Skip to comments.Fraud case targets grants awarded by President Obama’s friend
Posted on 09/21/2011 1:58:28 PM PDT by NoLibZone
The indictment of a Chicago nurse accused of diverting hundreds of thousands of dollars in taxpayer funds for her personal use has turned a spotlight on an Illinois state agency that awarded her money while it was headed by one of President Barack Obamas closest friends, Dr. Eric E. Whitaker, records show.
Under Whitaker, the Illinois Department of Public Health awarded Margaret A. Davis the former program director of the Chicago Chapter of the National Black Nurses Association a no-bid contract and seven AIDS- and cancer-related grants that became part of her $500,000 cash-siphoning scheme, prosecutors say.
According to federal subpoenas and other records, Davis June 9 indictment by a federal grand jury in Springfield is part of a larger criminal investigation involving the health department and other state agencies.
Whitaker whos now a top executive at the University of Chicago Medical Center has not been accused of any wrongdoing. He says he couldnt have known about the problems the Davis indictment describes and that he and his staff acted quickly when they became aware of problems with other contractors.
Since 2009 and as recently as March, federal authorities have sent the health department a total of four subpoenas seeking information on a broad range of faith-based initiatives and health-outreach programs that Whitaker oversaw. Those subpoenas name seven organizations including Davis National Black Nurses Association which, in all, got more than $2 million under Whitaker.
The Illinois attorney generals office is suing to recover $523,546 in allegedly misspent money from one of those organizations: the Lets Talk, Lets Test Foundation, a now-defunct AIDS awareness group.
Whitaker who was hired by then-Gov. Rod Blagojevich in 2003 on Obamas recommendation publicly surfaced in the federal investigation in May 2010, when the Chicago Sun-Times reported that he, former chief of staff Quinshaunta Golden and two other Blagojevich administration officials Deputy Gov. Louanner Peters and Whitakers successor at the health department, Dr. Damon Arnold had been named in a subpoena seeking their state-government e-mails and other electronic records since January 2007. None has been charged with any crime.
Whitaker, 46, left state government in October 2007 to work alongside future first lady Michelle Obama at the University of Chicago Medical Center, where hes now executive vice president for strategic affiliations and associate dean for community-based research a job that paid him $670,833 in 2009.
During the 2008 presidential campaign, Whitaker frequently traveled with Obama, and he remains part of the presidents inner circle. He vacationed with the president in Marthas Vineyard late last month and attended three White House parties earlier this year.
After the Sun-Times reported last year that Whitakers name had surfaced in the federal investigation, he told reporters: The organizations the subpoenas were about they received funding in the last month of my tenure at the Illinois Department of Public Health, and the Sun-Times framed it as if I was in the center of a lot of things. I would say thats inaccurate.
But Davis indictment and other records show that Whitakers department had given money to those groups long before then.
Now, asked about that discrepancy and about the Davis case, Whitaker e-mailed a statement acknowledging confusion related to statements I have made in the past.
Let me be clear: In the course of administering some 8,000 grants related to approximately 240 public health programs, there was a handful that fell short. When I and my team were aware of problems, we acted swiftly. . . . In some cases, we couldnt have known about transgressions such as the alleged embezzlement related to a contract with the Chicago Chapter of the National Black Nurses Association.
Marj Halperin, a spokeswoman for Whitaker, said he hasnt been subpoenaed personally, nor has he hired a lawyer to represent him regarding the investigation because theres been no reason for him to do so.
Davis, 60, is scheduled to go on trial in federal court in Springfield on Dec. 6 on a 16-count mail-fraud and money-laundering indictment. A co-defendant, Tonja Cook, 44, is charged with one count of mail fraud.
According to their indictment, Davis used her roles with the National Black Nurses Association and two other health-care groups to obtain 15 state grants and contracts totaling more than $1 million between December 2005 and March 2009. She allegedly siphoned off $500,000 of that for personal use.
Of the taxpayer money, $577,473 came from the health department under Whitaker and Arnold, and $460,000 came from the state Department of Commerce and Economic Opportunity, then headed by Jack Lavin, whos now Gov. Pat Quinns chief of staff.
Davis once won praise from Whitaker, who called her the ultimate advocate for health care and human services when Blagojevich honored her with a governors PATH (People Are Todays Heroes) Award in January 2007. Her energy and commitment amaze me.
According to prosecutors, Davis got seven state grants totaling $195,000 between December 2005 and June 2007 while Whitaker headed the health department. In December 2007, two months after Whitaker left the department, Davis got another $150,000 through Ticket for the Cure, a breast-cancer awareness program that Whitaker created.
Besides the grants, Whitakers chief of staff, Golden, signed Whitakers name to a June 2007 no-bid contract under which Davis hired college nursing students to receive education, training and experience in the administrative process related to a 2006 state law requiring health department staffers to perform criminal-background checks on residents of Illinois nursing homes.
That contract was falsely represented as a professional and artistic service contract when, in fact . . . the services performed by the students were clerical in nature, according to the indictment.
Prosecutors say that misrepresenting what the students would do meant that the contract wouldnt have to be awarded through competitive bidding.
According to the indictment, Davis diverted in excess of $11,000 obtained under that contract. Unbeknownst to state officials, she also hired her granddaughter and her granddaughters half-sister to work as nursing interns.
Golden, who is a niece of U.S. Rep. Danny Davis (D-Ill.), is now a top aide to Whitaker at the U. of C. Medical Center, where she made $311,407 in 2009. She declined to be interviewed, as did lawyers for Cook and Margaret Davis, who is no relation to Danny Davis.
Halperin, Whitakers spokeswoman, said the nursing contract was part of a Blagojevich administration effort to ease a statewide nursing shortage, and that Davis interns did bona fide work under the supervision of health department employees.
Halperin said prosecutors are interpreting the definition of professional and artistic services too narrowly. Administrative work is part of work related to the nursing field, she said.
Whitaker said the handful of problems that we addressed and continued to monitor right through to the end of our tenure shouldnt define his time in state government.
Im proud of our success in many public health areas, including our programs to combat HIV in the African-American community, which accounted for more than half of new HIV/AIDS cases at the time I took office, he said.
Thanks, in part, to the investment made through our community-based partnerships, we did see a drop in the number of reported HIV cases.
Contributing: Abdon M. Pallasch
Corruption is close to Obama as stink on a skunk or black on mold.
Obama and Dr. Eric E. Whitaker
This Whitaker guy is the same guy who lied about spending personal money on the pimped-out red Hummer for the AIDs charity in Chicago, isn't he? The article was on FR yesterday. It was another case of fraud using charitable foundation funds.
I did a quick search of headlines and haven't found it, but I'll keep looking.
Same Obama buddy.
"After first insisting otherwise, Whitaker aides ultimately concluded that the organizations director had lied when he said he used his own money to buy the Hummer when, in fact, taxpayers had footed the bill, according to e-mails obtained under the Illinois Freedom of Information Act."
"Still, Whitakers agency allowed the group called Working for Togetherness to keep the Hummer and reimburse the state for only half its cost. The health department also let the organization continue to get state business, according to records that have since become part of a broader federal investigation, out of Springfield, into allegations of fraud involving state grants."
"The 2003 Hummer which Working for Togetherness bought used in July 2004 included elements of Ghetto Fabulous and/or Hip Hop Bling culture, including game consoles, custom sound, television, DVD, public address, custom paints and tire rims, and other exterior and interior amenities to appeal to those at highest risk for HIV infection, according to a memo from Whitakers e-mail inbox."
Thanks for posting. I never knew there was a National Black Nurses Association.
Or that it was tied into the Chicago Way...
My, my - it appears that ole Doc Whitaker’s been a busy boy. I wonder how much his cut was in each of these cases and if he had to kick up direct to Obama or if he got to wet the beak of either Rahm or Axelrod.
every inch of this guy called our president stinks to high heaven. of course we smelled his poison long before they voted him their party favorite. sadly. they didn’t listen.
Half a billion here, half a million there-—hey, it’s only the taxpayers money. Too bad the wealthy don’t pay more so that more of these flustercucks can’t be better funded.
I’ll go one further, it oozes, exudes, eminates from every pore of his being and damn near everyone he has EVER had a relationship with.
Bernie Madoff was an out and out AMATEUR compared to this charlatan.
And we probably know of maybe 20% if that of all the dirty, shady, crooked, fraudulent, dealings he has EVER been a part of.
Unkus expressed worry about him becoming a martyr ? Not me.
Good scouting, Scout.
Thanks. Thanks. Excellent article by Chris Fusco, Dave McKinney and Abdon M. Pallasch. BUMP-TO-THE-TOP!
They amaze me too, Rod. Stealing is hard work.