American Dream

by Jason DeParle

  Perhaps he was thinking of Corey Daniels, the caseworker originally assigned to train Michael. Everything about him set off Michael’s bullshit detector. He wore a platinum Dennis Rodman do and watched soap operas at his desk. He flashed wads of cash and boasted of his Cadillacs. Playing his voice mail on the speakerphone, he deleted clients’ messages as soon as he heard their names. Bo-rring! Heard that! “The guy’s a flipping goof,” Michael said, demanding a new trainer. A background check would have shown that Daniels was also a convicted forger, with an arrest record that included kidnapping, battery, and impersonating a police officer. “You appear to be living a double life,” a judge had warned, while giving him four years for passing forged checks. Maximus hired him while he was out on parole. A few months after his tutelage of Michael, Daniels was back in court, charged with extorting nearly $4,000 from his clients. Four of them brought similar complaints: that Daniels had threatened to reduce their checks if they didn’t give him a share of the money. Michael, still new to office work, wondered what he had gotten into: “Drug abuse, check kiting, knocking up people—what is it about this place?”

  He did find a Fep to admire. His new trainer, Elizabeth Matus, was a soft-spoken Nicaraguan immigrant who could do what Michael could not: talk and work CARES at the same time. For two months, he scarcely left her side. He wouldn’t eat. He couldn’t sleep. He stayed at the office until 9:00 at night, studying the CARES manual. “This isn’t like putting up drywall,” he told himself. “You’re messing with people’s lives.” Then, ready or not, his password arrived: he was XMI28W, a full-fledged Fep. As if from a B movie, a clerk wheeled in seventy case files, some of them literally covered with dust. Most of the clients had been idle for months, while collecting checks. They needed appointment notices, work assignments, employability plans. With the state review approaching—and the corporate showcase at stake—Michael had two months to turn a pile of lost lives into CARES codes that could pass official muster.

  One of those files was Opal’s.

  The crack house where Opal took refuge was a mustardy complex cast in an otherworldly light by the all-night gas station next door. The inside was otherworldly, too, a dark space of torn couches and acrid odors that slumbered until noon and buzzed until dawn. The building divided into four apartments, and discreet dealers operated from three. The fourth, where Opal lived with Andrea, was a rollicking bazaar, notorious enough to attract motorists off the nearby Interstate. Opal paid $250 a month to sleep there, pregnant, on the couch. No one knew where she was. Like a foreign trek, life at Andrea’s combined adventure, escape, and a kind of liberating anonymity. It let her indulge her secret self, away from disapproving eyes.

  W-2 kept paying the way. With her new address across district lines, OIC transferred the case, and Opal’s introduction to Maximus had the makings of a dark spoof. Dragging herself in from the crack house, Opal discovered her case being reviewed by someone she knew from the recovery world as a fellow addict. The Maximus worker couldn’t have been any happier to see Opal than Opal was to see her, especially if Opal was right in surmising that she was still snorting heroin. (“She had them blisters up her nose! You can tell!”) “How you been doing?” the caseworker asked. Opal avoided an answer. She handed over an old drug-referral note and concocted a story about being in treatment. That bought her another month’s check. Someone handed her a form asking about volunteer work and hobbies. “Reading, skating,” Opal wrote.

  More faux social work followed. When Opal missed her next appointment, Maximus arranged for a home visit, just what you’d want in the case of a pregnant woman on drugs. Except the home visitor never went in the home. He knocked on the crack house door and handed Opal an appointment notice. A look inside would have revealed a drug nest. A call to the police would have disclosed a warrant for Opal’s arrest. A check with the Milwaukee public schools would have revealed that she didn’t have her kids. Instead, Maximus sent Opal to MaxAcademy. “That’s wasteless,” she said. “I been to so many motivation classes.” She went one day and got another month’s check.

  As usual, welfare wasn’t Opal’s only way to get by. One of the dealers who hung around Andrea’s was a small-timer in his late twenties, a rail-thin man with a pocked face and oversized nose, whom everyone called Bo. He wasn’t much to look at, Opal thought, and he didn’t have much to say. But she had a $300-a-day habit, and he had a pocketful of crack. Soon, Opal was calling him her “friend” and laughing behind his back about her ability to wheedle or steal his drugs.

  Restless after four months in hiding, Opal finally walked to a pay phone and told Kenny where she was. A week later, I picked them up and the three of us headed off to a Red Lobster. Kenny looked dapper in a red turtleneck, with cubic zirconia sparkling in his ears and a No Drugs button on his chest. Six months pregnant, Opal was disconcertingly thin, with matted hair and bags beneath her eyes. But she sallied forth in gold lamé shoes, regal even in exile. Drugs were destroying her family and her health, but not her love of the fantastic tale. “I live in a crack house!” she began. It was a difficult sentence to parse—part apology, partly a boast. “That house is booming. I ain’t never seen so many white people do drugs in my life! Doctors, bus - drivers, men that own their own construction companies!” Andrea and her sister smoked cocaine, Opal said, and their daughters sold it. “It’s like a family thing,” she said. She griped about the rent Andrea charged her, but the dealers had to provide drugs to the house—and “now, I’m the house.”

  Kenny poured a dozen sugars in his tea and took it all in. “Daughter sells drugs to the mother, so you know she’s going to hell,” he said.

  “So are you!” Opal said, raising the sore subject of his affairs. “You just fornicating.”

  “Thank you, Pope,” he said.

  Opal described her daily routine: sleep past noon and stay up till dawn, especially “if it’s my day to watch the door.” Kenny tried to sound more incredulous than he was. “Your day to open the door! What: they got your name on a refrigerator? ‘Opal’s day to open the door?’ I used to work the door. The guy that works the door is the first to get hit upside the head when the robbers come through.” Opal was thinking less of robbers than cops. The police had raided an adjacent apartment, and she couldn’t understand why they hadn’t burst into Andrea’s yet. “The police don’t want no white people doing drugs,” she said. “They fittin’ to raid it.” Given the pending theft charges from Target, she seemed resigned to going to jail. “It seems like it’s going to happen.”

  She said she had talked to her daughters several times “since I been AWOL.” Kierra and Tierra had taken her absence in stride, but Sierra, the oldest at nine, had cried and asked when Opal would return. “I’m sick right now,” Opal had told her. “When Mama gets better, I’m a come home and get y’all.” She said she felt sad. She said she felt “self-pity.” She said she felt “ashamed of what I’m doing.” She - didn’t say she felt ready to stop. After dinner, she packed the leftovers in a box and stole a bottle of steak sauce. Then she rode back to Andrea’s, where she was still living a couple months later when her case reached Michael’s desk.

  Whatever Maximus could blame for its failures with Opal, it couldn’t blame a shortage of cash. As she spent her welfare money on Primos, Maximus went on a grander binge, showering the town with more than $1 million of billboards, TV ads, and corporate tchotchkes and financing the spree out of welfare funds. Like a Mafia wiretap or the Watergate tapes, the bookkeeping has the lurid appeal of shabby sin exposed to daylight. The company spent $100,000 of program funds on backpacks, coffee mugs, and other promotional fluff. It spent tens of thousands on employee entertainment, including meals, flowers, parties, and retreats. It spent $3,000 to take clients roller-skating at the zoo. In one of the more inventive uses of welfare funds, it doled out $2,600 for professional clowns to liven up Maximus events. Though Maximus later agreed to repay $500,000 to the state and donate another $500,000 to community groups, the true extent o
f the waste will never be known because the records were in such disarray. In nearly three-quarters of the transactions later examined by legislative auditors, Maximus either couldn’t show what it had purchased or explain its relevance to W-2. Entries in the auditors’ report literally read like this: Vendor: “Unknown.” Item purchased: “Unknown.” Welfare funds expended: “$5,302.” For any welfare program to spend money like this defies comprehension. Why would a profit-seeking enterprise indulge such chaos and waste?

  The answer starts with the financial incentives of W-2. It was designed as a risk-management system, much like an HMO. Each agency got a fixed payment to serve its region; in return, the agency financed everything from clients’ benefits to caseworkers’ telephone bills. Just as HMOs were supposed to profit by keeping people healthy (and out of hospitals), W-2 agencies were supposed to keep them employed (and off the welfare rolls). The more an agency cut its caseload, the more its profits would grow. Given those incentives, the most obvious fear was that the agencies would find ways to cut needy - people off—not that they would pay women like Opal to sit around crack houses. But the rolls immediately fell so much that the financial pressures vanished. In offering the contracts, the state had budgeted for fifty thousand cases; when W-2 began, only twenty-three thousand people enrolled. Rather than rolling the dice, the agencies were rolling in dough.

  The catch is that unrestricted profits were capped at 7 percent of the contract, or $4.2 million in Maximus’s case. After that, the agencies kept only 10 percent of any leftover funds. Maximus knew its $4.2 million was in the bank. So it had little incentive to cut costs, since it would keep just a dime of each dollar it saved. In other words, it found itself with a big pot of someone else’s money to spend. And spend it did, lavishly and foolishly, in a drive to burnish its corporate image. “I have permission to make seven percent on this contract, period,” Leutermann said. “We’re using it as a national exhibit.”

  Hoping to win over local skeptics, Leutermann hired a $60,000 PR chief with a half dozen $40,000 and $50,000 assistants for the “community outreach” team. Inside the agency, they were resented as deadwood, and Leutermann let most of them go as soon as the contract was renewed. He also tried to buy goodwill more directly. Lots of companies make charitable donations; Maximus made them with tens of thousands of program dollars that were supposed to be helping welfare recipients. Leutermann covered the ethnic bases, from the African American State Fair and the Black Holocaust Museum to the La Causa Celebrity Waiter Festival and Granny Shalom House. The Women in Public Policy Luncheon, the Hispanic Chamber of Commerce, the Charlie Lagrew Fiddle and Jig Contest—likewise, all dealt in.

  In the big scheme of things, Granny Shalom didn’t cost taxpayers much. The advertising blitzkrieg did. State auditors estimated that Maximus spent $1.1 million on its marketing campaign. Bridgette Ridgeway, who spent two years overseeing the effort as a Maximus consultant and staff member, estimated the cost to be about twice as high, at $2.3 million. There were Maximus water bottles and Maximus visors. There were Maximus golf balls, towels, and tees, for all those golfers on the Maximus rolls. (“The golf balls were a bad idea,” Leutermann later acknowledged.) There was a Maximus jingle. Make that two Maximus jingles; the first, rendered in a minor key, was recommissioned after a consultant warned that in “keeping with the Maximus image, the music should not reflect sad or dark tones.” In one of Leutermann’s wilder schemes, Maximus spent more than $23,000 to bring in Melba Moore, the once-upon-a-time Broadway star (and former welfare recipient), for what flyers called an “exclusive inspirational concert for Maximus families.” She drew about two hundred people, putting the per-ticket cost at about $125.

  Leutermann argued that as the new name in town, Maximus needed a PR campaign to counter the negative rumors spread by its critics and reassure wary clients. “Had we been given a fair shake from the start, that would never have been necessary,” Leutermann later said. “But we were being painted from Day One as the for-profit, nasty assholes of the world.” Advertising can be appropriate; the question is whom does it aid? It’s one thing to leaflet poor neighborhoods, another to make sure that local pols tee off with Maximus balls. Among the expenses the state subsequently deemed proper was a share of the costs of hiring two of Tommy Thompson’s cronies, for advice on how to target political donations and win new contracts. Much of the advertising occurred around the 1998 summer meeting of the National Governors Association, which was held in Milwaukee. Collectively, its members controlled a multi-billion-dollar welfare market, and Leutermann hit them with everything from TV ads to CD-ROMs; his goal, he wrote his boss, was “to put MAXIMUS on the lops [sic]”—lips? laps?—“of every one of the fifty-five governors who will attend” from Maine to Guam. Ridgeway, the former PR chief, became a Maximus critic after Leutermann let her go. “My department bought media on specific radio stations because we knew that politicians would listen,” she said. “It wasn’t what’s best for the clients.”

  Maximus wasn’t the only agency taking a joy ride on welfare funds. OIC spent $67,000 to sponsor the Ray Rhodes Show, the weekly football rundown hosted by the coach of the Green Bay Packers (a show more likely to be seen by legislators than welfare mothers). United Migrant Opportunity Services spent $23,000 from a different welfare contract to advertise at Milwaukee Brewers’ games. A more disturbing report emerged when auditors looked at the Goodwill subsidiary, Employment Solutions, Inc., which ran two Milwaukee regions and therefore was the state’s largest W-2 agency. Auditors found it spent more than $270,000 of program funds outside the state, mostly in an unsuccessful attempt to win a contract in Arizona; the contract went to Maximus. The audits didn’t appear until 2000 and 2001, long after the money was spent. And the salient point is that they were done by the auditing branch of the legislature, not by Thompson or the subordinates he put in charge of his showcase program. On the day the legislative auditors released their findings, the state’s top W-2 official, Linda Stewart, issued a competing press release. It complained the auditors had failed to credit her own “vigilant efforts at monitoring and oversight.”

  The waste, though concealed for years, finally came to light. Not so with the deeper problem of W-2, its neglect of so many clients. What George Leutermann called “our dismal performance” on the state’s first client activity report, in June 1998, didn’t tell Maximus anything its managers hadn’t known: casework was weak to nonexistent, and most recipents were idle. If anything, the report understated the casework problems, since it only measured one aspect of the agency’s performance, the assignment of work activities. In August, Maximus examined several hundred cases against a fuller list of state rules, such as proper caseworker ratios and employability plans; 78 percent failed. In truth, none of these measures got to the bottom of things. They focused on process, not results. They asked whether clients were told what to do, not whether they did it and certainly not whether doing it made sense. Keith Garland, the Maximus manager of quality control, studied attendance at MaxAcademy, the agency’s signature effort. More than three-quarters of the people assigned to the class never showed up for a single day. Out of a caseload of nearly fifteen hundred, Garland said, “We had maybe one hundred people doing something.” As for the rest: “We didn’t know what people were doing. We didn’t have a clue.”

  With so many people (like Opal) doing nothing, why did they still get checks? In a given month, Maximus reduced its payments to only about one client in four, and hardly anyone had her whole check taken away. That pattern was typical statewide. The bureaucratic chaos offers one explanation: people couldn’t be punished for skipping assignments they hadn’t received. Finances offer another: having maximized their profits, agencies had little self-interest in withholding benefits. Caseworkers disliked the sanctioning process, which was time-consuming and brought complaints from angry clients. But a subtle shift in welfare politics also played a role. By the end of 1998, Tommy Thompson was finishing his third term, and he had cut the rolls
by 90 percent. Politically, he had nothing to gain by pushing more families off welfare. On the contrary, the new national concern was reaching “the hard to serve,” and savvy officials were trying to show they had preserved a safety net. The entire history of W-2 reflects a move away from Jason Turner’s Work or Else theory toward a more erratic and diffuse set of practices. In part that’s because the original vision was too rigid (not every client was best served by a community service job) and in part because the bureaucracy never really tried to pull it off. For all those reasons, an unspoken assumption often prevailed: when in doubt, give ’em a check.

  A few months after Maximus learned of its “dismal” results on the client activity report, the state announced the criteria it would use for contract renewal. There were, among other standards, three major measures of casework. The Feps could each handle no more than fifty-five clients at a time. They had to keep 95 percent of their employability plans up-to-date. And they had to make sure 80 percent of their clients had a full slate of assignments. This was more bureaucratic bunk. The state didn’t ask whether Opal got a job—it asked whether she had an employability plan. Plus, it was easy to manipulate the data. In grading the agencies for contract renewal, the state’s sole source of information was the computer system, CARES. The state had no way to know whether the assignments in the computer were real, much less whether clients were doing them. For months, Maximus tried to round up its clients and give them something to do. But if all else failed, the policy manual did permit another option: just type something in the system and send the client a copy. “It became a CARES game,” says Mona Garland, the former operations manager. “You just go in there and code them this, this, and this to make CARES look right and ultimately meet the right of first selection. . . . They may not really be assigned to thirty hours, but you go into CARES and make it sound like they’re assigned to thirty hours. The job-seeker may not even know.” When I asked George Leutermann about this, he said: “I would imagine some of that did happen.”