Originally created 03/07/03

Investigators question agency procedures for project



COLUMBIA, S.C. -- Juvenile Justice Department officials failed to follow procedures when they provided documents to a group that wants to build a $47 million youth home in Fairfield County, Senate investigators say.

Rosewood Youth Development Academy wants to build the home and used a letter from the Juvenile Justice Department to help it obtain a $437,000 loan of federal money through the city of Columbia to start the project, The (Columbia) State reported Thursday.

DJJ violated procurement rules because it promised to send youths to the facility without following the state's bidding process for contracts, an investigation by the Senate Corrections and Penology Committee shows.

The actions at DJJ were "puzzling" and "suspicious," said Sen. Mike Fair, R-Greenville, committee chairman.

Fair ordered an investigation in January after a report in The State raised questions about the loan.

New DJJ director William Byars said FBI officials asked him not to take any internal action until it finishes its investigation.

Former DJJ director, Gina Wood, signed a letter to refer 300 teens and children a year to Rosewood, the newspaper said.

Rosewood officials called the letter a contract when they used it to convince a Columbia committee the group home had clients, making the project viable, the report said.

The loan comes from the Columbia-Sumter Empowerment Zone, a federal program to create jobs in poor areas.

Wood, appointed by Gov. Jim Hodges, left in January when Gov. Mark Sanford took office. She could not be reached for comment, the newspaper said.

Bill Toal, attorney for the Rosewood group, would not talk about the report.

The newspaper said the Senate probe showed:

- Interviews with employees and Rosewood officials showed several DJJ administrators, including Wood, were involved in developing the relationship with Rosewood.

- DJJ did not make a request for proposals through the Office of Materials Management. State procurement laws require requests for services be advertised through that office. Instead, DJJ signed a document Feb. 7, 2002, that spells out contractual terms with Rosewood.

- DJJ and Rosewood officials were told in writing three weeks before signing the letter that the proper procedure for handling potential contracts was through the Office of Materials Management.

- Kenneth Moses, director of the Office of Residential Services at DJJ, was offered the position of director of operations with Rosewood and a $90,000 salary while he was still working for DJJ. The offer came two months after DJJ signed the letter.

One concern with the loan is that Rosewood officials told the Empowerment Zone loan committee the group had contracts with DJJ and the Department of Alcohol and Other Drug Abuse Services to refer youngsters to the home. Rosewood provided letters of intent from both in its loan proposal; the letter from DAODAS was unsigned.

Rosewood officials have since said they made a mistake in referring to the documents as contracts. But the DJJ letter is written in contract form and refers to DJJ as the contracting party and Rosewood as the service provider. The newspaper obtained the documents through a request under the state's Freedom of Information Act.

The city of Columbia has paid $187,000 of the $437,000 loan to Rosewood. City officials have asked for the money's return, but have received none, said Toal, Rosewood's attorney.

The $437,000 was meant as seed money until the group could secure nearly $47 million in loans from the federal government to build the 320-bed facility.