Consumer Fraud

Whistleblower complaint over D.C. school food program ends in $19-million settlement

whistleblower Whistleblower complaint over D.C. school food program ends in $19 million settlementA whistleblower complaint has resulted in a settlement between Washington D.C. and its largest public school food vendor, which agreed to pay $19 million to resolve claims it systematically overcharged the city and botched its management of school meal programs, resulting in shipments of food arriving late, in short supply, and often spoiled.

Jeffrey Mills, the former executive director of the D.C. school system’s Office of Food and Nutritional Services, sued Chartwells and Thompson Hospitality under the District’s False Claims Act, which is modeled after the federal False Claims Act and contains qui tam provisions that allow private citizens to sue on behalf of the District and share up to 30 percent of any recovery.

Mr. Mills claimed that Chartwells “knowingly submitted” invoices to the District for substandard food services and then billed the District for those services.

In 2008, Washington D.C. authorities contracted Chartwells and Thompson Hospitality, a division of the British multinational conglomerate Compass Group PLC, to replace in-house school food services, which had experienced “million dollar cost overruns.” Most school students in the D.C. public school system are poor and have to rely on the school lunch program.

The District privatized the school food program to save money and avoid future cost overruns, but Mr. Mills’ complaint alleges that instead of saving money, the District’s school food program “significantly increased” costs instead.

The contract between the District and Chartwells required Chartwells to provide quality food “at the lowest possible price.” Instead, Mr. Wells alleged, Chartwells used a corporate affiliate to buy food from “companies that manufacture highly processed foods and charge higher prices.”

In a statement issued Friday by his attorneys, Mr. Mills said, “I hope that my lawsuit against Chartwells and the settlement announced today will help improve the food programs for D.C.’s school children, which has always been my goal.

“The issue of private food vendors prioritizing profits over the well-being of students is a national concern,” Mr. Mills said. “I urge all school districts using private food vendors to examine their contracts and the performance of those vendors.”

According to the Washington Post, Chartwells has run afoul with schools in other parts of the country, “including a well-publicized boycott at a Connecticut high school last fall over the quality of the food the company provided.”

In 2012, Compass Group USA paid New York State $18 million to settle allegations that it overcharged more than three dozen school districts for the food services it provided.

Mr. Mills last year settled a retaliation lawsuit with the school system for $450,000. He alleged that he was fired after blowing the whistle on the District’s mismanagement of the food services contract.

Source: Washington Post