officers, Staff or any other person or entity related to Board Members, Officers and Staff," Sell wrote. "If you have done business with WCF, documents regarding those transactions are available for inspection and copying by you and your attorney."
The letter highlights the potentially high-stakes nature of the Labor Department probe. Federal investigators are reviewing how Workforce Central Florida and 23 similar boards in the state awarded contracts in recent years to for-profit companies tied to agency board members.
From July 2008 to April 2010, the taxpayer-funded agencies handed out at least $7.7 million in such deals, according to a statewide survey done last year. In a separate review, the Orlando Sentinel found Workforce Central Florida paid companies tied to board members more than $1 million over six years.
In some instances, contracts were approved without competitive bids. In others, state auditors said it was not clear that board members who profited from the deals disclosed their interest and abstained from voting.
Many transactions were not approved by a two-thirds majority of the regional board, as required by Florida law at the time. And most that were — 80 percent -— received approval only after a contract had been executed.
Regional workforce executives have defended their agencies, insisting that board members' companies received no special treatment.
They said jobs were given to the lowest bidder that met an agency's needs. The regional boards receive about $250 million in federal money each year and are charged with improving the state's labor force, helping the unemployed find jobs and helping businesses find qualified workers.
Workforce Central Florida has already been served a subpoena, but Haber said he did not expect investigators to begin interviews until next month.
The Labor Department did not respond to an email requesting comment.
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