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Report: Road Construction Money Went To Jobs Program Under Blagojevich

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(Credit: AP)

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SPRINGFIELD, Ill. (CBS) — The Illinois executive inspector general says the state Department of Transportation directed $3.1 million in road construction money to go to a summer jobs program for teens in Chicago during the Blagojevich administration.

As WBBM Newsradio’s Dave Marsett reports, state Transportation Secretary Ann Schneider says she approved the payments under pressure from now-imprisoned Gov. Rod Blagojevich, under whom she served as Transportation Department finance director.

LISTEN: WBBM Newsradio’s Dave Marsett reports

At the time, Blagojevich’s office was pushing for rapid payment of the $3.1 million to five nonprofits participating in the program.

Schneider said she ensured there would be follow-up scrutiny but approved the checks from the state’s highway construction fund despite evidence that participants were doing ineligible tasks unrelated to transportation, such as rearranging furniture, conducting community surveys and working at golf courses.

“We were trying to slow it down to make sure there were commonplace safeguards in place, but there was a great deal of pressure to get this done in a very short timeframe,” Schneider said in an interview with the Associated Press.

A report released Monday by the executive inspector general said the agency should seek reimbursement of nearly $644,000 it overpaid the nonprofits to hire teenagers under the program launched by Blagojevich. The impeached governor, who was convicted on unrelated corruption charges, began serving a prison sentence last month.

When the inspector general referred the matter in 2010 to the state attorney general, officials indicated it was part of a federal investigation, according to the report, which didn’t say who began the probe. U.S. attorney’s offices in Chicago and Springfield declined comment.

The report did not recommend any employees be disciplined, but said an internal IDOT audit – which Schneider said she ordered – turned up the overpayments.

The $7.8 million program was part of Blagojevich’s response to a rash of Chicago shootings in early 2008. His Department of Human Services was in charge, and IDOT’s road fund was targeted as the checking account.

Monday’s report redacted names that surfaced during the investigation. But job titles remained, identifying Schneider and general counsel Ellen Schanzle-Haskins. It’s unclear whether other employees involved remain on staff. Schneider said the agency will “go forward” without penalizing anyone.

Asked Monday why she didn’t object to paying money without proper documentation, Schneider said: “That’s a good question.” But she said she and agency lawyers believed the payments were defensible given the agency allowed itself subsequent examination of the records.

She and Schanzle-Haskins both told investigators that they believed resistance would get them fired, according to the report.

A spokeswoman for Gov. Pat Quinn, Brooke Anderson, said senior IDOT managers have been “counseled on monitoring procedures and how to ensure this never happens again.” She said the administration implemented other recommended changes. However, those recommendations weren’t made public in the report.

Auditors who settled on repayment of $644,000 – mostly unpaid payroll taxes – said much more money was likely misspent but pursuing it would mean long legal battles over individual timesheets.

(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)