Food Vendor to Pay $19M to Settle Whistleblower Lawsuit
The largest food vendor for the Washington DC public schools has agreed to a $19 million settlement in a lawsuit alleging the company overcharged the city and mismanaged the school meals programs.
A whistleblower lawsuit was filed by a former director of food services for DC Public Schools against Chartwells and Thompson Hospitality, which provided food services for public schools in the District starting in 2008. The suit alleged that food often arrived at late and was spoiled or in short supply, the Washington Post reports.
Washington DC Attorney General Karl A. Racine said, “Chartwells has quite reasonably acknowledged and addressed mistakes it made in administering the contract to provide food and food services to DCPS.” Racine said contractors who receive District funds must be “held accountable for fulfilling their obligations under the contracts, and today’s settlement does just that,” according to the Post.
Jeffrey Mills, who brought the lawsuit, was executive director of the school system’s Office of Food and Nutritional Services from 2010 until he was fired in early 2013. Mills was fired from his job after he reported mismanagement, fraud, and overfiling by one of the school system’s largest contractors, according to the Post. Mills reached a $450,000 settlement in a separate lawsuit with the school system in which he alleged he was terminated for raising red flags about the food service contract.
The Post reports that the settlement did not determine the validity of the original claims and it does not represent an admission of fact or liability by Chartwells. Owen Donnelly, a Chartwells spokesman, said the company “denies any wrongdoing and has agreed to resolve the issues so that focus continues to be on nourishing the bodies, minds and spirits of students to pave the way for a lifetime of success and well-being.” Donnelly said the underlying issues related to cost overruns, but said, “In our seven years at D.C. Public Schools, we have significantly increased the quality of food service while saving the District millions of dollars.” The complaint from the Office of the Attorney General claimed that Chartwells “knowingly submitted” false invoices that the school system paid.
In 2008, Chartwells entered into a contract to provide food services that the District had formerly provided in-house. The school meals program is essential because many students in the District come from poor families and rely on the school nutrition program for meals. By privatizing food service, the school district hoped to save money and improve the nutritional quality of meals, according to the Post. Though concerns had been raised, the contract was re-signed in 2012.
Under the whistleblower—“qui tam”—provisions of the D.C. False Claims Act, a private citizen like Jeffrey Mills can bring a lawsuit on behalf of the government and share in any funds that are recovered. The amount Mills will receive has not yet been determined, but he could receive up to 30 percent of the settlement, according to the Post. Most of the settlement will go to the District to pay back the amount they were overcharged.
