White House Hired Sham Foreign Company for Obamacare, Employees ‘Do Nothing’

Just when you thought the unfolding saga of Obamacare couldn’t get any stranger, it does. Witness last week’s bombshell – a whistleblower alleges American taxpayers are paying workers “to do nothing but sit at their computers.”

First reported by KMOV News 4, the whistleblower painted a picture reminiscent of the cult classic “Office Space,” telling the St. Louis station that employees went weeks literally doing nothing. What were they supposed to be doing? Processing ObamaCare paper applications.

Instead, they were sitting around playing games – all on the American taxpayer’s dime.

Photo Credit: Serco Global
Photo Credit: Serco Global

Lavonne Takatz worked from October to April at the Wentzville, Missouri facility where the transgressions occurred. She told the St. Louis Post-Dispatch: “We played Pictionary. We played 20 Questions. We played Trivial Pursuit.”

Another former employee told KMOV management told them to “act like we were working” and “look at the screen as if we were reading things.” Employees were banned from speaking to the media, even after they left the company. The company is called Serco, a British firm awarded a $1.2 billion contract to manage paper applications for President Obama’s health care law.

[sharequote align=”center”]Instead, they were sitting around playing games – all on the American taxpayer’s dime.[/sharequote]

Serco was a boondoggle of its own amidst Obamacare’s disastrous rollout. The former Serco employee explained that there were 1,800 people waiting to get one out of 20 applications that came through.

Since the workload was so light, they were told “to sit at their computers and hit the refresh button…no more than every 10 minutes.” If they refreshed more than that, they were called into a supervisor’s office and told to stop, reported the Post-Dispatch. Takatz says that Serco even provided books to read.

Photo Credit: AP
Photo Credit: AP

According to Center for Medicare and Medicaid Services (CMS) data, throughout October and November only 17 percent of exchange applications were on paper – far below the one-third rate the Congressional Budget Office projected. And yet at the same time there was a backlog of 50,000 to 60,000 paper applications – each representing a customer left in the dark about their status.

The Obama Administration awarded Serco with the contract last summer. Of course, as has been the case with so many recipients of this administration’s generosity, a cloud of insider politics hangs over the award.

Serco spent more than $1 million on lobbying and other political activities, including a donation to the Obama campaign – presumably common practice for a company that does 90 percent of its business with the federal government.

Interestingly, one of Serco’s hired lobbyists, Mark Hayes, was the central subject of an insider-trading investigation. But Serco’s dark history goes far beyond one lobbyist – it appears to stretch across the Atlantic Ocean.

Just days after Serco was awarded the Obamacare contract, they came under investigation from Britain’s Serious Fraud Office. An audit discovered that Serco and another company had been overbilling the government by over $80 billion (USD). Serco, Inc. in the United States did not alert the government that their parent company was under foreign investigation, despite being required by law to do so.

WASHINGTON, DC - MAY 21: President Barack Obama makes statement to the news media about the recent problems at the Veterans Affairs Department in the Brady Press Briefing Room at the White House May 21, 2014 in Washington, DC. Obama continues to express his concern over reports from current and former Veterans Affairs employees that some veterans had died while waiting to receive care. Rob Nabors, a White House deputy chief of staff, was dispatched to investigate deaths allegedly connected to a Department of Veterans Affairs medical center in Phoenix, Arizona. Chip Somodevilla/Getty Images
No US questioned the contract issued to Serco during the summer of 2013 – but now they are looking at the contributions the company made to the Obama campaign and the companies transgressions in Britain and Australia. Chip Somodevilla/Getty Images 

In August, London police investigated allegations that Serco falsified documents on a British government contract. In 2006, they were contracted to provide certain healthcare services in England, but the Guardian found that quality of service had declined drastically as a result. Another contract in 2011 resulted in 400 “clinical incidents.” In March of 2013, Britain’s National Audit Office found that Serco had made “unauthorized changes to performance data” 252 times in six months.

However, ineptitude and employee boredom have not been Serco’s only problems. Multiple reports have surfaced of staff being physically and sexually violent at another Serco-run facility, leading the Australian government to join the British in their suspicion of the worldwide corporation.

Given the seriousness of the various allegations against Serco, the Obama administration must have known about the company’s troubling past, and yet they were awarded the enormous taxpayer-funded contract anyway.

As Jillian Kay Melchior wrote for National Review, “Any one of these scandals would have been troubling enough, but taken together they make you wonder what the U.S. government was thinking — as with so much of the rest of Obamacare.”

Now, members of Congress want CMS to respond to questions that should have been answered long ago – before the rollout, before Serco was awarded the gigantic contract, before Obamacare was passed and signed into law.

Unfortunately, as with many of Obamacare’s expensive consequences, it is too little too late.

Lavonne Takatz told the Post-Dispatch she feels like she “was stealing money from people.” If only the Obama administration shared her concern.

Akash Chougule is a policy analyst at Americans for Prosperity.

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